We Can Cost the Government Money by Filing Paper Tax Returns

A new report from the U.S. Government Accountability Office contains a few tidbits that suggest another technique for tax resisters who file returns:

IRS estimates that a paper return costs $2.36 more to process than an electronically filed return.


Paper returns also limit the effectiveness of IRS’s enforcement programs. To control costs, IRS does not transcribe all the lines on paper tax returns into its computer databases, such as taxpayers’ telephone numbers, limiting the amount of information available electronically for enforcement purposes. As we previously reported, even small changes in the amount of information IRS transcribes can consume substantial resources that might offset some potential savings from electronic filing. Further, to avoid disadvantaging taxpayers who file electronically, IRS has a policy of posting the same information from electronic and paper returns to its databases. Consequently, if a line is not transcribed from paper returns, it is not posted from electronic returns either. Only information posted to computer databases is readily available for use in IRS’s automated compliance checking programs. These programs include matching tax return entries with information returns from third parties, such as Form W-2s from employers or Form 1099s from financial institutions, and selecting suspicious returns for audit.

According to IRS officials, transcribing and posting more comprehensive information from individual income tax returns could facilitate the audit process, expedite contacts for faster resolution, reduce handling costs, allow for improved case selection, and potentially better define specific tax gap issues. Although we have not independently verified IRS’s methodology, for one of its main enforcement programs — the Automated Underreporter Program — IRS officials estimate that having all tax return information available electronically would result in a $175 million increase in tax revenue annually, while at the same time, reduce its “no-change” rate, making it less likely that IRS would select taxpayers for further contact where no additional tax was assessed, thus lowering taxpayer burden.

So if you want to cause a little more expense and trouble for the IRS and you want to help make their tax enforcement less efficient, file paper tax returns rather than filing electronically. This doesn’t mean you can’t do your tax return on a computer or with the help of a tax professional, but when you get to the end of that process and you’re ready to file, instead of “e-filing” ask for a printout and mail the printout in instead.

If you have your taxes done by a tax professional or at a volunteer tax assistance site, you might need to say explicitly that you want to file a paper return yourself rather than “e-filing” or the person helping you with your return may assume otherwise.

The House of Representatives recently passed a bill that would (among other things) increase the minimum failure-to-file penalty from $100 to $225.

More from the signers of the “No War With My Money!” pledge at Don’t Buy Bush’s War:

It is we who fund this war. It is we who must stop it.
Mark Landau, Santa Fe, New Mexico
Code Pink Tennessee along with PeaceRoots Alliance and the Peace Coalition and other peaceful people will join in tax protests in Middle Tennessee to stop funding the imperialistic adventures of the Bush administration.
Elizabeth Barger, Summertown, Tennessee
This is such a great idea.
Nathan Hartle, Lincoln, Nebraska
I will not allow money earned by my own labor to be used to purchase bullets and bombs. I will not contribute to squandering the lives of our troops or the atrocities done to the people of Iraq. I pledge to withhold the 7% of my taxes that is funneled into the war machine. I’m not buying Bush’s war! I’m not buying the lies, and I won’t buy the ammunition!
Jamie Romano, Tujunga, California
Have been resisting for years, through NWTRCC. Sure it’s scary, but it’s the best decision I’ve ever made.
Carol Wald, Brooklyn, New York
This is a brave step that we are all taking to put an end to war, which is a major threat to human evolution
Allen Thibault, Riverside, California
War is legalized murder for profit, by proxy. Reprehensible and pathetic. Protecting freedom is important, but killing for the purpose to supposedly protect while promulgating the illusion of danger and control by fear is the work of miscreants and criminals.
Chris Torri, Aliso Viejo, California
Thank you for being brave. I pray every day for strength to be the peace I want to see in the world as Gandhi wisely said.
Catalina, Whittier, California
Thanks for making it possible for millions of people to join in ending this and all wars by by simply refusing to pay for war.
Susan Nash, Idyllwild, California
I refuse to participate in funding a private army of war profiteers in an illegal, immoral, occupation of another country.
Michael DeBenedictis, Long Beach, California
I want to be like the ‘rich folks’ who aren’t expected to pay taxes to support this phony baloney war!
Gregg Noblett, Mechanicville, New York
Is it not time to evict fear from our minds and to no longer condone violence as a solution? If not now, with the pillaging of our rights and the spending of much of our tax dollars on presidential chess games, then when will we awake from this malaise?
Christopher Schaedler, Richland, Washington
Yes, no more taxes for war. But more than this — we must shift radically how we live on this our only Earth…
Alby Baker, Port Townsend, Washington
Jacques Seronde, Flagstaff, Arizona
I will not pay for war mongering any more.
Aileen Terra, Cleveland, Ohio
I’m joining the rich who don’t have to pay taxes to protest this war!
Greg Sullivan, San Diego, California