Here’s Why the IRS Makes You Calculate Your Own Taxes in 2025
Written by
T. Woods
Edited by
Amber Barkley
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America’s tax code can be a rather tricky one, making the process of doing your taxes seem incredibly laborious — not to mention expensive. Year after year, taxpayers have to make their way through the complicated and costly tax system to discover whether they are owed a refund or owe the federal government taxes.
Ever wonder why you have to file a complicated return at all?
Reagan’s Attempt at Eliminating Tax Returns
Forty years ago, in 1985, then-President Ronald Reagan pressed for an American tax system that would be “return-free,” predicting that over 50% of taxpayers wouldn’t file at all — any taxpayer with a basic return would simply receive their refund or a letter notifying them of any taxes owed to the federal government.
Only taxpayers who chose to file their own taxes — which they could initially choose to do or choose because they disagreed with their amount refunded or owed — or who had more complicated returns would file the way all taxpayers currently do.
A More Recent Attempt
Additionally, chief economist for President Barack Obama Austan Goolsbee pushed in 2006 for a “simple return,” in which taxpayers would actually receive a completed tax form from the government and would only be asked to review the form for any errors.
Goolsbee argued this would save taxpayers at least $2 billion in tax preparation fees.
Why You Still Have To File
Those tax preparation fees, though, are exactly why taxpayers are required to continue filing the more complicated way, per the Nebraska Examiner, which stated that the commercial tax preparation industry continually lobbies Congress to keep the American tax system the way it is.
Free Filing Options Are Limited
Although there are free tax filing options — the IRS Free File program, for one, which partners with public tax preparation services — the government made a deal with the commercial tax preparation industry in 2002 to not compete in the tax prep market and not release a free tax preparation system, the Nebraska Examiner reported.
In 2007, the House of Representatives struck down legislation that would have enacted free government tax prep for taxpayers. In 2019, Congress attempted — but failed — to block the IRS from creating free online tax preparation.
The Private Tax Sector Profits
Time and time again, the private sector tax preparation industry has fought for survival by lobbying Congress not to impede upon its commercial territory, arguing they prevent tax mistakes and tax evasion. With the current complicated tax system, the private-sector tax preparation industry keeps itself necessary for taxpayers confounded by America’s laborious tax code.
More From GoBankingRates
Sources
- National Archives, “Address to the Nation on Tax Reform.”
- The Hamilton Project, “The Simple Return Reducing America’s Tax Burden Through Return-Free Filing.”
- Nebraska Examiner, “The IRS already has all our income tax data — so why do we still have to file taxes?“
