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Sen. Elizabeth Warren

Financial Planning > Tax Planning > Tax Reform

Sen. Warren Floats Bill to 'Simplify' Tax Filing

By Melanie Waddell

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What You Need to Know

  • The average American spends 13 hours and $240 every year to file their taxes, Warren said.
  • The bill directs the IRS to develop a free, online tax preparation and filing service.
  • It also prohibits the IRS from entering into agreements that restrict its ability to provide such services.

On Wednesday, Sen. Elizabeth Warren, D-Mass., along with 22 other lawmakers, introduced the Tax Filing Simplification Act of 2022, to create “free and easy” tax filing tools and cut down on the time spent preparing returns.

The legislation, according to Warren, would simplify the tax filing process for millions of Americans, saving them hours and hundreds of dollars.

“Along with lowering costs and eliminating red tape for all taxpayers, simplified filing tools would ensure that more eligible people — including millions of low-income Americans — receive important tax refunds, like the Child Tax Credit and Earned Income Tax Credit. According to recent polling, 77% of Americans support this legislation,” Warren said.

The average American, Warren continued, “spends 13 hours and $240 every year to file their taxes — that’s too much time and too much money. This is the result of corporations like Intuit sabotaging the Free File program to rake in large profits.”

Congress “should pass my Tax Filing Simplification Act, and the IRS itself can and should adopt my plan to simplify the tax filing process for millions of Americans and lower their costs,” Warren said.

The Tax Filing Simplification Act does the following:

  • Prohibits the IRS from entering into agreements that restrict its ability to provide free online tax preparation or filing services.
  • Directs the IRS to develop a free, online tax preparation and filing service that would allow all taxpayers to prepare and file their taxes directly with the federal government instead of being forced to share private information with third parties.
  • Enhances taxpayer data access by allowing all taxpayers to download third-party-provided tax information that the IRS already has into a software program of their choice, saving time and decreasing the risk of math errors on W-2 income or Child Tax Credit payments that lead to significant processing delays.
  • Directs the IRS to expand the Child Tax Credit non-filer tool to cover other tax benefits, especially the EITC.
  • Allows eligible taxpayers with simple tax situations to choose a return-free option, which provides a pre-prepared tax return with income tax liability or refund amount already calculated.
  • Mandates that these data and filing tools be made available through a secure online function and requires any participating individual to verify his or her identity before accessing tax data.
  • Reduces tax fraud by getting third-party income information to the IRS earlier in the tax season, allowing the agency to cross-check this information before issuing refunds.
  • Directs the IRS to expand the Child Tax Credit non-filer tool to cover other tax benefits, especially the EITC, by March 1, 2023.

Melanie Waddell

@Think_MelanieW

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