When most people see a problem, they try to find its root causes and solve it. When many politicians see a problem, they throw money at it. This is a shortsighted and ineffective approach. With impending recession fears, massive layoffs across the country and record-high inflation, throwing more taxpayer money at the Internal Revenue Service (IRS) without getting to the core of the agency’s problems is foolish. But, in their typical tax-and-spend fashion, Sen. Elizabeth Warren (D-MA) and progressive activists convinced the outgoing Congress to spend $80 billion to fund an already bloated and inefficient IRS.
This new funding comes just as we’ve learned that the IRS has – yet again – exposed the sensitive financial data for 112,000 taxpayers just before the holiday season. This was a true Christmas gift for hackers. What’s more, the IRS is in the process of hiring 87,000 new agents to beef-up operations targeting already struggling working families with increased tax audits.
Also tucked away in this massive new giveaway to the IRS is $15 million to study how the agency could begin preparing and filing annual tax returns on behalf of all taxpayers. This would be an added responsibility on top of the agency’s existing and extensive mandate of collecting taxes and maximizing federal revenue. It’s not only a waste of taxpayer dollars — it’s also a blatant conflict of interest.
Amid record inflation, the federal government should be looking for ways to save taxpayer dollars. Yet, a February 2022 study from Govini estimated that the costs of a government-run tax preparation system would match or eclipse the $21.2 billion that the federal government spent over one decade to prop up Healthcare.gov.
A government-run tax preparation system is a solution in search of a problem. Over the past nine years, more than 113 million Americans have used private sector options to file their taxes for free online. Millions more will do so again next tax season. The government should not be competing with a more efficient and cost-effective private sector that taxpayers trust to deliver timely results for free for millions of Americans.
Multiple former IRS commissioners — from both sides of the political aisle — have deemed this proposal “unwise” in the face of the other critical problems facing the agency. These include the millions of outstanding, unaddressed tax returns from last year. At the end of May 2022, according to a report from the IRS’s independent watchdog agency, the IRS had an “unprecedented” backlog of 21.3 million unprocessed paper tax returns for businesses and individuals – an increase of 1.3 million from the same time last year.
For the millions of Americans who have had the misfortune of dealing with the IRS, just the thought of giving the agency more responsibilities is lunacy. In 2021, the Washington Post highlighted that, as of midway through tax season of that year, IRS employees had answered just 2 percent of the more than 70 million taxpayer calls, with many callers reporting having to wait on hold for at least 20 minutes before they were able to speak with a representative.
Donald Krimpler, a New Hampshire truck driver, had to take a day off of work last year to deal with a mistake on his taxes. After burning one of his few vacation days to stay home to deal with the IRS, he discovered that the mistake was the IRS’s fault. This is hardly the kind of customer service hard-working Americans deserve, but it’s what they currently receive. It is almost guaranteed to get worse if the IRS takes on new and unprecedented responsibilities.
This study and the pursuit of a government-run tax preparation system is yet another example of the federal government thinking they can spend their way out of systemic problems and replace popular private sector options. The IRS is clearly broken, and the private sector already offers effective and efficient tools for taxpayers looking to maximize their refunds. Instead of forcing an inefficient agency to do what millions of taxpayers already get for free from trusted companies, let’s focus on saving taxpayer dollars. And we can start by cutting expensive and superfluous studies to justify pie-in-the-sky progressive policies.
David Williams is president of the Taxpayers Protection Alliance.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.
