Believe it or not, there are senators who think like the rest of us, especially when it comes to filing the complicated annual federal tax forms. "Why is this so hard?" asks Democratic Sen. Dick Durbin of Illinois. "It's a hidden tax on Americans of about $250 a year," adds fellow Illinois Sen. Mark Kirk, a Republican.
But they're not just whining. Egged on by Kirk at a hearing this month, Durbin, chairman of the Senate Appropriations subcommittee that oversees the Internal Revenue Service, wants a disinterested IRS to look into drawing up software like TurboTax and offering it free to Americans on the agency's website. "We can eliminate the middle man," Durbin said. "It may save taxpayers money."
The idea was Kirk's, raised near the end of testimony from IRS Commissioner Douglas Shulman, whose $12 billion annual budget doesn't include any spending for free taxpayer software. Kirk estimated it would cost $20 million to $30 million to develop. He argued that Americans spend too much time and money filing taxes and that the agency should make helping taxpayers its priority. His idea: "That an American doesn't pay TurboTax, doesn't pay H&R Block, simply logs onto the IRS website, fills out their taxes in an accurate, complete way in which the software is handling all of the complexity, and the amount of time spent complying with federal law drops like a rock."
Shulman suggested, however, "I don't think it's quite that simple." Kirk responded that since the software companies have to check their programs with the IRS, it would probably be even easier for the IRS to do its own program since "you actually own all the rules."
Intuit, the TurboTax maker, notes that the IRS offers a service called Free File; however, it's limited to those with adjusted gross income of $58,000 or less. Shulman was saying that his agency had gotten lots of letters on both sides of the free software issue when Kirk declared: "Your mission should be to make it as easy as possible to comply with federal law, so this argument inside your shop should end in like an hour."
Durbin liked what he heard, noting at the hearing that his accountant died 15 years ago, forcing him to do his own taxes. "I'm a lawyer, I'm a senator. A tax return's not that complicated. I'll do it myself," he recalled thinking. It turned out to be difficult. "Every member of Congress should be required to do their own personal income tax return," he added. "I guarantee that we would have tax simplification overnight."