PhotoDid you ever wonder why you have to file a tax return? After all, the IRS already knows how much you made from the W-2 and 1099 forms filed by your employer and others. It knows how many dependents you have, as well as other routine information from your previous returns.

So, unless you itemize your deductions, why doesn't the IRS just calculate your tax for you?

Good question, and one that Rep. Brad Sherman (D-Calif.), a CPA, seeks to answer with a bill he has introduced in Congress. Sherman's Tax Filing Simplification Act of 2017, would direct the Internal Revenue Service (IRS) to develop a new program to provide taxpayers with a pre-prepared tax return with their income tax liability or refund amount already calculated.

“Under the Tax Filing Simplification Act, most Americans would receive a tax return already prepared by the IRS. They could hit ‘submit’ and they’re done.  Or they could make changes and then hit ‘submit’,” said Rep. Sherman. “Or they could simply ignore the IRS pre-prepared return and submit their returns just as they do now.”

The bill would also require the IRS to create new software to allow all taxpayers to prepare and file their taxes directly through the IRS. 

Additionally, the bill would allow taxpayers to download information the IRS already has (like their W-2 and 1099 forms) directly from the IRS’s website.

Co-sponsors of the measure include Reps. Don Beyer (D-VA), Grace Napolitano (D-NY), Eleanor Holmes Norton (D-DC), Jamie Raskin (D-MD), Tim Ryan (D-OH), and Tom Suozzi (D-NY). 

The bill is based on legislation introduced in the U.S. Senate by Senator Elizabeth Warren (D-MA).

 


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