American taxpayers strongly oppose having the IRS or their state tax agency take an additional role of any kind in preparing people's tax returns, according to a new poll released this week by the Information Technology & Innovation Foundation (ITIF). The poll found that 74 percent of taxpayers agree that the federal government should not spend taxpayer dollars on tax preparation software when taxpayers in lower tax brackets, students and veterans can access private tax preparation software for free.
"An IRS-run tax filing system is a conflict of interest. The IRS preparing and filing your taxes would be like the bank balancing your personal check book," said Rob Atkinson, President of ITIF. "It may not be in the best interest of the taxpayer."
The national poll, conducted by The Mellman Group, found that 62 percent of taxpayers do not trust the IRS to prepare their taxes for them and 74 percent believe it is a conflict of interest for the same government agency to be responsible for both tax collection and tax preparation. The Mellman Group surveyed 800 registered voters nationally from April 25th - April 29th. Results are subject to a margin of error +/-3.5 percent.
"Voters do not support and indeed express significant concerns about an IRS sponsored Web site that would prepare tax returns. Most do not trust the IRS to prepare their taxes, seeing an inherent conflict of interest between collecting taxes and preparing them," states a memo prepared for ITIF by The Mellman Group. "In fact, the public is much more supportive of the current system under which taxpayers...get access to privately developed tax preparation software such as TurboTax or H&R Block's TaxCut for free."
"The majority (57 percent) of taxpayers believe if the IRS prepared their taxes they would pay more than they really owed and that the IRS would not maximize their refund. Rather, taxpayers have confidence in private-tax preparation software to look out for their best interests by maximizing their refund," said Atkinson.
The poll findings come on the heels of several legislative proposals calling for IRS-run-tax filing systems, such as the often-discussed 'I-File' proposal. Under the current system, known as the Free File Alliance, a public-private partnership between the IRS and software companies in the tax preparation industry, taxpayers can visit the IRS Web site to access commercial online tax preparation and e-filing services at no charge.
You can read the memo prepared by The Mellman Group.
This analysis represents the findings of a national survey of 800 registered voters. Interviews were conducted by telephone April 25th - April 29th, 2008 using random digit dialing techniques to insure an unbiased sample. The margin of error for this survey is +/-3.5 percent at the 95 percent level of confidence. The margin of error is higher for subgroups.