This is the time of year when people waste hours of time and energy preparing tax returns. I have never met a single person who enjoyed preparing a tax return. I have never met a person who felt it was a productive use of their time. So why do we all do it? Why do we pay income tax? We do it for two legal reasons: Article 1, Section 8, Clause 1 of the Constitution gives Congress the right to both “…lay and collect taxes,….” and, The Sixteenth Amendment to the Constitution, ratified on February 3, 1913, states, “The Congress shall have the power to lay and collect taxes on income,….” So, in short, we are required by law, forced to pay taxes. Our government, the one we have formed and which answers to us, the citizens, forces us to pay taxes.

So what is the story behind “voluntary filing” of taxes? Here is what the IRS says: “The term voluntary compliance means that each of us is responsible for filing a tax return when required and for determining and paying the correct amount of tax. The tax law is found in Title 26 of the United States Code. And, 26 U.S. Code Section 6012 makes clear that only individuals whose income falls below a specified level do not have to file returns. While our tax system is based on self- assessment and reporting, compliance with tax laws is mandatory.” (

The simple truth is that there is nothing voluntary about compliance with tax law or filing of individual taxes. Both compliance with tax law and tax filing are required by law. You must do both or you will be subject to punishment. In other words, you are coerced to file and pay taxes by negative reinforcement. If you don’t do what they say, either you will pay fines or do time, or both. It is a simple Bully-with-a-stick forcing you to do what you don’t really want to do. As a result, most people do what they can to pay as little as they can, legally. In other words, the government gives us great incentive to avoid paying an extra cent.

Just imagine if the government decided, instead, to incentivize tax payment by saving you the cost of tax return preparation. Let’s imagine if the IRS each year sent you a tax bill, with the detail of their justification for the total bill. It would be much like the bill you get from VISA, with each individual transaction detailed. Or maybe it would be like the receipt from the person who sold you your latest car. It would list the cost of the base car, each of the individual add-ons, the cost of delivery, the cost of financing, etc., and the total you needed to pay for the car. At the end of the invoice it would show terms: Pay this exact number within 15 days of receipt – Late payments are subject to penalties and fines. Why can’t the IRS do that? If they know all of your income through receipt of the filings of each employer, each company paying dividends, each bank paying interest, etc., wouldn’t it be just as easy for the IRS to prepare the statement for you and send you the bill? Wouldn’t most people just take the discount (the savings in tax preparation costs), and, pay the bill like they do their VISA or utility bill?

I’m serious. Wouldn’t this save hours and hours of wasted effort on the part of the tax payers, not to mention the hours spent by the IRS to verify the filing? We have a huge tax-prep industry (estimated at about $11 Billion each year in revenue), including H & R Block, Jackson-Hewitt, Turbo Tax, etc., doing a big part of what the IRS is required to do by Congress – lay and collect the taxes. Just a note here – the IRS budget, coincidentally, is just over $12 Billion. Do we need all of the time, effort, and money spent preparing the tax returns, AND, all the time, effort, and money spent by the IRS confirming that the returns are correct?

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Here is how I think it works: First, the individual tax payer collects all the required information and forms. Next, he or she either enters the data into a computer program or takes it all to a tax preparer, or picks up the forms and instructions and fills out the return. He or she then sends the filing and any payment to the IRS. The IRS processes the filing to see if it agrees with the data they already have. They either find fault with the filing and communicate what they have found to the taxpayer or they agree with the filing, accept payment, and consider the matter closed. It seems to me that the IRS has both the technology the legal power to do a more accurate job of preparing the tax return. That, if true, would mean less communication between the IRS and the taxpayer. It would be up to the taxpayer to either hire a tax expert or to himself or herself challenge any errors that he or she finds in the IRS calculations. Wouldn’t that greatly reduce the amount of time spent by taxpayers and the IRS each year for the sole purpose of billing the public for their taxes? How many other countries have a similar system of “voluntary compliance” and individual preparation and filing of tax returns???

We would also save time and money if we changed a few of our taxing benchmarks. One opportunity would be the the over 88 Million income tax returns that are filed by people with income of $0 to $50,000 in the year. Do they all really pay enough in tax to justify the cost to prepare and file? Those 88 Million filers pay about $65 Billion in total to the IRS, out of $1.54 Trillion income tax collected/paid in 2018 . That is under 5% of the total tax dollars collected/paid in 2018. Yep. 88 Million tax returns (about 58% of the total) are prepared by/for those who pay only 5% of all income taxes collected. (above data from here)

So here are a few of my questions about our tax system:

Are there good reasons why the IRS doesn’t just send out bills, like any other enterprise?

What do other countries do?

Why do we have both a vast tax preparation industry (revenues of $11+Billion per year) and the IRS (budget of $12+Billion per year) plus the untold Billions of dollars expended in time and effort by taxpayers? Is there not a more efficient way?

And my final question, and probably the most important one, is: Why do we bother collecting a mere $1.92 Trillion dollars in income taxes (of the total 2021 U.S.Federal revenue of about $3.8 Trillion) to run our government for a year when Congress decides on a whim to print and spend much more than that each year (estimated to be just over $6.8 Trillion in 2021)?

I really would like answers to these questions.