The leaders of Congress have stated that a new piece of legislation that would mandate the Internal Revenue Service to provide a free online tax filing system would be beneficial to millions of people in the United States.
Senator Elizabeth Warren (Democratic Party of Massachusetts) has been in the Senate for a very long time, and the Tax Filing Simplification Act of 2022, which she introduced, has the backing of over two dozen of her fellow senators.
Representatives Katie Porter (Democratic Party of California) and Brad Sherman (Republican Party of California) are supporting this legislation as co-sponsors (D-CA).
According to an article published in Accounting Today, the Tax Filing Simplification Act is designed to address the following issues that have been affecting the traditional Free File program run by the IRS:
…Warren mentioned that just 3% of taxpayers actually use [Free File], even though an estimated 70% of taxpayers are entitled to use it.
However, a significant number of the tax software suppliers who are involved in the program impose restrictions on who can take part and have a tendency to drive clients toward paying for the software, at least if they wish to file their state taxes.”
The Government Accountability Office suggested in a report dated April 2022 that new options for completely free filing should be made available by the Internal Revenue Service (IRS) for taxpayers all around the country.
Additional views and observations were provided by Warren regarding the new legislation, including the following:
“Along with decreasing costs and eliminating red tape for all taxpayers, streamlined filing tools will ensure that more eligible people — including millions of low-income Americans — receive crucial tax refunds, such as the Child Tax Credit and the Earned Income Tax Credit. According to the results of recent polls, 77% of Americans are in favour of this law “lation.”
The lawmaker claimed that paying taxes takes the typical American 13 hours and 240 dollars per year, which he referred to as “too much time and too much money.”
The following are some of the specific effects that the proposed legislation would have:
– This bill prohibits the Internal Revenue Service from entering into agreements that would limit its ability to provide free online tax preparation and filing tools to taxpayers.
– This bill instructs the Internal Revenue Program to create a free electronic filing service that will enable all taxpayers to file their returns directly with the federal government. Currently, taxpayers must use third-party software such as Inuit and TurboTax to complete their returns.
-Allows taxpayers to download relevant filing data that the IRS already possesses into the software application of their choosing, thereby reducing the likelihood of errors occurring about W2 or Child Tax Credit payments.
Read more:-
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-Allows eligible taxpayers whose tax returns are straightforward to select the return-free option, which supplies a pre-prepared tax return with income tax liability and/or refund amounts already specified, eliminating the possibility of a mathematical error.
-Requires that the newly developed free filing tools and data download systems of the Internal Revenue Service (IRS) be made available using a protected online application that includes identity verification features.
-This bill instructs the Internal Revenue Service (IRS) to broaden the coverage of the non-filer tool for the Child Tax Credit to include other tax benefits, most notably the EITC, by the latest date possible of March 1, 2023.
