Provide citizens with estimates on how much tax they owe
Provide citizens with estimates on how much tax they owe as well as refunds they will be receiving at the end of the year
- Transparency and simplicity: Providing citizens with the amount of tax they owe eliminates the need for complex calculations and allows for greater transparency in the tax system. It simplifies the process for taxpayers and reduces the potential for errors or misunderstandings when determining their tax obligations.
- Time and cost savings: By providing citizens with the exact amount of tax they owe, it saves individuals the time and effort required to calculate their taxes. It reduces the need for extensive record-keeping and tax preparation, potentially lowering the costs associated with hiring tax professionals or purchasing tax software.
- Increased compliance: Clear and transparent tax calculations can improve tax compliance rates. When individuals have a clear understanding of the amount they owe, they are more likely to fulfill their tax obligations promptly and accurately. It reduces the likelihood of unintentional underpayment or overpayment of taxes.
- Reducing errors and audit risks: When individuals calculate their own taxes, there is a greater chance of errors or unintentional mistakes. Providing citizens with the correct tax amount minimizes the risk of such errors, reducing the likelihood of audits or additional scrutiny from tax authorities.
- Reducing stress and uncertainty: Calculating taxes can be a stressful and time-consuming task for many individuals. Providing citizens with the amount they owe alleviates this burden and reduces uncertainty. It provides peace of mind, knowing that the tax obligation has been accurately determined by the authorities.
- Improved financial planning: Knowing the exact tax amount owed allows individuals to plan and budget their finances more effectively. It provides a clear understanding of the financial impact of their tax obligations, enabling better financial decision-making and long-term planning.
- Enhancing taxpayer rights: Providing citizens with the amount of tax they owe aligns with the principle of taxpayer rights and fair treatment. It ensures that taxpayers have access to accurate and transparent information regarding their tax obligations, promoting trust and confidence in the tax system.
- Reducing tax evasion: Clear and transparent tax calculations can help reduce tax evasion by minimizing opportunities for intentional underreporting or manipulation of tax liabilities. It strengthens tax enforcement and fosters a culture of compliance by making it harder for individuals to conceal or understate their tax obligations.
- Equitable tax distribution: Providing citizens with the correct tax amount fosters a sense of fairness in the tax system. It ensures that everyone is paying their fair share based on their income and other relevant factors, promoting equity and social justice.
- Aligning with international practices: Several countries have implemented systems where taxpayers are provided with pre-filled tax returns or clear calculations of their tax obligations. Adopting a similar approach aligns the United States with international practices, promoting efficiency, transparency, and international tax cooperation.
- Potential for additional services: When tax calculations are provided to citizens, it opens the possibility for additional services, such as online tax payment platforms, personalized tax advice, or access to digital tools that help individuals better understand and manage their tax obligations. This can further enhance the taxpayer experience and promote taxpayer empowerment.