SimpleTax

I’ve been pushing for several years for a simplified tax filing system, in which the ATO would send all Australians a pre-filled return, with the option of choosing to accept it with a simple phonecall (though if a person wanted to claim deductions, they’d be free to do so). Over the weekend, a piece in the NYT discusses the parallel push now taking place in the US.

The I.R.S., however, isn’t rushing to offer returns that are already filled in. In the 2009 report to Congress of its Taxpayer Advocate Service, it noted that during the 2008 presidential campaign, Barack Obama proposed giving taxpayers “the option of pre-filled tax forms to verify, sign and return.” The report said “it is not feasible at this time” because the agency receives W-2 data from the Social Security Administration and 1099 data from financial institutions too late in the filing season, “much later than most eligible taxpayers would be willing to wait.”

And a cute analogy:

Requiring taxpayers to file returns without being told what the government already knows makes as much sense “as if Visa sent customers a blank piece of paper, requiring that they assemble their receipts, list their purchases — and pay a fine if they forget one,” said Joseph Bankman, a professor at the Stanford Law School.

3 thoughts on “SimpleTax”

  1. It seems to me we have most of that already, on etax anyway, since it prefills PAYG, interest & plenty of other info.
    With all the concerns over identity theft & private information being stolen from mailboxes, I don’t think I would be too comfortable about the ATO blindly posting out reams of personal info to year old addresses.

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  2. Peter,
    It is true that e-tax fulfills most of the functions of a pre-filled tax statement, but – at this point in time at least – it doesn’t satisfy the basic requirement that the vast majority of Australians should not have to seek assistance in preparing their tax returns.
    For example, my parents wouldn’t know what e-tax is and if they did, they would need help in using the on-line ATO PC application to generate it. I suspect many other non-tech savvy citizens would fall into that category. I’m guessing paper returns will have to suffice in the interim.

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  3. Andrew,
    Totally agree with you.
    After running a small consultancy I was praying for a prefilled estimate system. ie if the government was within $1,000 of my guesstimate then why not nod it through. It may need a simple delta/difference system that is pre-agreed with the attachment of just those receipts etc. But that could be left for stage 2.
    Please keep pushing for this.
    Best Regards
    Richard
     

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