The IRS has been in the news an awful lot this past year. The Federal government is arming the tax agency with stacks of cash, $80 billion in new funding over the next decade, to be specific, and they appear to want to use some of it to replace tax prep services with one of their own.
Be ready for an all-out war on this one. Companies like H&R Block, TurboTax, and some of the others Americans use are big and strong and have a well-funded war chest to ensure they don’t become extinct.
Senator Elizabeth Warren is the loudest supporter of the IRS, and she’s made it very clear how they need to be involved in their life more, not less. She has said that doing your tax preparation through the government would make the process simpler and cheaper. Has that ever happened in the history of this company?
According to the IRS, it would cost the government a measly $10 per taxpayer. Reports say the average American spends $140 on tax preparation each year, and the least expensive option TurboTax offers is $69.
This is one of the ideas that came out of the think tank created with that new IRS funding. The group determined that the IRS can handle a direct-file tool, believing 72% of Americans would use it.
The big names in tax prep service, H&R Block and TurboTax, have paid about $35.2 million lobbying lawmakers since 2006. Intuit is the parent company of TurboTax, and their spokesman Tania Mercado told Morning Brew that the IRS plan is “a solution in search of a problem” that would “unnecessarily cost taxpayers billions of dollars.”
She added that the $10 estimate the IRS claims a filing will cost taxpayers is a flat-out joke.
There are some very loud critics of this plan, and their argument is obvious. It would put the IRS and the government in control of the tax filing system from start to finish.
Joe Biden and the White House loaded this think tank with left-leaning and progressives, which might not be great news for capitalists. If it gets pushed through, it would be years before it would be in place.
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