SACRAMENTO — California's tax agency is moving forward with a revolutionary -- some say disturbing -- concept: having the government do your taxes for you.
Instead of getting blank forms in the mail this month, a small group of taxpayers selected for a pilot program will receive a tax return that's already filled out. All they'll need to do is sign it, enclose a check if they owe anything, and send it back to the state.
The Ready Return project puts the state in uncharted territory -- and in the middle of the national debate over how to improve the way taxes are collected.
Experts are watching with great interest to see whether California is able to implement a system that is in effect in dozens of other countries but nowhere in the United States. It could ultimately be offered to more than 3 million Californians with uncomplicated returns.
"I think it is the most important tax move the state has ever made," said Joseph Bankman, a professor of tax law at Stanford University who is helping the state run the program. "It would make filing a tax return like paying a Visa bill."
Ready Return has sparked an outcry among conservatives and business groups across the country. Opponents call it Big Brother at its worst. They say they want a simpler tax system but don't want the government doing their taxes for them. They worry that if the program takes off here, it could spread nationwide.
Companies in the tax preparation business, such as TurboTax maker Intuit, H&R Block and FileYourTaxes.Com, say the state is overreaching. They have launched an aggressive lobbying campaign to stop the project. Letters denouncing the program as a cynical attempt to inflate people's tax bills are rolling in from as far away as Washington, D.C.
And nearly half the members of the state Assembly have signed a letter to the Franchise Tax Board, California's version of the IRS, saying the initiative -- which was launched without lawmakers' consent -- is "a dangerous precedent, leading us down a very slippery slope."
The legislators say they have concerns about privacy, taxpayer confusion and the potential for abuse.
"The proposal could have long-term negative effects on California businesses and families, yet is being rushed through with little debate," national anti-tax advocate Grover Norquist said in a letter to Gov. Arnold Schwarzenegger. The activist said the initiative "takes away one of the key taxpayer rights -- the right to make financial decisions to reduce one's tax burden."
