Attempt to Streamline Income Tax Return Process

Although it is designed to help taxpayers prepare individual Income Tax returns without spending too much time on collecting information and filling out the form, new legislation introduced by two Congressmen, Bill Foster and Mike Quigley, in April 2013 has already caused controversial debates over pros and cons of this development.

The Autofill Act of 2013 proposes an amendment to the 1986 IRS Code by introducing a computer program that will automatically generate an Individual Income Tax return for each taxpayer by using data received by the IRS from employers, financial institutions, and Social Security Administration. The idea behind it is to reduce the time burden for return preparation, to save taxpayer’s money spent on tax preparers and CPAs, and to increase accuracy. It was predicted that the Autofill Act of 2013 might save up to $2 billion a year paid in fees.  Instead of reading through more than a hundred pages of instructions on how to complete an Income tax return, or paying a professional to prepare it for you, a taxpayer will be able to log into his personal page on the secure website and download a pre-prepared form.

This idea sounds like a good solution for many taxpayers who have difficulty filing their returns. However, the legislation clearly states that a taxpayer will have full responsibility “for the accuracy or completeness of his return of tax”. In other words, even if the IRS makes a mistake on the pre-prepared document, it will be still responsibility of a taxpayer to fix it.

Another concern that was already expressed about the Autofill Act of 2013 is a possible increase in identity theft that might occur if such a system exists. This program might become a target for various criminal groups that are already operating in many states.

The potential cost of creating and supporting a program like this once again speaks against the Autofill Act of 2013. The IRS will need to spend money paying not only for software development, but also to the IRS representatives whose responsibility will include correcting mistakes and helping taxpayers use the system.