Instead, it's the way it is due to many other enormous industries and interests (farms, welfare, support for families and home owners, investors, etc, etc, etc.) I can guarantee you that the reason there's a special section for "fishing boat proceeds" on your W2 is not because H&R Block thought it would be a hoot but because of complex politics around the fishing industry.
This is true.
> they have very little influence on the matter.
This is not true. The tax prep industry has definitely had a major say in sinking several IRS efforts to make tax filing easier for individuals.
2. Are you seriously posing the question of why a ponderous government bureaucracy hasn't streamlined a process and made it user friendly? I'll just leave that one be.
> Simplify Tax Filings for Middle Class Americans: Obama will dramatically simplify tax filings so that millions of Americans will be able to do their taxes in less than five minutes. Obama will ensure that the IRS uses the information it already gets from banks and employers to give taxpayers the option of pre-filled tax forms to verify, sign and return. Experts estimate that the Obama proposal will save Americans up to 200 million total hours of work and aggravation and up to $2 billion in tax preparer fees.
From http://web.archive.org/web/20080716203213/http://www.baracko... (I can't seem to find a more recent copy of this).
What floored me this year is that after I submitted my taxes the state sent me a letter asking me for my W2 to verify the numbers. My confusion was, why doesn't the state already have my W2?!
Almost. They don't have filing status (married/single/etc.) and number of dependents. Unfortunately, those affect your tax rate, so the tax return can't be calculated without it.
In fact you should tune the process - if last year you had a large refund, then this year add more exemptions till your refund is as small as you can make it. (Technically you can go over if you want, and be required to pay, most most people don't like that.)
The easiest way to calculate it is do last years return with varying numbers of exemptions and compare the tax liability number (not the final number which includes payments). Use the real return as a baseline, then keep adding exemptions till the increase in the liability matches your refund, then use that number on the W-9. Perhaps that number minus one.
http://mobile.businessweek.com/news/2012-02-24/nextgen-faa-c...
or
http://www.usatoday.com/tech/products/services/2010-10-21-fb...
"The IRS could trivially set up a website" - no, you or I could trivially set up a website. The IRS can't trivially do anything.
http://www.irs.gov/efile/article/0,,id=118986,00.html
PS: Anyone can still use free forms: http://www.irs.gov/efile/article/0,,id=237156,00.html
There's no reason not to have the e-file stuff directly on the irs.gov website.
Instead, it's farmed out to 3rd party sites who try to trick people into buying add-on services. It's ridiculous, but I'm sure they lobby hard to keep it that way, so it's probably not changing anytime soon.
The _only_ reason they don't is that there is a HUGE industry that exists solely to fill out these trivial forms for intimidated people. HR block, et al will never allow the tax system to be simple.