Simplifying Tax for the Average Citizen Joseph Bankman Ralph M. Parsons Professor of Law and Business, Stanford Law School [email protected]

Simplifying Tax for the Average Citizen

Joseph BankmanRalph M Parsons Professor of

Law and Business Stanford Law School

jbankmanstanfordedu

Compliance and Other Costs Borne by Average Taxpayers

bull Tax system imposes large compliance costs on businesses and high-income individuals

bull Tax system also imposes compliance costs on taxpayers with ldquosimplerdquo returnsndash Whatrsquos a W-2 1099 Should I hire a preparer

Which preparer File myself Which return Have I saved all the records Understood the form Copied numbers correctly Done the math right

ndash Economists measure costs as function of time and money but canrsquot measure anxiety frustration and anger

Many of These Costs are Unnecessary

bull Tens of millions of taxpayers (3 million in California) have only wage income even more (4 million in California) have wage income and less than $200 interest income and donrsquot itemize

bull The State now checks return against reported wage data and checks math

bull If the Statersquos numbers are different than the taxpayerrsquos numbers the State sends the taxpayer a deficiency notice

bull Why doesnrsquot the State start the process off by telling taxpayers the information it has and the tax liability it thinks that information produces

bull Because State already has info inexpensive to produce

Compare a Tax Return to a VISA bill

bull VISA doesnrsquot send taxpayers a blank sheet and ask customers to write down all their transactions

bull Instead it lists the transactions it has in its computer

bull Customers insist on this ndash and not just because it saves time and effort

bull Customers need the list so they can look for mistakes or false charges

California ReadyReturn Pilot

bull A 2004 pro-forma or ldquoReadyReturnrdquo sent to 50000 taxpayers who had only wage income in 2003 ReadyReturn also available on-line

bull ReadyReturn shows 2004 data reported to FTB and tentative tax liability

bull Taxpayers have option of filing return as written correcting return using data on return to get head start on filing a traditional return or giving return to preparer

Pilot Program Results

bull Despite no advance publicity or mailings 15-20 of taxpayers filed ReadyReturnndash Of course more presumably used

Ready Return to help prepare their own returns

bull 99 of taxpayers surveyed who used the Ready Return said theyrsquod use in next year ndash (Preliminary results based on e-filing

taxpayers who completed survey)

Comments Tell the Storybull ldquoFantastic Servicerdquobull ldquoBest thing in the worldrdquobull ldquoWhoever thought of this deserves a big fat raiserdquobull ldquoThis is a great program and one that everyone should

be usingrdquobull ldquoGo Governatorrdquobull ldquoWow Government doing something to make life easier

for a changerdquobull ldquoI hope I can file my federal return the same way next

yearrdquo

See Appendix for comprehensive sample of comments

Minor Criticisms

bull Some comments point out flaws in the ldquobetardquo version of the ReadyReturnndash For example some taxpayers were confused by the

use of the term PIN bull These useful criticismssuggestions could easily

be dealt with in future yearsbull All the comments received in the first survey are

reproduced unedited at the end of this presentationndash Returns and comments are still coming in Later

comments are consistent with earlier comments and omitted for space reasons

Bi-Partisan Support

bull Leading Officials from Reagan Bush amp Clinton Administrations

bull Wide array of tax scholars and policymakers

Opposition of Libertarians and Others bull Taxpayers will be intimidated into accepting the statersquos numbers

ndash Taxpayers had no trouble saying ldquonordquo and those who used the program loved it

bull Privacy concerns ndash Program requires no new information and enhances privacy rights

by letting taxpayers know what info government already has

bull Program will deter ldquorealrdquo reformndash Connection between this proposal and other reforms is unclearndash Taxpayers might not agree as to what constitutes ldquorealrdquo reform

what they agree on is that this program makes their life a little better

What about Tax Preparers

bull This wonrsquot affect most preparersbull Some preparers feel theyrsquove got a franchise to

protect and have opposed programbull One false argument public sector competes with

private sectorndash Government could contract out with private

sector to send out notices or maintain web sitendash Real issue is whether taxpayers would find it

useful to know the information already reported to government and the tentative tax liability that stems from that information

Making Taxes and the Tax System More Visible

bull Filling out a tax return mostly tests reading math and record-keeping skills and leaves many taxpayer worried they have made mistakes

bull We could increase the visibility of taxes and the tax system by adding information to the ReadyReturnndash We might include in bold-faced large type the total tax

paid and the marginal and average tax ratesndash We could add information on payroll taxes paid etc

Maximizing Taxpayer Choice

bull ReadyReturn maximizes taxpayer choices ndash Taxpayers can file ReadyReturn correct and

file return use return as starting point to complete return ldquoold fashioned wayrdquo etc

bull Itrsquos hard to see why taxpayerrsquos wouldnrsquot want the information in a ReadyReturn but if they donrsquot we could allow taxpayers to opt out of receiving correspondence

Extension to Federal Returns

bull Issuesndash EITCndash Timely wage data

bull Compared to other reformsndash Much easier to implementndash Scalable can begin with a pilot program

Sample Ready Return letter

Step 1 Carefully review your return The income information was provided by

1048713 ACME COMPANY

Step 2 Make any needed changes If you have other income or need to make other changes you can do this at our Website Your data is already there Wersquoll guide you through updating your return

Step 3 File your return Once yoursquore ready to file your return you must sign it to agree that itrsquos correct and complete Go to wwwftbcagovReadyReturn and e-file Yoursquoll get confirmation that we received your return and the ability to schedule an online payment

If you do not want to participate in this pilot complete a new return yourself use tax preparation software or visit a tax preparer You can use the enclosed return as a starting point for completing your new return

Appendix Taxpayer Comments on Pilot

bull The following slides contain all the taxpayers comments received by late March

bull These comments have not been edited in any form

bull Comments from later surveys are consistent and have been omitted only for space reasons

