IIRC, IRS higher-ups have talked before about wanting to do this (since it would cut down on enforcement/audit costs to just tally up everything in-house and send a bill or refund), but the current laws don't allow them to implement it.
We have pre-filled taxes in Denmark and they work fine. You have a month to look over the pre-filled forms and revise them if necessary. Although the tax system is also a lot less complex (taxes are high, but also simple). I know the IRS is doing something like that, just not giving it to you, which seems silly: I've gotten a letter before pointing out that I filled out a line incorrectly, which also told me what the IRS thought the correct value should be. I'm sure that was auto-detected by comparing something I entered with the W2 or 1099 information (I forget in which context it came up). So just pre-fill it for me, then, since you obviously already know what should go there!
[1] http://www.propublica.org/article/how-the-maker-of-turbotax-...
You simply login with your "easy id" and accept or edit.
Any oustanding balance in your favour is transferred to your bank account in about a week.
Any outstanding balance in the goverments favour will either be moved to next years taxes or billed automaticly dependant on the amount.
It all works out pretty good.. Even though we pay the worlds highest taxes.. (Sales tax 25%, car tax 180%, income tax 58%..)
Edit spelling
Looks like terrible, Java-based spyware.
This is the norm in New Zealand, simplified greatly by our tax code which is inifnitely less complicated.
> The nefarious explanation for why is that Intuit has good lobbyists [1], but I'm not sure how true that is.
I've seen the topic come up on left-leaning US sites like Metafilter and it seems that in the US even nominal lefties who approve of big government are paranoid they'll miss out on their tax dodges if the IRS prepare the form for them as a first step.
But I can't see why we shouldn't let the government do the paperwork first and then send it to us to sanity check.
Even a 1% error affects over 3M people.
In the current voluntary compliance regime, a very small number of returns receive audit treatment of any kind.
Your point still stands though.
Previous employer went bust the hard way so I had a couple of tax years where my income was up and down - I rang up got though quickly the operator on the other said ok yes your owed xxxx we can change your taxcode for most of it and for this tax year you will get a refund after the tax year end.
I was expecting to have to take lots of calls and take several months to sort out.
A very simple and obvious example is the administration of taxation, where the government have most of the information already, and the rest is just going through the motions.
The oddest I've seen is the US/Canada air border also improved immeasurably when they laid off loads of Canadian border staff, forcing them to come up with more efficient systems for handling the same number of people with a smaller staff. It's not what you'd call good now, but it's way better.
Ultimately I'd have less objection to the governments keeping data if I saw the benefits from them doing it. As it stands it seems it's just used for their own purposes.