CA Online Prefilled Tax Form

eric_92037February 11, 2009

I just got a notice in the mail from the State of California that my tax return was prefilled and ready for me to go online and verify. At first I thought it was a scam. I had no idea this service even existed. If only the IRS could adopt this program.

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This idea has been suggested for the IRS, but I don't think it will fly in practice.

Consider: Suppose for some reason you have income that the IRS doesn't know about. Maybe the 1099 form got lost in the mail, or there was a transcription error, or it was a payment from a foreign company, or the payer went out of business or died before sending in the tax forms, or whatever.

Anyway, now you get a pre-filled-in form from the IRS that doesn't include that income. What do you do? Whatever you answer, you're wrong.

Because if you say that you should report that income, as you are expected to do now, you have just said that even though the IRS fills out the forms for you, and you agree with them, you might still be expected to cough up extra money later if it turns out that the IRS didn't know about something.

On the other hand, if you say that you shouldn't report that income, you have just established the principle that if for some reason the IRS doesn't find out about it in time, you don't owe it. Which means you have just given the IRS the responsibility of tracking all financial transactions all the time, just in case.

Either way, I don't think this is a winning idea.

    Bookmark   February 12, 2009 at 11:22AM
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I hope the IRS never implements pre-filled forms.

How would they know our business expenses, the car expenses, donations, etc. when they vary so much from year to year?

Forget to change one pre-filled number and the whole thing is wrong... not good.

    Bookmark   February 12, 2009 at 11:34AM
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