Direct Quotes from the ReadyReturn Pilotbull Great Pilot Makes my life easierbull This is great and easybull Great program and easy to use although I am computer illiteratebull Wonderful Wish the Feds would make it this easybull Wonderful service Irsquom highly satisfied I was disappointed at first not to have tele-file but after receiving my invitation and seeing what

was prepared and done for me I was very pleased I would love to have this service againbull Very satisfied and impressed with this new method Loved e-filinglove the readyreturn even morebull I wanted to direct deposit my return but it submitted before I had a chance to do so You should put the direct deposit 2nd instead of 3rd

I am using a Mac and the view return opened system profiler As a result even though I had looked at it using Adobe Acrobat 5 your site did not recognize that I had to click o

bull I was not able to type in my middle initial R Other than that I was happy with the program and I hope it will be available and free in the future Thanks for keeping up with the times and making it an easy program to use

bull THIS IS A GREAT PROJECTbull This is the simplest most convenient tax filing system ever I really am impressed Thanks for including me in the pilot programbull It made my simple tax return a COMPLETE no-brainerbull Thank you for inviting me to use this pilot program I was dreading having to do them since the Telefile was canceled My taxes are easy

enough it is just taking the extra time to get the taxbooklet and worksheetbull Was not clear about what a PIN number was I thought it was something in the letter Looked all over for it Finally found it in the FAQbull Line by line 540 Instruction manual was hard to findshould be very conveniently avail With the ready return for reference otherwise a

very good processbull There is only one issue I noticed while preparing my taxes using your e-file program None of the help items I selected displayed a help

page all came up with an Error404 Page not available Other than that I would like to thank you for the work that went into this service and hope to be able to use it for years

bull ReadyReturn was very easy and convenient Thank you for the invitationbull Great pilot program it makes folks that have easy returns to actually file and not have to populate all of the tax withholding information

kudosrdquobull I had difficulty in the password in that it required numbers not letters Otherwise quite a good program Thank youbull I wish you would continue the Telefile sytem Not everyone has access to internet I had to go to a friend I like doing my taxes on the

phone so easy

Direct Quotes from the ReadyReturn Pilotbull This is the first time for me I enjoyed the experience However your figures were not the same as my W-2 I received from my employer

I corrected the income amount from my w-2 and all is wellbull Fast easy and free Great programbull Thank you for choosing me for this pilot program I love it I hope I can file my federal tax return the same way next yearbull This was a great time saver For someone like me who doesnrsquot make a great deal of money it makes the tax time easier Thanksbull In the 5 digit signature section state that the 5 digits are of my own choice and not a predetermined selected by the State as we are used

to I finally saw that it was my choice when I viewed my return on Adobebull I was unable to write down the DCN number on the final screen because the ReadyReturn Easy as 123 logo obscured the number

Otherwise very cool servicebull The button for choosing direct deposit was after the signing and submitting form The steps never took me back to put my direct deposit

info in so I guess the checks coming by mailbull For some reason when I tried selecting the button while completing my taxes it would never take me to the website it needed and default

to a statement that said cannot find that address I found away around this though Otherwise a very well done and very easy to use system which I will use from here on

bull The screens to change the data were not very user-friendly and there were no help options for each item I am a web designer and I had difficulty knowing I was to add the information from my federal itemized tax return document to the fields on the screen to itemize for my state return

bull Survey took longer than the efiling Great it is easy and free Lets see if the refund comes as quicklybull This was an incredible experience I hope that this service is available next yearbull Once I was able to get into the page This was the easiest and the fastest experience I have ever had filing my taxes I also called the 1-

800 number and received excellent help Thank you all so much One less headache with taxesSomeone is finally thinking about usThanks again

bull Could not access website wwwftbcagovReadyReturn----I tried everything for over an hour finally I telephoned Was told not to capital R in ready R in Return I had already tried lower case

bull Very convenientbull I thought this was a great pilot program It was easy effecient seemingly safe and caught a mistake I would have made if I had paper-

filed I wish that I could do my federal taxes the same waybull This is an awesome pilot program that is easy to use a time-saving option for tax preparationbull I have never considered filing online before but would definitely do it again next year I had to make changes to my return but this was

still easier than I thought it would be Good Job with the program

Direct Quotes from the ReadyReturn Pilotbull Thanks for providing a free opportunity to filebull Good program-hope to see it in the futurebull I had a problem at first getting it to Submit but after a speedy reply to my problem email a very helpful person steered me in the right

direction Very professional Hats off to FTB and ReadyReturn See you next year bull Thank you for choosing me to particapatebull Though I only speak English I think the e-file form should be available in all languages upon prior maybe 6 months written request for

uncommon foreign languagesbull Again so coolbull Thank you for choosing me to participate in your pilot program I would love to be involved againbull This was great and a lot easier than I thought it was going to be Thanksbull Your site worked well with my browser Firefox I appreciate this compatibility Some tax sites only work with the insecure Internet

Explorer browserbull Great new program Quick and easyI LOVE ITbull Thank youbull The instructions need to be clarified it took three passes to successfully submitWhy force a print out if you make no changes I had

already completed my tax form and agreed with your mailing Your pilot project is headed in the correct and proper direction Good luckbull I would like it if I were able to file earlier as I have only have one employer and always file the short form Direct deposit is the most

important thing to me and I felt confident that I was given the proper instruction on the computer and the phone I enjoyed filing my taxes since it had already been figured out for me

bull I would file with e-file every yearbull Thanks it was much easier and less hassel Hope this way is secure yes I would use it againbull CA State method of e-filing is easier than Fed Still filed using hardcopy and snail mail for Federal return because I didnrsquot see a

Government run e-filing site pagebull Excellent program Very convenient and secure will definitely use againbull Thank you for inviting me to participate This made doing my taxes easier to understand and completebull Thank You California FTB this was wonderful I hope you continue to offer this in the future Please pass this comment to our Governor

This is one of the best products offered by the state that saves time and money for the average Californian and makes tax paying a pleasant experience Thank You

