Be Brave Not Safe

Since our boys have a job (or jobs) they get to experience the “pleasure” of preparing their own tax return. So far, they qualify for the EZ form. However, because the EZ form isn’t all that easy, tax time results in me being bombarded with questions: “Where do I find the form, what does this mean, how do I calculate that?“, etc.

The approach I’m now taking is to have them sit down at the kitchen counter – together. And, I indicate: “You have a total of 10 questions you can ask me, between you. Use them wisely. First, try to figure it out amongst yourselves. If you agree that you need help ask, knocking one available question off the list.” It has now become a fun exercise with much laughter.

During this year’s session, one of my sons asked: “What if I put in the wrong number?” I responded: “This happened to your brother a couple of years ago. The IRS fixed it for him and gave him the correct refund.” To which he responded: “How did they know the right number?” My answer: “They take the information provided by you, the W2 from the company you work for and the 1099-INT from your bank and validate the numbers and calculations.” My son flips out and asks: “Then why am I doing this tax return if the IRS is doing it?!?!?!”

I explained: “It is not that simple, as there are variables the IRS does not know about that could impact your tax return. But, the question is a good one.” I therefore didn’t count this barrage of questions against their quota 🙂

The question made us think…Considering the fact that financial institutions and employers provide the IRS with the “basic” information necessary to prepare a tax return, there would seem to be a tremendous opportunity to streamline the tax filing process that could reduce our (the taxpayers’) costs and time. Let’s start real small (focusing on “EZ” filers). What if?

• The IRS took the “basic” information they receive about us from employers and financial institutions (i.e., W2’s, W4’s and 1099’s) and apply it against our social security number. I imagine “something” like this is being done already! More importantly, this information could be made available to us online to support the following…
• The “potential” EZ-filer log’s in to a myIRS.gov-type site to validate / confirm the information.
• The necessary questions are asked to confirm the person qualifies for EZ filing.
• If the taxpayer is an EZ-filer they simply populate the remaining information / variables on the EZ form and hit submit. They are done!

Doing so would significantly reduce the use of paper, stamps and (most importantly) numerous errors that I imagine the IRS deals with related to basic taxpayer information (especially from inexperienced filers). I realize an e-file option exists. But, it is 100% driven by the taxpayer collating this “basic” information. As such, it is impacted by the taxpayers’ ability to understand the forms and populate the information for filing purposes.

My intent isn’t to solve world hunger (I mean government bureaucracy and inefficiencies) with this post. The point: It is important to reinforce the benefits of asking good (TOUGH) questions. Doing so ensures we don’t become complacent with “this is just the way things have always been.” When possible, let’s find or create a better way!

In closing, let’s keep asking the question: “Why am I doing this?”

p.s. – Anyone out there have a connection with the IRS that could build on this idea 🙂