Online tax preparation is gaining in popularity today. When Intuit first developed TurboTax, the first online tax program for home use, many taxpayers were wary about how the government would feel about taxes being prepared through an online program. Today, Intuit is a major lobbying force that is fighting to keep the IRS from competing with the online tax preparation services.
This online tax preparation controversy is rather interesting. Intuit created the idea of charging tax payers to use a computer program that was designed to file taxes quickly while eliminating chances for errors. The IRS needs a system that is easy to use, that explains all instructions completely, and one that files taxes quickly. The online tax filing programs are exactly what the IRS needs. Intuit also needs these programs for profits.
According to the Government Accountability Office, in year 2005, the American public spent up to 600 billion dollars, or about 20% of collected taxes, on the act of hiring tax preparation services to prepare the tax returns. With our country experiencing financial problems today, experts are considering ways to free-up some of the tax preparation money so that it can be helping the economy in other areas.
If Intuit, and all other online tax preparation services were to become obsolete due to the government placing their own programs online for consumers, the online tax preparation money could become the government’s to use for their own expenses. As it stands now, the money that consumers use on a tax preparation program is used as a deduction on their taxes so that the government is in essence funding the private online tax services.
Heated debates are brewing on both sides of online tax preparation money controversy. As Americans, we do not believe in our government banning free enterprise. However, we also do not believe that it is wise to let our governmental financial problems continue unchecked. The IRS is responsible for the tax system; some believe that it makes sense that the government should be running their own online tax preparation programs.
As it stands today, Intuit and the government have reached a deal that forbids the government from putting their own online filing programs into place. Instead, a percentage of online filing services will offer free income tax filing services to people who make less than 52,000 adjusted gross incomes per year. This is the government’s way of eliminating a tiny bit of the money that we spend on online tax preparation services.
Nobody knows what the future will hold in the controversy between the private online tax preparation services and the governments desire to enter this marketplace. Today, one of the advantages of using an online filing service are the instant refund programs that allow for refund money to be disbursed through a loan, quicker than the official tax service can provide. The government has countered with CADE a system that will be making refunds in just 2-3 days from the IRS by the year 2012.
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