Direct Quotes from the ReadyReturn Pilotbull ReadyReturn is the best thing in the world It was great finding out that my state tax return had already been filled out and was ready to

file It saved me a lot of time and it was very easy to understand not confusing at all I appreciate that the Franchise Tax Board is willing to put the time and resources in

bull WowGovernment doing something to make our lives easier for a changeThe Feds should take noticebull Please make it this easy to file federal taxesbull For myself this new program for filing my taxes is good Although I do have concerns for elderly or disabled taxpayers some of whom

may not have internet accessbull I thought this was great very simple to usethanks State of California you save me 20 bucksbull I hope this will be available next yearbull Thanksbull Good Jobbull It was great Please provide the service next yearbull The section that requires a PIN I was unclear if this was a number that I already had or if I was supposed to come up with onebull Thank you for inviting me to participate in the pilot program I hope it is successful and will be repeated next yearbull At one point my browser froze and had to close As a result I did not go to the page to donate part of my refund Irsquom not sure if this was

the websites fault or my browserbull I had never used an e-file before today I was impressed on how easy this was to do and I would do it again because it simplifies

everything not to mention that I would get my refund a lot fasterbull Great stuff go governatorbull Thank you for the invitation It was fast and easybull It was nice not having to pay a fee for filing with the statebull Thank you for making this available Its quicker easier and cheaper than my previous methodbull Excellent Great Amazingbull Wonderful servicebull Font is too small It was hard to read Reading the directions and disclosures took the longest amount of timebull Wow What a pleasant supprise So very convenient and fast Thanksbull I really hope this program works because I really really like it Great job and Great Ideabull Thanks for the invitation

Direct Quotes from the ReadyReturn Pilotbull Made my life a lot easierbull I had trouble opening the online version of my return I think its because I have a Macintosh Please check it out I use OS1021 and

Acrobat Reader 602bull The final question asks for a five digit PIN number You should clearly define where to find that numberbull Thank you very much this was an incentive to file my return fasterbull I would definitely prefer this method to others I have used in the past including telefile Thanks for the invitationbull I think the idea behind ReadyReturn is sound and should reduce the stress and dread of tax time Having all the information available

both on paper and on the internet and the convenience of taking only 5 minutes to file is a welcomed way to quickly and effortlessly complete and file your taxes Thank you for

bull THANKS FOR ASKING ME TO THE PILOT PROGRAMbull This is an excellent choice and if I have this option again I will definitely use it Great ideabull This is greatbull You never anywhere state weather we as a taxpayer have to send anything other than what you generated onlinebull I feel this is a great program It is easier to understand that other tax sofware I hope this will be available to me again next yearbull From the letter it is not clear on internet access did not ask to use http I did call and had a very good response from your online

assistance I have done online support myself and found your assistance very goodbull Irsquom happy this only took approximately 10 minutes and no more stressbull I really missTelefilebull Thank you for such an easy tax returnbravobull ReadyReturn was very fast and very easy If given the opportunity again I was use this method to file my returnbull Had problems using Adobe Acrobat reader to view return I called the toll free number given and was pleased to reach a live person

They were helpful I would use this again because it made filing very easy Thanksbull This was a very easy process and I thought my taxes couldnrsquot get any easier I think this would benefit people who havenrsquot filed before to

guide them through the process and show them that its nothing to be afraid ofbull You should have clarified the PIN number I had to call to find out what it wasbull Thanks for making my filing so much easier this year I hope you keep this around forever Whoever thought of this deserves a big fat

raisebull If you keep this pilot can it come out any earlier The middle of February would be greatbull I think everyone should be able to do this by e-mail

Direct Quotes from the ReadyReturn Pilotbull FANTASTIC service Please implement tthis programbull I hope this service becomes standardized Quik and convenientbull I think this is a wonderful service and I hope I can file this way again next year It was very easy and saved me some moneybull Great keep up the good workbull Works for me-thanksbull It took a few minutes to actually find the ReadyReturn portion of the website I had expected it to be more prominently displayed Instead

I first went to CalFile Also I think there should be a separate screen for direct depositmdashwhich I wantedmdashbut apparently missed the opportunity to indicate that

bull Thank you for making it easier to file my Tax Returnbull Keep up the good workbull Need to have a Quick Link to access the Pilot Program It took 3 times to enter the system because of manual typing addressesbull There is nothing about direct deposit with efile Nothing mentioned about length of time to receive paper checkbull This was the best way to file my state taxes If filing becomes this easy it would eliminate all stress associated with filing your taxes

Thank you for allowing me to participate in this pilotbull I would love to be able to use this service every year Also I wish the Federal Tax Board would offer this servicebull I think this is a great pilot program It makes filing easier Great jobbull Thank you for making this available Yoursquore greatbull Make a note in the instructions to edit the tax return if one would like to use direct deposit Granted that is very much user error on my

own part unfortunately I caught it after submitting Along that thread would be nice if there was information for amending after submitting should an error be caught then

bull This was so easy I wish that this program were available for my federal return I would definitely use this again next year-great systembull Keep me on your invitation listbull An additional line for the Federal Adj Gross Income figure in the worksheet would have made it simpler to edit Ca return to match my

Federal returnbull The only trouble I had was the pinbull It would help if the readyreturn link was easier to find It took me a couple of passes through the site before I actually found the

readyreturn page link thankyoubull Thanks for allowing me to participate in this pilot project

Direct Quotes from the ReadyReturn Pilotbull This has made my life a lot easier Thank youbull Thank you so much for making something that always is stressful much easier I was able to understand the procedure and felt that I was

in control of what was being done with my taxes instead of someone preparing it for me I think this is greatbull THIS IS A GREAT PROGRAM AND ONE THAT EVERYONE SHOULD BE USINGbull I really like this program I am not really good with math and this helped me a lot However I missed the part about having my return

direct deposited into my account bull This was greatbull I think this was a great service to provide It saves time and moneybull FANTASTIC IDEA GREAT EASY PROGRAM THANK YOU FOR THE OPPOTRUNITY TO PARTICIPATEbull I think it is great that the state is finally using technology to benefit the residents Paying taxes shouldnrsquot be so complex I am very happy

that this program is available and it should save the state millions of dollars in resources Good job Californiabull Thank you this was fast and easybull Tele-File and E-File without having to purchase extra software are very good optionsThey are the fastest and best way in my opinion

