Digital IRS is costing those who can least afford it
Pro-paper group calls for a return to some traditional, tangible tax options
Thursday, June 16, 2016
Early in my career of writing about taxes my shelves and desk and file cabinets and office floor were covered in tax-related magazines, books, brochures and Internal Revenue Service issued tax booklets and forms.
Now it's my email box that's overflowing.
The world, including the tax world, has gone more digital. Although, as that photo at left shows, I still have plenty of actual tax and finance books (including -- shameless plug alert -- my "Truth About Paying Fewer Taxes" and the "Future Millionaires' Guidebook" that some of my Bankrate colleagues and I wrote) in my office.
One group, however, is looking to shift, at least in some situations, back to more traditional tax ways.
Consumers for Paper Options (CPO) says the IRS' move to more and more electronic forms, instructions and publications does a disservice to the millions of Americans who still prefer paper when it comes to their taxes.
Everyone isn't online: While the e-tax policy makes sense for those who are comfortable filing electronic returns, citizens who don't have access to computers, or the skills to use them, face a challenge, argues CPO.
Yes, some U.S. Post Offices and public libraries still distribute paper tax material during the main filing season. But there tends to be fewer forms and publications, both in number and variety, at these locations.
And yes, you still can ask the IRS to send you some paper forms and instructions via mail.
But the instructions on how to order them is, you guessed it, on an IRS.gov web page.
CPO says the IRS' increasing paperless policy makes it difficult for citizens in rural areas who have no access to the internet and are miles from nearby post offices and libraries.
Reduced tax help, too: The Washington, D.C.-based group also takes issue with the IRS decision not to make Publication 17, Tax Guide for Individuals, available in print form upon request.
On its website, CPO says the publication, which is updated annually with the latest tax law changes, "is a critical resource for every American who files his or her own tax returns."
Lest you think CPO is being a bit hyperbolic in its praise of Publication 17, the IRS itself touts what a valuable resource it is for filers.
"Taxpayers can get the most out of various tax benefits and get useful tips on preparing their 2015 federal income tax returns by consulting" IRS Publication 17, which "is packed with basic tax-filing information and tips on what income to report and how to report it, figuring capital gains and losses, claiming dependents, choosing the standard deduction versus itemizing deductions, and using IRAs to save for retirement," according to a March 18 IRS press release about the updated filing guide.
In that same announcement, the agency notes that the free comprehensive tax guide can be downloaded at IRS.gov.
Paying for print: Publication 17 is not, however, available in print format.
"The IRS is neither offering the income tax instruction booklet to individual filers, nor is it equipping libraries or post offices with the booklet for distribution, as it has done in the past," according to CPO.
That's verified at the IRS page with instructions on how to order some paper tax forms and instructions, with the red highlighting and bold type by IRS:
NOTE: Publication 17 is not available in paper format. Please download Publication 17 at IRS.gov/pub17 if you need a copy.
If you insist on a paper version of Publication 17, you must pay for it by ordering it from the Government Printing Office. Earlier this year during the main tax-filing season, the going price for a printed Publication 17 was $23.
A check of the GPO website today shows the booklet discounted to $10.
Sure, it's 286 pages, but still, a Hamilton is a lot for a lot people to pay, especially when they're simply trying to do their civic tax duty.
"The decision to stop printing Publication 17 completely overlooks the needs of the quarter of American households without Internet access, not to mention the 45 percent of senior citizens without a computer," says CPO. "These taxpayers must be able to obtain tax instructions in an easily accessible way. Instead, the cost of printing Publication 17 has been transferred directly to Americans who can least afford it."
Tax identity theft an issue, too: The pro-paper group also points to the explosion of tax return fraud and identity theft as the IRS has gone more digital.
"In recent testimony before the Senate Finance Committee, the Government Accountability Office testified that the IRS has seen a 400 percent increase in fraud and identity theft directly related to the e-filing of tax returns since 2008," says CPO. "It is little wonder that many citizens choose to file a paper return due to concerns about identity theft."
And if you've had your ID stolen by a crook who used it to file a fake 1040 under your name, the IRS requires you to file your legitimate tax return on paper.
Complete Form 14039, Identity Theft Affidavit, using the fillable form option at IRS.gov then print it out, attach it to your true tax return and mail the filing to the IRS.
Pros and cons of paperless: Consumers for Paper Options makes some valid points. But I also must point out that the group is organized by the American Forest & Paper Association (AF&PA) and the Envelope Manufacturers Association (EMA), two industries that stand to lose a lot as we transition to electronic lifestyles.
CPO doesn't hide its paper production connection. And neither does that origin necessarily invalidate any of CPO's arguments. I know lots of folks who still rely on and prefer paper options for all sorts of transactions, including taxes.
National Taxpayer Advocate Nina Olson has raised similar concerns as the IRS moves ahead with its Future State plan.
A shift to a more impersonal electronic IRS, says Olson, could "leave taxpayer needs unmet and force millions of taxpayers to pay for help, and generate additional taxpayer frustration with the IRS."
But I also see the IRS' point of view. As the agency continues to face challenges from Congress, including reduced funding, it must find ways to compensate. Going digital is one of those options.
As the world, tax and otherwise, continues to change, taxes must and will follow suit. But we need to find ways to make sure those late adopters aren't left behind.
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