> Unless you're dealing with foreign income, are a business, or do a lot of contract work for cash, I don't see much reason why the IRS can't just handle all the taxes automatically - apart from the fact that some company wants to charge me $150 a year to file my taxes and making sure that my tax situation (which would fit on a beer coaster otherwise) is as complicated as possible.

I imagine there are heavy software development costs, on par with what it might take to build Turbotax itself.

For instance, someone is going to have to figure out wash sales. Right now your broker does it, but you can wash sale across accounts, which requires you (or more reasonably tax software) to both detect this and track the adjusted basis in perpetuity. More complex events, like straddles, further exist, and even consumer-grade tax software won't handle it correctly.

Even implementing the tax code correctly for regular income is difficult. Examples of calculating Net investment income tax correctly due to ambiguous tax code changes (https://www.bogleheads.org/forum/viewtopic.php?f=2&t=271074&...)