Why file at all?
- By Thomas R. Temin
- Aug 15, 2002
Thomas R. Temin, GCN editorial director
Two recent developments at the IRS illustrate how far the government is from the nirvana notion of transformation.
Both developments'one a self-described baby step and one something grander'are decent achievements in their own right, to be sure.
First, the agency started testing a relational database, dubbed the Customer Account Data Engine, to replace its more-than-30-year-old tape file of taxpayer data.
If the CADE pilot works for data from the 8 million or so 1040EZ filers, the agency will start using it next year and, over a decade or so, attempt to convert all taxpayer data to the new system. For those of us who've been watching the IRS' systems tribulations over the years, even a pilot rollout of CADE seems huge.
Second, the agency has made peace with tax-filing companies and engineered a way for an estimated 78 million individual taxpayers to file online for free. It has been a constant source of irritation to many taxpayers that it costs more to file electronically than to submit paper forms.
Paperwork elimination intuitively seems like it should cost less. My wife works for a tiny accounting firm and few of the clients'mostly small businesses'want to file online, so she's always up to her neck in tax paperwork. The cost is one issue, but the mistrust people have of sending the family jewels, as it were, over the Internet, is another. Perhaps that will change now.
The big question, though, is why people'at least wage earners'have to file at all. The IRS gets all the necessary data from employers. It knows people's Social Security numbers and where they live. Localities could feed it property tax data, and lenders could provide mortgage data. A tool such as CADE could be linked to a subsystem that calculates payments and refunds based on tax rules.
Currently, filing requires doing scandalously complicated calculations, then entering and sending in data the IRS already has'or should.
It seems to me that true transformation would result in people receiving bills or refund checks once a year from the IRS'sans any taxpayer data exchange with the agency. Let's put that on the next version of the President's Management Agenda.