Paper filing is still necessary for those who donrsquot like the internet However I feel that E-file will become more popular Starting it now and developing it is a good idea

bull Thank you for making it easier for peoplebull THERE WAS NOWHERE TO INPUT MY BANK INFO FOR DIRECT DEPOSITbull The site was very easy to follow and understandbull Thanks for making it quicker for mebull Great idea super easy keep up the good work Save taxpayer rmoney by using this type of friendly government websitesbull It was great Took away all my worriesbull This was great for people with one job and nothing else If I had more than one income I might not file this waybull This new pilot is easy and quick This is my first time so I really liked itbull When I received the letter in the mail and saw who it was from I thought Oh no audit time But this was so cool For some reason the

Federal is so much easier to do and file now you made filing my state income tax so much easier Thank youbull I hope you continue this program and that I can use it again next yearbull I had difficulty accessing my file and had to use the FTB search engine to access it ftbcagovReadyReturn didnrsquot workmdashthe search

engine added the indexhtml which workedbull VERY SATISFIED

Direct Quotes from the ReadyReturn Pilotbull This has been a great experience Never before has it taken 5 minutes for me to file my taxesbull This was WONDERFUL what a great way to file my state taxes I wish the federal was as easy Itrsquos a no brainer I hope I can do it this

way for the following years Thanks so muchbull Incredibly convenient way to filebull If federal taxes was this easybull This is an awesome and amazingly easy application Thankyoubull It was the bestbull This was great I would like to be able to do the same with my federal return as it fairly simple like the state tax was Great way to save

moneybull Love it what a great time money saverbull THIS WAS FABULOUS IT SAVED ME LOTS OF TIME AND HAVING TO COMPUTE SO EASY I WOULD RECOMMEND THIS TOOL

TO EVERYONEbull This was great hope u do it every yearbull I like it Its easy since I do not have any other deductions Thanks for doing thisbull Thanks for including me in the pilot programbull I received a letter sent previous e-filers that the CSN was no longer needed toE-file I could not get the program to work as described in

the letter signed by [FTB] The phone call to learn the letter was in error was a waste of my time and the letter was a waste of FTB time and money I ft

bull This is great service from my government I love the invite and wish the feds would do the same Good work and thanks from this taxpayer

bull Everything worked great The taxpayer pin number thing seemed a little arbitrary since I already provided my soc sec Why not just ask for the date of birth like the Federal govts telefile

bull This was a very easy way to file and I would definitely like to do it the same way next yearbull Thanks for this option Irsquom always confused when I have to do my taxes and usually need help It was nice and very convenient to have

the form already filled out with all my information Irsquom definitely not stressed out about doing my taxes because it was so easy I would definitely use this service again next year

bull I would appreciate the teacher tax credit being reinstatedbull I thought the Requirements needed to E-File were a little confusingbull Thank you for providing this great service

Direct Quotes from the ReadyReturn Pilotbull This was great Thanksbull I really enjoyed using this program Thanks for choosing me for the pilot program It was so simplebull It was Great Fast easy and reliablebull Thanx guys This was really quickbull Assigning your own PIN number was rather confusing at first as it would appear to me that the tax return would have had print outs like

the access code--not sure I was able to just use a radom PIN--it was okay but didnt make sense to mebull In step 5 line 20 I would feel more confident in the information provided if the tax table was either included in the invitation or displayed

online while filing When I reviewed my tax return form online the amounts and lettering were superimposed my confidence in the system faltered some but since the figures did calculate to the same amounts I continued

bull after viewing the return I was confused about how to close down the window showing the return and I just took a chance at closing the window by clicking the x button The return said I should use the controls on the bottom of the screen

bull keep the program goingits greatbull It took me two days to get the website to comeup and thirty minutes this morning That is why the time listed above was so long I almost

gave up and mailed the paper returnbull I was unable to view the return but was required to check the box in order to file my returnbull I am not sure if I clicked the direct deposit button I was only given the option once and after signing my return was not offered it again

Also-the PIN choice was not well described secure I expected you to provide a PIN to me How secure is a signature when the user chooses 5 numbers out of the blue How do you know its me

bull why cant I file my federal tax return here toobull I called the 800 that is on the ready file for help the lady that assisted me was very kind and helpful I wish that I would have written

down her name to give you but unfortunately I didntbull I THINK THAT THIS IS WONDERFUL AND CONVENIENT THANK YOUbull The pdf veiwing buttons did not work very well with Firefoxv10PR According to the instructions in the pdf it should have opened in its

own window because it says to close the window once I veviewed my return However because it opened in the same window and did not include an in site back link I had no choice but to use my browsers back button and resending post data after the final viewing which then counted as thee-file submission Alsobecause the system uses a button to view the return I did not even have the ability to right-click and force it to open in a separate window

bull Great program donrsquot let this end

Direct Quotes from the ReadyReturn Pilotbull I really liked the tele-file method but this is nearly as quick and provides a paper trail that is comfortingThanks for allowing me to test

drive the program I would like to use it next year as wellbull The Ready Return system made it so quick and easy to file my tax return that I felt a marked decrease in anxiety over the whole process

I d love to see this program implemented on a national level toobull Dont change a THING This WORKSbull Thank youbull THANK YOU FOR THE INVITATION TO USE READY RETURNbull very convenient and quick-keep up the good workbull The ready return made it easier for me to file my Cal tax returnbull Though I am very pleased with Easy Return I chose to answer No on item1a because the section explaining how to sign the document

by using the PIN was very confusing to mebull Ready Return does not work properly with common browsers on the Apple Macintosh this must be remiedied Many Californians use

