If the IRS knows how much money I owe why dont they just send me a bill?
2. There exist tax preparation companies which profit enormously from doing the paperwork for you and they'd miss out on that profit if the government just billed you.
(I agree that #2 is a big problem, but I don't think it's actually the reason we file taxes.)
(85-90% of households in recent years)
You now have to be able to deduct over $24k to not take the standard deduction.
Oh, and my taxes are supposed to increase even more once the Trump tax holiday for the middle class expires in 2025. Luckily for corporations it is permanent for them. That tax plan was the most blatant government handout to the 1% and for some reason 40% of Americans think it's the best tax plan ever.
In any case, the standard deduction does have the effect of significantly reducing the administrative burden of taxation, and it crosses off one of the arguments used in favor of pointlessly complex tax filing.
“If you had any income that is not reported here, report it on irs.gov/…. Failure to do so is punishable by …”
This would make things significantly easier for 90% of the population.
Since “they” also define what you can be prosecuted for, that’s a bit of an odd justification even before considering the fairly strong evidence from both tax prep lobbying and anti-tax candidate behavior (including occasionally saying the quiet part out loud directly about the pain in the process being necessary to keep tax burden front of mind for taxpayers) that the two reasons cited by the grandparent are, in fact, the dominant factors.
Which ones? I don't agree or disagree, but I think it's a good practice to call out politicians when we make claims they do something. That way it gives a more clear line of sight to your claim.
https://www.propublica.org/article/filing-taxes-could-be-fre...
The IRS doesn't know how much tax you owe because Congress has created a massively complex system that includes using deductions to incentivize certain types of behavior, as well as using the tax system as a mechanism to deliver means-tested benefits.
For example, the Earned Income Tax Credit is a means-tested benefit program that's delivered through the tax system. This is not a niche program - 25 million families benefit from it.
It requires filers to identify how many qualifying children they have, which in turns depends on things like the educational status (is this child in school, college, are they a full-time student) and residency (child must generally live with you, but with exceptions for overseas military service, etc).
In cases where multiple filers can claim a qualifying child (e.g. cohabiting single filers), you're required to make an election as to which return will claim the qualifying child.
The EITC also encourages reporting of informal income (because it's only available to people who earned an income) which might not be on a W-2 / 1099, e.g. baby sitting, to qualify.
None of that stuff is known to the IRS from W-2s, 1099s etc. and they are dependent on the filer to provide it every year, especially as circumstances change; and filers are strongly incentivized to provide it as the credit is refundable.
What should happen is you log in to irs.gov and see everything they know (number of kids, income, interest, reported charitable giving, etc...), you fill out the missing pieces (energy credits, when you bought and sold stocks, charitable giving not reported to them, etc...), and they run the calculation. It should take almost no time at all for people with simple returns and only a few minutes of inputting some basic figures for most everyone else, with of course a handful of people who have terminally complex returns and need an accountant.
Instead you have to manually enter all of the information the IRS already knows because otherwise nobody would pay for TurboTax or H&R Block. Only real accountants would be necessary for those special cases where people have complex holdings.
This has been a major topic of discussion in tax circles for decades, the vast majority of Americans do not benefit from deductions and the federal government's direct knowledge of your income is essentially identical to your own (because of mandatory reporting from employers, banks & other financial service entities).
Specific deductions are written by and for high income individuals, and supported by lobbying from the tax industry which wouldn't exist without them, but they're not used by the vast majority of Americans, especially with raised SALT limits and doubled standard deduction.
And this is not just limited to the Earned Income Tax Credit.
There are also Child Credits, Child and Dependent Care Credits, Adoption Credits, Residential Energy Credits (for those who got solar), Low-Income Housing Credits (for low-income home owners), American Opportunity Tax Credits (for those with low/middle incomes paying college expenses) ... and all of these are relevant to non-itemizers.
P.S. there are also above-the-line deductions available which reduce your AGI even if you take the standard deduction - an important one being the one for Student Loan Interest.
The real question, in my mind, is that, knowing John Q. Taxpayer is burdened with understanding the tax code in it's entirety (in the spherical cow, in a vacuum sense), why in heaven's name are things written in such a manner whereby doing everything by the book is so hard?
From my experience, most people get the income part, those who have good portfolios get capital gains, but most people don't even know where to start looking if they aren't guided to it by an adversarial audit, which are guaranteed to be counterproductive in fostering the any degree of goodwill between taxpayer and tax service. Obviously, an accountant is capable of learning the corpus of material to be able to work with it, but given both the licensure requirement, and the fact most accounting questions I've heard resulted in a lot of open to interpretation answers, I'm not at all confident saying it is reasonable to expect the taxpayer to accurately report things, and furthermore, to expect some group of experts to handle it for everyone else, we've not done a good job at treating tax expertise as a public good in the accessibility department.
In short, at it's core an information propagation problem, suffering from perverse incentives present in private enterprise guarding and perpetuating information asymmetry to create opportunities for profit extraction at the expense of public process being rendered largely ineffectual.