At Intuit, we have long supported the empowerment of individual taxpayers to manage their own finances, including preparing their own tax returns, so they receive every dollar they’ve earned and deserve. We take pride in our role empowering taxpayers and advocating on their behalf. We openly advocate for tax simplification because we believe the more simple the tax code, the more confidence taxpayers will have in preparing their own taxes and in managing their financial lives. Over 35 years of playing this role, we’ve earned our customers’ trust – trust in our ability to help them through the most important financial moments in their life, trust that we’re on their side.
Yet, a small but vocal group is increasingly set on diminishing that trust so they can impose a system that removes taxpayers from the center of their finances. They envision a tax regime in which the government – already the tax collector, investigator, auditor and enforcer – takes on the last remaining role of preparing the individual income tax return for every American. They believe a completely government-run tax regime will make it easier for American taxpayers to comply with their obligations.
We think this idea is counter to a uniquely American system and fraught with potential conflict. The goal of most taxpayers is to claim all of the deductions and credits to which they are entitled, so that they receive the maximum refund allowed by law. At the most basic level, a tax preparation system run by the tax collector represents a fundamental conflict of interest.
Under a government-run system, the IRS could fill in your tax return based on partial information from documents like a W-2 and a 1099. But the IRS would have no way of knowing if you gave money to a charity, got married, paid for education, bought a house or had a child and paid for their care. Each of those major life changes could significantly lower tax liability. And some of the most complicated tax returns are for lower-income working people who claim the Earned Income Tax Credit, a credit that relies on information the government does not collect today and one that dramatically impacts the lives of over 30 million low-income Americans. Under a government-run system, tens of millions of low-income Americans could miss out on the EITC alone, with countless more missing out on other tax deductions to which they are entitled. Billions in tax refunds could go unclaimed, especially within disadvantaged communities. Simply said, the government doesn’t have the information needed to accurately prepare taxes and get taxpayers every dollar they deserve.
Apart from whether the government should become the nation’s tax preparer, building, operating and maintaining a new tax preparation service could cost billions of dollars —a cost that would ultimately be borne by U.S. taxpayers themselves. One former IRS commissioner publicly stated that the IRS would never receive sufficient funding to create such a system.
But perhaps the strongest argument against the idea of a government pre-filled return is that the American public doesn’t want it. Public opinion polling conducted over the course of nearly two decades has consistently shown that taxpayers oppose the concept by a margin of more than 2-1.
For years, Intuit has publicly called for simplifying the nation’s tax code. And for more than a decade, we have also said that we oppose a government-run tax preparation system because it would not be in the best interest of individual taxpayers. We are proud to exercise our right to advocate on behalf of taxpayers. In tax year 2018, we helped return more than $80 billion in tax refunds to individual tax filers. We celebrate that outcome for our customers, and we don’t believe a government-run pre-filled tax preparation system would have the same customer focus, nor do we believe it will achieve nearly the same result for taxpayers.
We work every day to create innovative products that make it easier for taxpayers to determine and understand what they owe to the government and to get refunds for every dollar they’ve earned and deserve. Our tax preparation products have been used completely free by 55 million taxpayers over the last 5 years. In tax year 2018, we helped our customers file approximately 13 million completely free tax returns. That’s more completely free tax returns than all other tax prep software companies combined.
We do this through our commercial free products and through voluntary philanthropic participation in government sponsored programs, including the IRS Free File program, which supports low and moderate income taxpayers, and the Volunteer Income Tax Assistance (VITA) program, where we help millions more taxpayers in need file for free. Whether filing taxes through Intuit, an accountant or a tax store, in every scenario, taxpayers actively participate in the process so they are financially empowered and can keep as much hard earned money as they are lawfully allowed.
Our mission is to power prosperity around the world – and that means being on the side of taxpayers, and giving them tools to take charge of their finances, enhancing financial literacy and advocating for every taxpayer so they can make informed decisions about their own money. We believe taxpayers, not the government, should be at the center of their finances.