Apple computers 2 After filing my return I was not given any link or information to pay the amount I owe Im now left confused how do I pay What do I do Do I waste time trying to call and find out What I will probably do is just send in a paper 540 form and my check which means that Ready Return saved me ZERO time

bull Under question number 1 Ready Return kept my personal information secure makes no sense as I cant tell if Ready Return kept my information secure or not

bull Excellent Programbull Ive read in the newspaper that some groups people object to this service stating that the government shouldnt be determining how

much money someone gets back Im getting more money back with government doing my taxes than I have before with my taxpreparer doing it so I dont agree with that objection If this program is offered in the future please keep my name on the list

bull very easy hope it is available in the futurebull logged on to the web and had a hard time getting to ready return page too much clutter it should go directly to the ready return page

After that it was easy Should make note on your final page to sign form LAST after entering direct deposit I almost did the reversebull This is an excellent website I have worked with a number of municipalities across the state and have seen how bad some of them waste

money on inefficient use of manpower Seeing this website has given me hope that the state has some sense to itThis is a good investment for California I see the potential saving to California in the tens of millions of dollars just by the saving of postage paper and manpower It is about time California looked at ways to improve its bottom line

Direct Quotes from the ReadyReturn Pilotbull Thank you very much for the opportunity to file my taxes this way I loved itbull Thank you very much I loved Ready Return It was easy simple and most importantly FREE Would use it again next year given the

opportunity I just wish Federal did it like thisbull I do hope that the federal government catches on and some how links CA to their resources so that I can be a happy camper with the

federal government as I am now with my state of CaliforniaThanks Californiabull Loved the servicebull This was easy convenient and free You cant do much better than that Good jobbull I was not given an opportunity to pay online I have to go to another website to pay I was given a dcn without payment options bug in the

system I liked it It matched what I thought by doing it myself and seeing what was provided for mebull you need to clear up the PIN instructions Thank You very happy took me minutesbull This process didnrsquot save me as I had already purchased the softwareIt would be great if the information could be provided earlier That

would eliminate having to make unnecessary purchases Thank you for the opportunity to participatebull Thank you for this invitation it was very helpfulbull THANK YOU For once our Government has somehting beneficial for everyonebull Getting my taxes done stresses me out but this made it a lot easier for me I liked being able to do it my self instead of having someone else

do it for mebull I found Tele File very easy It was not clear that Telefile was not available and took time looking for it If I had no computer then telefile

would be the tool-it should still be offeredbull An option to only correct name and or address should be provided up front so that an individual does not have to step through the paper

return you provided Some of the questions were alittle confusing and were not necessary since all had to do was change the addressbull I like the phone one better but this one is okay The last part when they wanted a 5-digit pin was sort of confusing I didnrsquot know if I had to

make one up or if it was in the forms somewherebull you should have a close button on the tax form itself It gets confusing and hard to determine which button closes the window and which are

internet disconnect buttonsbull Thank you for allowing me to participate in this pilot programbull This was very easy and convenientbull Though I was able to finish within minutes the 2nd time I had some problems over the weekend when I first started meaning the site was

not available Not sure if there were some connection problems on your site but I was not able to Review and therefore could not complete the return at that time Otherwise I really liked submitting my return this way it is really easy and very convenient plus there are no extra costs involved Thanksrdquo

Direct Quotes from the ReadyReturn Pilotbull I loved it it should save both of us time and moneybull If refunds will indeed be issued much faster and provided my return was received without any problems I think ITrsquoS A GREAT

IDEA PSIS THE SAME SERVICE AVAILABLE FOR FED TAX RETURNS I WONDERbull Thank you for your help Have a great and positive daybull This made it easy to file I only needed minor changes to my return such as the renters credit I did have problems opening the PDF file

to view my return I am using Acrobat Reader70 and have shut off all my Norton security settings but this still did not workbull Information should be supplied about qualifying for Ready Returns vis-agrave-vis taxable interest incomebull Thanks for this program It is very quick and accurate I double-checked the numbers--they matchedbull This was awesome Everything was already pre-filled out for me All I had to do was review it add direct deposit for my refund and sign

submitit I wish there was a similar pilot program for filing my Federal taxes as well I am definitely satisfied and look forward to participating in this pilot program again next year

bull I would like to file my federal return also using this methodbull Thank you for making filing my taxes so easy -one less stress on my mindbull It was fast easy and cheap I will do it again if I canbull Missed step13 nice to have a reminder of that option Would have used the direct depositbull This ready return worked well but I do prefer tele-file It took me less timebull This e-file system should have a checklist of what needs to be done after I e-file my taxes It did not tell me where I need to mail my

check who to make it payable to what needed to be on the check and if anything needed to accompany the check I had to call for this information

bull This is great 15 min and I was done Like we say in the Marines OOOOOrrrraahhbull The Ready Return option is a wonderful idea and I personally hope to see it available for everyonebull The twenty minutes you allow isnt enough My server went down twice during my preparation Had to start over better if I didnrsquot have to

start over and just start from where I wasbull Fast easy wish it was like this all the timebull I THINK THIS IS GREAT FOR SINGLE PEOPLE WITH NO WRITE- OFFS AND NO OTHER EARNED INCOME IT CERTAINLY

SAVED ME TIME AND THE WORRY OF IT BE INCORRECT THANK YOUbull thank you very muchbull Very innovative and friendly service provided by the Franchise Tax Board Thanks for an appropriate use of taxpayers monies

