Tax prep circa 2020 = no tax prep required
When IRS Commissioner Douglas Shulman speaks, people listen. And so it is that we're listening carefully as he describes his vision for the future of tax preparation. I have gone on record stating that my personal prediction for the future of public accounting includes an end to individual income tax preparation as we know it. Commissioner Shulman seems to be reading from a similar blueprint when he describes a time in the future when the IRS will essentially prepare our tax returns for us based on the information returns it receives.
"The IRS would get all the information returns from third parties…. Taxpayers would then add any self-reported and supplemental information to their returns, and file the returns with us." And the taxpayers who don't add any supplemental information - the logical conclusion to draw here is that the IRS will assess taxes (and draw from withheld funds) based on the information returns received. One can easily imagine a time when most taxpayers, not wanting to bother with collecting receipts and filing additional information, will merely accept the IRS assessment and be done with the tax process.
This takes us back to the recent legislation to not require all of the 1099 forms that the government tried to include with the health care law. Maybe today that process is voted down. But tomorrow, it will become a necessity in order for the IRS to activate its vision of a truly paperless (and participationless) tax preparation process. I'm not sure I believe this is a good thing.
Gail Perry, editor-in-chief
Perry is a CPA and a former senior tax accountant with Big Four firm Deloitte. She maintains a small tax practice, she is a personal finance instructor, and the author of thirty books, including Surviving Financial Downsizing: A Practical Guide to Living Well on Less Income (Adams Media); QuickBooks on Demand (Que); Excel 2007 Macros Made Easy (McGraw Hill); The Complete Idiot's Guide to Doing Your Income Taxes (Alpha/MacMillan); and, most recently, Mint.com for Dummies (John Wiley & Sons). In addition, she is a former columnist for the Indianapolis Star and Indianapolis News daily newspapers.
Perry is a nationally recognized speaker who advises public accountants on using Internet tools to improve their accounting practices. She also taught a college-level introductory accounting class and was on staff at the Indiana CPA Society as a computer applications instructor. For five years, she was a contributing editor for Accounting Today magazine before taking over the helm at AccountingWEB.
Perry is a graduate of Indiana University where she earned a bachelor’s degree in journalism. She returned to school to study accounting at Illinois State University, passed the CPA exam (in one sitting!), and worked for Deloitte in the Chicago tax department.
Gail has been named one of the 25 Most Powerful Women in Accounting by CPA Practice Advisor magazine and the American Society of Women Accountants.