Voluntary compliance empowers Americans to determine and file their own income tax returns and to declare what they believe they owe the federal or state governments. In the United States, the citizen initiates the process of taxation, not the government. Only if the IRS or state revenue department tax collectors disagree with an individual’s return does that taxpayer have further proceedings with the government.
Since taxpayers must calculate their taxes and voluntarily file their returns, this is widely regarded as a critical check on government. The IRS, as tax administrator and collector, may examine the tax return for compliance and determine whether it believes additional tax is owed or what, if any, refund is due. ACTR members assist taxpayers in this core requirement and duty of citizenship. Each year, approximately 115 million Americans receive a tax refund.
ACTR members work to reduce the complexity of filing and can save taxpayers time and money, and often are asked to stand up for them if a tax agency raises questions or concerns with the resulting return. We note that, periodically, legislation is introduced at the federal and state levels that would fundamentally change the government role; such legislation would permit or encourage the government to send taxpayers a bill, or create a government-operated website where the IRS and state departments of revenue (DORs) would provide the taxpayer with government software to create their return.
Such a step is portrayed as a service to the taxpayer, but it would create a fundamentally different system than the American system of voluntary compliance. Legislation that leads to the disengagement of taxpayers from their own tax and financial affairs, or substitution of a government-created return is misguided and not in the taxpayers’ best interests.
