The IRS is not set up to provide people with their data during tax season. ADP can provide your year-end tax information before your W-2 is sent to you or the IRS. So, while I agree the IRS has the potential to use the data they already receive, the transformation of how they receive and use it is large enough that they can't be considered to have an existing solution in place.

Agreed they don't have a solution in place that can do the calculations by mid-April. They do have a solution in place that could do it by late summer, so if people just opted-in (even online), the IRS could take it from there, and send a refund or a bill by Labor Day. For people with simple tax situations (not me, alas), that would be a boon to people.

I worry more about the tax law changes that might come if people started paying EVEN LESS attention than today about how their taxes are calculated than I do about the IRS ability to execute this.

Clicking a webform and getting a bill or direct deposit divorces people from the fact that this is real money in play.

I'll give you that point.

But at the same time, the IRS has no real competitive alternative to something like TurboTax. Sponsoring the creation of yet another tax-preparation software feels like XKCD Comic number 927

http://xkcd.com/927/