{"id":363807,"date":"2010-02-25T12:36:49","date_gmt":"2010-02-25T17:36:49","guid":{"rendered":"tag:business.theatlantic.com,2010:\/\/3.36605"},"modified":"2010-02-25T12:42:51","modified_gmt":"2010-02-25T17:42:51","slug":"will-the-new-tax-reform-bill-kill-hr-block","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/363807","title":{"rendered":"Will the New Tax Reform Bill Kill H&R Block?"},"content":{"rendered":"

Sens. Ron Wyden and Judd Gregg introduced what could be the most significant piece of tax reform in 25 years: the Bipartisan Tax Fairness and Simplification Act of 2010<\/a>. It dramatically streamlines the tax system, eliminates key deductions, and — crucially for taxpayers — invites the IRS to prepare easy-to-understand tax returns for payers to read and sign.<\/p>\n

I spoke with Roberton Williams, a senior fellow with the Tax Policy Center about the bill. He likes it, a lot. His first reason for liking it a lot is that it makes tax returns so easy that most taxpayers will be able to request the IRS to send them a one-page form to review and sign rather than go through tax preparer services.<\/p>\n

But what does that mean for the H&R Blocks of the world? Williams explains:<\/p>\n

What do you like most about this bill?<\/b><\/p>\n

The whole idea of simplifying the tax system makes a lot of sense. A
\nlot of people don’t understand how the tax system works. They’re
\nworried about other people finding benefits they’re not finding. If you
\ncan simplify it, you can get away from those problems. <\/p>\n

The IRS knows everything they need to know for most tax papers. They
\nknow your income from the W-2 and 1099. They know your mortgage
\ninterest. Presumably they know the charitable organizations that you
\ngive money to, because those organizations could report the amounts. If
\nyou put money into a 401k or IRA, a bank can report that. That’ s most
\nof what you need. The information comes to the IRS. Most of us do have
\nstraightforward tax returns. The IRS can do that. That would take a big
\nload off of people. As simple as it is, people should be able to look
\nat a simple tax form and say: “Yep, that’s what I earned. That’s what I
\ngive to charities.” It takes a lot of pressure off people.<\/p>\n

There’s a reason why almost 80 percent of us have other people do our
\ntaxes. We don’t want to be hassled. It’s easier to let the software do
\nthey job. I do TurboTax tax And I wonder why the numbers are what they
\nare. And I’m a tax expert! <\/p>\n

Does this mean the end for companies like H&R Block? Some
\ncompanies make a living by wading through tax return language. If the
\nsystem is straightforward, we won’t need it interpreted.<\/b><\/p>\n

It would not be good for the standpoint of the H&R Block’s of the
\nworld. It would reduce the demand for their services. I think about 60
\npercent of tax returns are done by services like H&R or Liberty.
\nIt’s a huge faction, because people know there are hidden extra
\nbenefits and they want to get them. <\/p>\n

But one of the things the IRS has found with preparers is that often
\nthey don’t follow the letter of the law. There was a study I think in
\nAlabama where they went to a number of preparers with a fake tax case
\nthat legally couldn’t qualify for the earned income tax credit. But
\nthis particular tax preparer’s thing was to tell people, “We’ll get you
\nthe EITC.” And guess what? In only one case did the tax preparers say,
\n“You don’t qualify for this credit.” You pay people a couple hundred
\nbucks for a tax return, you want a real return<\/i>. You want a credit. If you don’t get it, there goes the business model.<\/p>\n

Obviously H&R Block and companies like it won’t go down without a fight. Will they lobby against this? What can they say?<\/b><\/p>\n

That they employ thousands of people doing something that is no longer
\nnecessary? I don’t know. From a political perspective, you say, “We’ve
\ngot to do it because you can’t trust big government.” That’s it. That’s
\nall you can say. That’s the only argument i can see.<\/p>\n

{A fuller transcript of our interview, which breaks down the basics
\nand not-so-basics of the new major tax reform legislation is
\nforthcoming…}<\/i>


\n

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\n\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

Sens. Ron Wyden and Judd Gregg introduced what could be the most significant piece of tax reform in 25 years: the Bipartisan Tax Fairness and Simplification Act of 2010. It dramatically streamlines the tax system, eliminates key deductions, and — crucially for taxpayers — invites the IRS to prepare easy-to-understand tax returns for payers to […]<\/p>\n","protected":false},"author":1534,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-363807","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/363807","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1534"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=363807"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/363807\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=363807"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=363807"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=363807"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}