Direct Quotes from the ReadyReturn Pilotbull I like this service I liked how it was pre-filled out free and that I can schedule my payment for a future date ie 415 There was one

error on the final page that told me to save my DCN on Form 8453 but I only printed Form 8455 Anyhow this is great Hope to see it again No w only if the Federal Govt would offer this too

bull Instructions were efficient and easy to understand I was confused for a few moments with the Pin number that I had to create to submit my return I tried to enter my access code Then I reread the instructions and figured it out Other than that all was simple Thanks

bull The pilot project looks goodbull please donrsquot get rid of theW-2 info once a year directly from the employerbull Website did not explain PIN for signature The website should have explained that the PIN was a number of your choosing just prior to

asking for this informationbull I liked the e-file offer including me in your Pilot program Thanksbull This was very neat I was a bit worried at first when I got his in the mail but when I realized that this letter to be involved in the Pilot

program was from the state I got excited I usually use [commercial software] to do my taxes but this was a lot easier All I had to do was double check the info and put in my account information for direct deposit I loved it Thanks for allowing me to participate in this program and I hope this continues for next years taxes

bull I would like to use it again next yearbull I wish Federal Taxes could have been prepared the same wayReadyReturn rocksbull THIS PROGRAM WAS VERY EASY AND STRAIGHT FORWARDbull This was fast easy and convenient I also like the idea of not wasting paper Great Jobbull The letter in spanish and in english is a good idea I do not need it in spanish but for those individuals out there I can see it to be

important and thoughtfulbull The tax return would NOT display correctly an error came up both with IE and Mozilla luckily I was mailed a printed version in the mail

numbers are over writing each other on the online form not clear at allbull This survey took longer for me to fill out than Ready Return took to let me file Great job especially for us poor single people Thanksbull Please include me on your mailing list next year How can I get Federal Invitation to-filerdquobull I liked this way of filing very much very convenient I would not have bought the state software if I had been aware of it before recieving

the letter I hope the same method is available next year I did have a problem viewing the pdf file containing my return It insisted on opening in Photoshop which did not understand it I would suggest checking that the content-type and content-disposition headers are set correctly

Direct Quotes from the ReadyReturn Pilotbull You mailed too many items regarding Efile You do not say that it is with no charge I hope this is free because I did not account for any

fee for using thisbull wow Great service This took me 30 minutes and I was done Thanks bull I was totally confused with those whole system and had a hard time figuring this system outHopefully I did this correctly Thanks bull This was a very easy way to file Thank you for the invitation I hope I can do the same next year These are the government services

that make my life easier - Thanks againbull pin number should state that you can use any 5 digit numberbull This was AWESOME And so easyhellip and it was FREE Thank you for inviting me to the pilot program Ill definitely look for this next yearbull My only concern at this moment is how good is the security onlinebull This was a delightful surprise to receive Thank you Anything to make life a wee-bit easierbull My browser would close the window whenever I would close the pdf of the return I had to log back in about 3 times Other than that this

was convenient and simplebull This is much better I hope you continue with this processbull KEEP GOING YOU ARE GETTING THEREJUST KEEP IT FREEbull It seems odd to not have to mail my W-2 but I like the convenience Thank you for the invitationbull I had difficulty getting to the website using the URL that was provided Also found the instructions abit aborious Instructions said to use

back or return button at bottom of page After reviewing my return in PDF format there should have been instructions to close tha window Need clear instructions on selecting the PIN without having to ask question

bull Grrreat Jobbull I wish I had received this in the mail earlier I did my return on paper in January I just hadnt filed itbull Great service and very use to use It would be good to have a save button when submitting direct deposit information the back button

makes you hesitate and wonder if the information was saved Until you print the return the einstructions are not clear as to the fact that this information will be added to the returnrdquo

bull The interface should be improved to allow saving your progress rather than requiring you to restart the process if you cant finish in one sitting Otherwise very useful and straight forwardrdquo

bull This was fairly simple I thought I was going to use an interactive tax form Since I already prepared my taxes I could have adjusted the numbers directly to the 540 form Mine was a simple return I might be alittle apprehensive using this system if my return was more complex unless I was adjusting the numbers directly on the form

Direct Quotes from the ReadyReturn Pilotbull Love this service - too bad I moved out of state before it took off and became a regular thing I loved Tele File toobull I had a very positive experience with Ready Return I hope this eventually becomes a government service Its fast convenient and takes

a lot of anxiety away that is associated with taxbull The original wage amount was incorrect Had to change onlinebull This process couldnrsquot be easier except clarify the PIN signature I spent a minute looking for the PIN on my invite I had to click on the

help icon to learn that I make up my own PIN It should be stated right on the pagebull When I went in to review my tax form and there was nothing at the bottom that tells you what to do next I was nt real sure if I should just

close out or not When I did I saw that it then said to continue etc but for a moment I was not really surebull ReadyReturn was great I hope you do it again next year It was hassel free I loved it Thank you for including me in your pilot runbull Is there any way for 1099-INT information to automatically be sent and be included like the w-2 information was It would make this type

of filing even easier but this may not be feasable Thank you for the opportunity to file my State tax form via this methodbull My fiancee was upset that she couldnrsquot file using this method please expand the programbull I was in such a hurry to complete ithellip I didnrsquot supply the direct deposit infohellip I guess a check will be in the mailhellip it was so nice to have it

all filled out in advancehellip look forward to e-file again next yearbull Thank you for the opportunitybull THANK YOUbull The program was very easy to use and extremely convenient although my preference is to use an independent software program

outside the government or file via mail I think the reason I feel this way is mainly due t o the fact that this is a new program However it is a great option for filing very simple and I would use it again

bull When the it came time to e-file and the program asked me for my access code it did not take it because it asked for a five digit code and my access code is four--so I added a zero in front of it

bull This is a great service Would suggest to BOLD that signature should be a NUMBER pin I was trying to use charactershellip maybe others caught it but that took me a little bit to figure out Thank you

bull I was a participant and the taxes were already prepared for me Because of the fact that all I had was an address change it took quite along time to do this and e-file because I had to re-do my taxes all over again The software should automatically let you just change your address and re-print and filerdquo

bull I would have liked to receive my invitation letter soonerbull GREAT idea this was super easy and fast now push the federal guys to let you file like this as well

