Tax prep circa 2020 = no tax prep required

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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.

Best regards,

Gail Perry, editor-in-chief