TAX SIMPLIFICATION
For years, Intuit has publicly called for simplifying the U.S. tax code. Simplification of the tax code is beneficial to taxpayers across the country. The appeal of simplification starts with enabling every individual and small business to more easily understand their taxes, thereby empowering them to make better financial decisions.
We help tens of millions of individuals and families take charge of their personal finances by helping them understand, prepare, and file their tax returns with confidence – more accurately and with greater ease – so they receive the maximum refund they are owed. We also work with millions of small businesses and accountants throughout the year, helping them organize their own business finances and meet their compliance obligations. Based on the insights we’ve learned from working with our customers, we believe there are a lot of good reasons to make tax code simplification the highest priority in tax reform. Here are just four:
- Help working families. There is a mistaken belief that lower-income individuals and families have simpler tax returns. All too often, nothing could be further from the truth. Low-income families often have multiple sources of income and a significant amount of income volatility over the course of a year. Unlike many W-2 wage earners, their incomes vary from month to month and require a significant amount of personal record keeping. In addition, one of if not their biggest paychecks for the entire year is their tax refund. For many, a large portion of their refund comes directly from some of the most complicated tax credits, like the Earned Income Tax Credit. Some of these credits are self-reported, making the tax prep and filing process a critical enabler of individual prosperity.
- Assist small businesses. Tax code complexity impedes small business creation, survival, and growth. Understanding the code is paramount to small businesses understanding their profitability and their long-term cash flow as part of their yearly projections. Tax code simplification can remove those obstacles, spur entrepreneurship, and reduce the regulatory burden on small business.
- Spur the economy. Simplifying the code will make it easier for individuals to participate in the sharing or on-demand economy. These sole-entrepreneur businesses, like hairdressers and freelance writers, allow individuals to take control of their professional lives or increase their income on their own terms, but the tax obligation is complicated. A simplified tax code can reduce the barriers and burdens of tax compliance for these self-employed individuals and the businesses that contract them, so they can focus on growing their business – creating wealth and jobs – rather than compliance.
- Achieve greater accuracy and fairness. Complexity causes inadvertent errors and omissions of self-reported information, shortchanging those who overpay and subjecting those who underpay to potential penalties and interest payments. Simplification can reduce errors, while at the same time strengthen the system by minimizing improper payments. It also improves the perception that everyone is paying their fair share because there are fewer loopholes.
No one set out to create an incomprehensible tax code that’s more than 2,600 pages long – it just happened, little by little, over a period of decades through thousands of additions and changes across several administrations and with bipartisan support. It doesn’t need to continue being this way.
VOLUNTARY COMPLIANCE
Intuit is dedicated to providing the tools, insights, and products that help people take control of their finances. We give our customers financial empowerment and advocate on their behalf. We help them budget, invest, save, and, at tax time, receive every dollar they deserve, while helping them evaluate opportunities to extend those dollars.
Core to financial empowerment is putting the individual at the center of their financial life, engaged and empowered to accurately file their taxes, including filing completely free of charge for those with simple tax returns. For two decades, Intuit has provided free tax preparation and has helped taxpayers file more free tax returns than all other online tax prep software companies combined, including almost 130 million free filings over the last eleven years.
However, this is just the start. Getting a tax refund is a pivotal moment when Americans can make smarter financial decisions that can change the trajectory of their financial health. Software providers like Intuit can use innovative technology to instill confidence in tax filers and provide benefits beyond the tax filing process that the government could never provide. After obtaining customer consent, we remove friction in tax prep by importing data into the tax return. We deliver access to tax and financial experts for personalized support free of charge or at a portion of the cost elsewhere. We use AI models to proactively intervene with customers when they may be making a mistake or appear confused in order to drive accuracy. We allow taxpayers to direct-deposit refunds into free, high-yield accounts or extend completely free refund advances, so individuals can save more and invest to make their money work for them.
For more than a decade, Intuit has also said that we oppose a government-run tax preparation system because it would not be in the best interest of individual taxpayers, as it creates an inherent conflict of interest by making the tax collector, investigator, auditor, and enforcer also the tax preparer. We will continue to proudly stand with the American taxpayer and their financial empowerment, promoting options for ways they can file their taxes, keep every dollar they deserve, and make informed decisions about their finances.