Direct Quotes from the ReadyReturn Pilotbull Make e-file permanent Tax solution Wish the Federal Government does the samehellipbull I really enjoyed filing by Telefile and miss that option Using ReadyReturn means you must have a computer and not everyone does I

also have not been receiving my Tax Record and Instructions booklet for the past 3 years I miss getting that also You get updated information that you wouldnt get elsewhere

bull the directions were easy but I did have alittle trouble on some of it I printed it once and thought that would take care of it but you have to print it twice so you can see your routing number included Directions should say print twice

bull I do not use a bank Your instructions do not tell me how and when I will receive my refund in that casebull The site did not tell where my signature pin was or how to get it Other then that the site was over all a great way to filebull Bravo this was simple and quick Better then any indepent tax preparation site Ive used in the pastbull Great experiece It was easier and faster than telefilebull Thank you for inviting me to participate in your pilot program I hope that it is a success so that I can use it again next yearbull Great Easy fast way to file income Plus its freebull This was excellent as long as hackers can not get on to the website Since I do not itemize this was the easiest way for me to submit my

tax formbull Now that tele file is no longer available I prefer filing on-line Thanks for the opportunitybull Nice to receive access code through mail Nice to have option to receive access online Was not aware of program until receiving

ReadyReturn in the mail ReadyReturn is a good option for filing tax Thanksbull It was very easy to file my return I wish I could do the same thing for next yearbull Printing out there turn was problematic and caused me to be timed out For easier printing keep the form black and whitebull Awesome I loved the Taxes already been made for me You should keep the pilot program alive Sooooooo easy quick efficient and the

best part is that its FREE It took me less then 2 minutes to just log into the website sign my return and e-file Nice job the Feds should do the same

bull Question 10 did not have enough optionsbull The numbers were on top of each other on my return in the computer I do have Adobe 70 so believe that there is a bug somewhere in

your systembull Please make sure that people realize they need to update the information on their return if they want to have their refund directly

deposited to their account Making sure they viewed their return does not really point that out I was double checking the amounts on my return form I forgot to revise that I wanted my refund directly deposited to my account Now I have to wait for my check in the mail But still thank you for this opportunity

Direct Quotes from the ReadyReturn Pilotbull rdquoThis was allot easier than tele-file I love the fact that all my info is filled out for me on the return and all I have to do is accept it and I am

done Good job Thank youbull thank you for the opportunitybull thank youbull This was the easiest time I have ever had filing a return Thank youbull Thanks for inviting me to use the new system--should be well accepted by all who participatesbull Im glad I was a part of this- it made things so easybull ReadyReturn is the best thing to happen to state taxes since deductions - Filing this year was beyond easy and fast Thank you for

such a great program and I hope it will be available again next year Thanks bull thank you thank you sobsob thank youbull Great Servicebull PIN number was confusing It was not clear that the number was something for the user to make up rather than a specific number the

user was already supposed to knowbull My printer printed out the return but not the inserted figure fields on the return such as AGI amount amount I owe etcso I used the

return you sent as my record along with the DCN numberbull thank you this even easier than TeleFilebull Entering the 5 digit pin at the end was a little confusing It should state to come up with your own 5 digit pin that way others wont

scramble to locate it somewhere in the paperwork Thats what I did and just came to the conclusion that I had to make one up That was fine but it should state to make up your own 5 digit pin and remember it somewhere

bull The some of the print on my return was overlapping Im hopeful this will not affect my returnbull coolbull My browser didnt have the exact wording listed in the instructions so I had to choose to believe that I have sufficient security for this

system in order to use it Hope I didnt make a big mistake Im not computer savvybull Thanks for making it really easy and painless this yearbull more of the data should already be populated ie ssnemployers id ect It would save more time and make it more pleasurablebull This is a wonderful program that should be made available always The only confusing point was the 5-digit PIN to sign the return It

should be made more clear that the PIN is just a random number and not a number that was sent to us Also the paper that was mailed to us with our access code should have spaces marked for writing down our DCN and PIN as a reminder to keep the information

Direct Quotes from the ReadyReturn Pilotbull rdquoSince I already had a copy mailed to me with the invitation I didnt print a copy but was directed back to print a copy before I could

continuebull Great jobbull This is a fabulous servicebull this system is the best thing to come alone since sliced bread i lover itbull It is not clear how to come about finding your PIN Do you make up one or is it somewhere on the form and you just cant find itbull Was a little hard to find where I needed to go at first but once I did it was easyThanks bull This is a great program please continue itbull Ok - FIRST This 500-character limited space should be acknowledged Now I have to rewrite this all It was unclear to me what the PIN

was I had to go back to the FAQs page then look it up Info NEXT to the red asterisks would have been helpful - or a What is this underlined next to important entries to take us immediately to another window with that particular info ReadyReturn is a 540 formI use 540 EZ - I was going to change the entries - luckliy I saw the difference

bull it is about time we eliminate paper and streamline the government Next lets fix workmans compensationbull To have the form already prepared by you was a big help Thank youbull awsomebull It was a nice surprise to receive the invitation Id definitely use that again Thank youbull If you are receiving a refund button for electronic transfer into your bank account should be before electronic signaturebull Choosing a 5 digit pin seemed pointless and confusing since there was little explanation about how it would be used laterbull It will be nice to also receive an invitation to do my federal taxesbull ReadyReturn was GREAT It was incredibly convenient and was faster than [other programs] Thank you for including me in your pilot

programbull pin number was a little confusingbull I would like to do this again for the future tax returnsbull Thank you This was greatbull Thanksbull I like having calculations done for mebull Great idea Thank youbull You scored a homerun with this latest upgrade in e-filing It saved me a lot of time and headache thank you

Direct Quotes from the ReadyReturn Pilotbull The question mark symbols linked to page not found messages that should be fixed Also it was really hard to tell if my browser was

secure enough More detailed information there is definitely needed more browsers should be included and the links to download super secure software should lead to the actual product not to the general website of the browser I had no idea where to go from where you guys sent me These two issues were a big problem but otherwise the system worked really well and I appreciated being able to file this way

bull this was great thanks for selecting mebull I had the preprinted form so no need to print even though asked to do so and it was confusing to figure out how to close the page to get

back to Sign and Submit please add a Close or Back button hitting the X at upper right is scary E-file is fine now that telefile is not available

bull Please continue with this pilot program Its very helpful in saving me time and energyboth are valuable to mebull Excellent idea Solid-looking implementation Im glad to see compatibility with non-internet explorer web browsersbull Great idea big time saver Takes the guess work out I would be concerned that people would miss out on deductions using this method

without exploring other optionsbull Thank you letting me fill on e-mail i will love to do this way every year it was helpful and less stresssfulbull Great Systembull Thank you for this easy to use method of preparing and filing my State tax returnbull THE INFO BUTTONS DID NOT WORK TRIED TO FIND OUT WHAT A PIN WAS WHERE DO YOU GET IT DO YOU JUST MAKE

