Imagine this scenario: The IRS may soon just do your taxes for you — and send you the bill.
If this sounds farfetched, it’s not.
With a new congressional “super committee” tasked with finding $1.5 trillion in cuts by November, creative ways to find additional revenue are in high demand. And allowing the IRS to prepare you taxes could be one solution.
The idea has been around for a while, but has been picking up steam in recent years. In 2006, Senate Finance Committee Chairman Max Baucus (D-Mont.) argued it would close a $345 billion annual difference between what the government believes taxpayers owe them and what the IRS actually collects, which he calls the “tax gap.”
“I think the solution [to the tax gap problem] is to get rid of the middle-man and no fees required,” he said.
Obama’s former Chairman of the Council of Economic Advisers Austan Goolsbee made a strong case for it in a 2006 New York Times op-ed, explaining, “… the revenue service could send you a tax form already filled out with the information it has for you — a Simple Return — rather than a blank tax form. You would simply check the numbers against your W-2 and 1099 and then sign it.”