Congressman Brad Sherman, CPA and Senator Elizabeth Warren Introduce Legislation to Simplify Tax Return Filing
Washington, DC – Congressman Brad Sherman, CPA and former head of the nation’s second largest tax agency, today reintroduced the Tax Filing Simplification Act to ease the tax filing process for millions of American taxpayers and reduce their costs. Sherman’s bill is a companion to legislation reintroduced today by Senator Elizabeth Warren (D-MA).
Last tax season, American taxpayers spent an average of 11 hours and around $200 preparing their tax returns – a cost equal to almost 10 percent of the average federal tax refund. Under this bill, most tax payers will be able to complete their tax returns in less than ten minutes and at no cost.
Congressman Sherman is joined by Representatives Alexandria Ocasio-Cortez (D-N.Y.), Eleanor Holmes Norton (D-D.C.), Don Beyer (D-Va.), Jamie Raskin (D-Md.), Tim Ryan (D-Ohio), Katie Hill (D-Calif.), Earl Blumenauer (D-Ore.), and Jackie Speier (D-Calif.). In the Senate, Senator Elizabeth Warren was joined by Senators Jeanne Shaheen (D-N.H.), Sheldon Whitehouse (D-R.I.), Tammy Baldwin (D-Wis.), Bernie Sanders (I-Vt.), Tom Udall (D-N.M.), Edward J. Markey (D-Mass.), Tammy Duckworth (D-Ill.), Maggie Hassan (D-N.H.), Jeff Merkley (D-Ore.), Cory Booker (D-N.J.), and Richard Blumenthal (D-Conn.).
Along with lowering costs and eliminating red tape for all taxpayers, return-free filing and other improvements in the Tax Filing Simplification Act would ensure that more eligible people -- including millions of low-income Americans -- receive important tax refunds, like the Earned Income Tax Credit. The legislation would dramatically simplify the filing process for individuals with simple tax situations, direct the Internal Revenue Service (IRS) to develop a free, online tax preparation and filing service that does not require the sharing of private information with third parties, and prohibit the IRS from entering into agreements that restrict its ability to provide these services.
“Under the Tax Filing Simplification Act, most Americans would receive a tax return already prepared by the IRS. They could hit ‘submit’ and they’re done. Or they could make changes and then hit ‘submit’,” said Rep. Sherman. “Or they could simply ignore the IRS pre-prepared return and submit their returns just as they do now.”
The Tax Filing Simplification Act makes several common-sense changes to simplify and decrease the costs of the tax filing process for millions of American taxpayers by:
- Prohibiting the IRS from entering into agreements that restrict its ability to provide free online tax preparation or filing services;
- Enhancing taxpayer data access by allowing all taxpayers to download third-party-provided tax information that the IRS already has into a software program of their choice;
- Mandating that these data and filing options be made available through a secure online function and requiring any participating individual to verify his or her identity before accessing tax data; and
- Reducing tax fraud by getting third-party income information to the IRS earlier in the tax season, allowing the agency to cross-check this information before issuing refunds.
“Taxpayers waste too many hours and hundreds of dollars on tax preparation each year, which disproportionately burdens low-income and minority taxpayers,” Senator Warren said.
This approach to tax filing has been endorsed by tax scholars and a bipartisan set of policymakers. The bill is endorsed by the National Consumer Law Center (on behalf of its low-income clients), the Institute for Taxation and Economic Policy, Americans for Tax Fairness, Economic Security Project Action, the Hispanic Federation, and Americans for Financial Reform.