Tuesday, April 15, 2008

Tax Day

I heard this really strange story on NPR yesterday:

"We have, frankly, billions of pieces of paper that get put in the backs of large semi- trucks and rolled up to IRS facilities," said David Williams, IRS' director of electronic tax administration. "And we've got to keep track of it all. And so when people file right there at the end of the filing season, it takes us a lot more time to get through and make sure that we've done the right thing with their tax return."

The IRS now hopes to reach the 80 percent threshold by 2012. There are a number of obstacles to that, including fees for electronic filing, and taxpayer concerns about dealing with third-party processors.
Now, I'm no economist, but it seems the incentives are set up all wrong. If the IRS really wants people to file electronically, they should make filing electronically free. The main reason I didn't file my returns electronically was because you have to pay an additional fee -- and that's after I bought the tax program for dummies. I agree that e-filing is faster, more searchable, and more environmentally friendly, but then the IRS needs to re-evaluate its incentive system.

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