The Tax Filing Simplification Act of 2022 has been introduced in the Senate and the House of Representatives. This legislation would simplify the tax filing process for millions of Americans, saving hours of work and hundreds of dollars in fees. Along with lowering costs and eliminating red tape for all taxpayers, simplified filing tools would ensure that more eligible people – including millions of low-income Americans – receive important tax refunds, like the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC).
The Tax Filing Simplification Act of 2022 makes several commonsense changes to simplify the tax filing process for millions of American taxpayers and lower their costs. Specifically, the legislation:
• Prohibits the IRS from entering into agreements that restrict its ability to provide free online tax preparation or filing services.
• Directs the IRS to develop a free, online tax preparation and filing service that would allow all taxpayers to prepare and file their taxes directly with the federal government instead of being forced to share private information with third parties.
• Enhances taxpayer data access by allowing all taxpayers to download third-party-provided tax information that the IRS already has into a software program of their choice, saving time and decreasing the risk of math errors on W-2 income or CTC payments that lead to significant processing delays.
• Directs the IRS to expand the CTC non-filer tool to cover other tax benefits, especially the EITC.
• Allows eligible taxpayers with simple tax situations to choose a return-free option, which provides a pre-prepared tax return with income tax liability or refund amount already calculated.
• Mandates that these data and filing tools be made available through a secure online function and requires any participating individual to verify his or her identity before accessing tax data.
• Reduces tax fraud by getting third-party income information to the IRS earlier in the tax season, allowing the agency to cross-check this information before issuing refunds.
• Directs the IRS to expand the CTC non-filer tool to cover other tax benefits, especially the EITC, by March 1, 2023.
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𝐓𝐡𝐨𝐦𝐚𝐬 𝐉𝐚𝐦𝐞𝐬 𝐂𝐚𝐫𝐫𝐨𝐥𝐥, 𝐏.𝐂. 𝐢𝐬 𝐚 𝐥𝐚𝐰 𝐟𝐢𝐫𝐦 𝐟𝐨𝐜𝐮𝐬𝐢𝐧𝐠 𝐨𝐧 𝐟𝐞𝐝𝐞𝐫𝐚𝐥 𝐚𝐧𝐝 𝐬𝐭𝐚𝐭𝐞 𝐭𝐚𝐱𝐞𝐬 𝐭𝐡𝐚𝐭 𝐩𝐫𝐨𝐯𝐢𝐝𝐞𝐬 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥𝐬 𝐚𝐧𝐝 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬𝐞𝐬 𝐰𝐢𝐭𝐡 𝐭𝐚𝐱 𝐡𝐞𝐥𝐩 𝐚𝐧𝐝 𝐬𝐨𝐥𝐮𝐭𝐢𝐨𝐧𝐬 𝐟𝐨𝐫 𝐭𝐨𝐝𝐚𝐲 𝐚𝐧𝐝 𝐭𝐨𝐦𝐨𝐫𝐫𝐨𝐰.
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