Wednesday, February 11, 2015

False Tax Filings and the future of the current tax system

The rush to computerization of the filing of income tax returns has resulted in savings in cost and increases in accuracy for both the government and the taxpayer.  The recent suspension by Turbo tax in on line filing has brought to light a weakness in the system of identifying and securing taxpayer identification and funds.  The purpose of those filing false returns is to gain access to funds from the government through refunds and credits.  It appears that the Federal Government is in better shape to deal with these false filings but the states are lagging behind.  For either group it appears that it may be time to rethink the complexity of the current system which creates the burden of massive filings and opens the door to massive fraud.  Perhaps with a much simpler system which did not require filings by individual taxpayer the opportunity for fraud could be substantially reduced to the point that it would pay for folks to try to commit the act.  This could take the form of a national sales tax with the elimination of the income tax for individuals or a flat rate taken from paychecks or some new and innovative point of taxation this scourge could be stopped and the cost of collection lowered for both the government and the taxpayer