ONE UP NO EXPLANATIONbull The only thing remotely confusing was the PIN number but when I clicked on the help question mark button I got the info I needed to

submit the formbull Why was telefile discardedbull This was really great When I received the notice of the pilot in the mail I was excited becuase I was dreading filing my State taxes since I

had not received a notice to file them by Telefile This was painless and would love for this process to continuebull Contrary to your mailing about a month ago I still needed to call in for CSNs for my wife and I Also it would help if you gave examples

concerning creating the PINs for the electronic signatures Also the request for explanation boxes did NOT work This is not good Otherwise the experience was a good one without major problems Thank you

bull I think that this is a wonderful service The only thing that would make it better is if people are able to make changes to their tax return and be able to submit them online without sending it through the mail It would be good for people who have other incomes Thank you CA

Direct Quotes from the ReadyReturn Pilotbull Thanks for the invitation This method of e-filing was absolutely painless and so fast It took me less than ten minutes - but I put 10

minutes in the response box because I was interrupted by a phone call Thanks and tell my dear Governator thanks toobull It would be nice to feed Federal Return data [from commercial software] into the California softwarebull what was my PIN at the end it wanted my PIN a 5 digit number I only have a 4 digit access code so I made up a number and it acepted

it Is this what you are suposed to do Do I need to remember my PINbull I LIKED THE PROCESS ONLY CONFUSING PART WAS DID I PRINT WHILE STILL IN THE ADOBE WINDOW GREAT JOBbull Good job Thanks for your effortsbull I LIKED THE PROCESS ONLY CONFUSING PART WAS DID I PRINT WHILE STILL IN THE ADOBE WINDOW GREAT JOBbull This was so easy I wish the federal returns were this simplebull Provide easy access to online information regarding tax benefits credits incentives and other money-saving options when using

ReadyReturn to file taxesbull I wish I could of had the invention for the pilot sooner than spending money on an outside sourcebull I would love to use this service again now that telefile is gonebull Now you dont have to sweat in out over your paperwork Thanks tonsbull I had a change to make and wouldve preferred entering the change in the pre-prepared form and theh have it compute the rest or prompt

for extra into pertaining to that one change Instead I had to wade through all the pages for the whole returnbull This is the greatest ever in my experienceThe federal filing should be done the same wayThank you Best Regardsbull ReadyReturn was fast and easy--thanksbull help button didnt work on direct deposit so I had not forgo that option wasnt sure what my routing number was otherwise very

convienent thanksbull The enter pin number and submit button were problems I had to keep entering the number and had viewed the form 3-4 times before I

was able to complete the submit portionbull When it came to the PIN instructions it was not clear that I was to make up my own number I tried the help icon and it wasnt workingbull While this was a fairly handy function I believe it would be even easier if the person needing changes could work with a directly

interactive tax form For example All I needed to do was add interest that I received for the year For me it would have been much simpler to type in the interest on the PDF review form and have it automatically recalculate than it was to go through the 20 question scenario Hopefully you can make this improvement in the future

bull Wonderful program It made doing taxes actually enjoyable Thanks

Direct Quotes from the ReadyReturn Pilotbull The five-digit pin was confusing Logged out because I thought I hadnt registered or properly received the pinbull This was Awesomebull LINKS TO THE HELP OR THE QUESTION MARK WAS UNAVAILABLE SO I WASNT SURE ON SOME INTEREST EARNED SO I

INCLUDED TO BE ON THE SAFE SIDEbull I had to call the 1 800 number for a little help in making a change but the service rep was very good at addressing my needsbull Ive e-filed my last return and that was easy since I didnt make that much but this return I was considering not filing because it was even

less than before but since I received the invitation to the pilot program I decided to just do it that way Much more convienient and I figured might as well so I dont in trouble I was very happy with just e-filing but ReadyReturn is much faster and better Thanks

bull I like this new program I hope its around next year and I can use it Thanks

Compliance and Other Costs Borne by Average Taxpayers

bull Tax system imposes large compliance costs on businesses and high-income individuals

bull Tax system also imposes compliance costs on taxpayers with ldquosimplerdquo returnsndash Whatrsquos a W-2 1099 Should I hire a preparer

Which preparer File myself Which return Have I saved all the records Understood the form Copied numbers correctly Done the math right

ndash Economists measure costs as function of time and money but canrsquot measure anxiety frustration and anger
























yearrdquo


Minor Criticisms






Bi-Partisan Support














































phone so easy














































































































































































































yearrdquo


Minor Criticisms






Bi-Partisan Support














































phone so easy








































































































































































































yearrdquo


Minor Criticisms






Bi-Partisan Support














































phone so easy



































































































































































































yearrdquo


Minor Criticisms






Bi-Partisan Support














































phone so easy































































































































































































yearrdquo


Minor Criticisms






Bi-Partisan Support














































phone so easy


























































































































































































yearrdquo


Minor Criticisms






Bi-Partisan Support














































phone so easy























































































































































































Minor Criticisms






Bi-Partisan Support














































phone so easy























































































































































































Bi-Partisan Support














































phone so easy


































































































































































































































phone so easy




























































































































































































































phone so easy






















































































































































































































phone so easy


















































































































































































































phone so easy














































































































































































































phone so easy











































































































































































































phone so easy





































































































































































































phone so easy

































































































































































































phone so easy





















































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































Documents

Simplifying Tax for the Average Citizen Joseph Bankman Ralph M. Parsons Professor of Law and Business, Stanford Law School [email protected]