Other advocates point out that the IRS would be doing essentially the same work it does now. The agency would simply share its tax calculation before a taxpayer files rather than afterward when it checks a return.
“When you make an appointment for a car to get serviced, the service history is all there. Since the IRS already has all that info anyway, it’s not a big challenge to put it in a format where we could see it,” said Paul Caron, a tax professor at the University of Cincinnati College of Law. “For a big slice of the population, that’s 100 percent of what’s on their tax return.”
Taxpayers would have three options when they receive a pre-filled return: accept it as is; make adjustments, say to filing status or income; or reject it and file a return by other means.
“I’ve been shocked as a tax person and citizen that this hasn’t happened by now,” Caron said.
Some conservative activists have sided with Intuit.
In 2005, Norquist testified before the President’s Advisory Panel on Federal Tax Reform arguing against return-free filing. The next year, Norquist and others wrote in a letter to President Bush that getting an official-looking “bill” from the IRS could be “extremely intimidating, particularly for seniors, low-income and non-English speaking citizens.”
Norquist, founder of Americans for Tax Reform, declined to comment, but a spokesman pointed to a letter he and other conservatives sent this month to members of Congress. The letter says the IRS wants to “socialize all tax preparation in America” to get higher tax revenues.
A year after Norquist wrote Bush, a bill to limit return-free filing was introduced by a pair of unlikely allies: Reps. Eric Cantor, (R-Va.), the conservative House majority leader, and Zoe Lofgren (D-Calif.), a liberal stalwart whose district includes Silicon Valley.
Intuit’s political committee and employees have contributed to both. Cantor and his leadership PAC have received $26,100 in the past five years from the company’s PAC and employees. In the last two years, the Intuit PAC and employees donated $26,000 to Lofgren.
A spokeswoman said in an email that Cantor “doesn’t believe the IRS should be in the business of filling out your tax returns for you,” and that the bill was designed to “prevent the IRS from circumventing Congress.”
Lofgren did not respond to requests for comment.
Intuit did not issue public statements on the return-free filing bills, but CCIA President Ed Black has called return-free filing “brilliantly Machiavellian.” When Sens. Ron Wyden (D-Ore.), and Dan Coats (R-Ind.), introduced a bipartisan tax reform bill in 2011 that included a return-free plan called “Easyfile,” Norquist blasted it.
“The clear goal of this measure is to raise taxes in a way that leaves politicians with clean hands,” he wrote in a letter to the two senators.
Political opposition hasn’t been the only hurdle. Supporters say return-free filing has been overshadowed in a tax debate that has focused more on rates, deductions and deficits.
Further, return-free filing would not be available to everyone. It’s best for the slice of taxpayers with straightforward returns who don’t itemize or claim various credits.
Still, past studies estimate that this group might include 40 percent of filers or more; the IRS expects to process 147 million individual returns this year.
In separate reports, the CCIA and a think tank that Intuit helps sponsor argue that potential costs outweigh return-free filing’s benefits. Among other things, the reports say that not many taxpayers are likely to use return-free, that new data reporting requirements could raise costs for employers, and that taxpayers could face new privacy and security risks.