ACTR does not support legislative or administrative efforts to direct the IRS to break from its well-understood and accepted role of reviewing the taxpayer’s voluntarily created return. There have been legislative efforts that would require the IRS or state departments of revenue to send the taxpayer a “bill” based on the government’s calculations of the taxpayer’s tax liability.
Such efforts, if implemented, would even more radically alter the American system of voluntary compliance, representing a fundamental shift in power away from taxpayers to the government. A government-populated return system also would exacerbate the inherent conflict of interest for IRS and state DORs, and create an incentive to subtly skew the tax calculation process to the benefit of government revenue collection to the disadvantage of taxpayers. In such a system, the IRS and state DORs not only would be the tax auditor, tax investigator and tax enforcer, but also the tax preparer.
Many taxpayers are likely to simply accept the government’s calculation of their taxes, and thus fail to obtain credits and benefits they are entitled to receive under law. Such a radical change in tax administration could lead to a back door tax increase because the government’s calculation of taxes may increase the actual tax owed. Furthermore, in a government-populated return system, the taxpayer would remain liable for errors, even if the government agency was responsible for the error in calculating the taxpayer’s taxes.
