I agree. The IRS definitely does not know how much I owe each year.
However, they do have an estimate and the vast majority of people would accept this estimate. So I think it's reasonable to suggest it ought to be provided.
I think the strongest counter-argument against this approach is in regards to bad actors and who discloses first. If you're thinking about hiding income and the first step is the government telling you what it thinks then you're very likely to continue to conceal and/or have a defense against a charge of concealment down the road ("I just used the IRS figures!")
It's a much more difficult situation for a bad actor if they have to disclose first without knowing for sure what the IRS knows.
"Estimate" implies someone is trying to... estimate something. The IRS has partial information. They don't have anything approaching something that anyone could reasonably call an estimate, and this isn't just an example of HN pedantry, it's an important distinction.
They know some of your income, but not all of it. Your 1099 income for the year is getting filed by your clients at the same time you're filing it, so all they know is what your AGI was last year. They know your expenses from last year in terms of the numbers, but they haven't been checked (last I saw, they were 3-5 years behind on cross-checking and validation depending on type of return). So they could plug the number in, sort of.
So they have your reported info from previous years, and a best guess at some of what this year's information might be.
So give me a partially filled out form with the information they do know then. Fill in the standard deduction, let me do the extra credit work for itemized deductions if I really want, eg I find taxes fun to do. (Some 90% of filers just go with the standard deductions.) Don't buy into Intuit's nonsense that the current system is good for anything other than their bottom line.
So the IRS calculates for each filing status, and you choose one. This would be a lot to ask years ago, but nowadays many citizen-facing government processes are web apps. Think TurboTax pre-filled with whatever has been reported.
A best effort calculation done with partial information is a type of estimate.
I agree, this won't work for a big class of people. It won't work for me. But it will work for the majority of tax filers who don't have a 1099 and who don't file a schedule A, B, C, D ...
My tax return last year was a half inch thick, printed out. I had to file on paper. I very much understand that this doesn't work for everyone. But it works for most people.
Where I'm living, the government does the taxes for you and then sends you a notice to check them.
That last bit? That's important - you get to check them. You can adjust if you should need to. Guess what most folks don't have to do? Check them. This works because most folks have simple returns. They work, might or might not own a house, might have a bank account, might have a retirement account - and that's about it. The government already has what it needs for most people. But you can check them and adjust if they are wrong. Of course, you can just not bother, too.
Is the system perfect? No, but it doesn't need to be. It merely needs to have better overall tax compliance than another system. When taxes are easy for the vast majority of your population, the governement has a better collection rate and can spend manpower auditing those that need audited (perhaps audit more complicated returns from the well-to-do instead of Ordinary Married Citizen that makes 50k jointly) and they can generally spend less money doing things like printing forms and manning question lines that don't give answers that constitute legal advice.
And seriously, in these systems, hiding income is still a crime. So those folks that just "used the IRS figures!" still have the chance of going to jail. Even if they never get caught, the automated system still wins because of the other benefits.
This would be true if it weren't for the standard deduction. Something like 90% of all filers opt for the standard deduction, obviating the need for itemized expenses.
Almost everyone would be best served by IRS calculated taxes. It's the wealthy and those with non-wage income who need the alphabet schedules.
However, they do have an estimate and the vast majority of people would accept this estimate. So I think it's reasonable to suggest it ought to be provided.
I think the strongest counter-argument against this approach is in regards to bad actors and who discloses first. If you're thinking about hiding income and the first step is the government telling you what it thinks then you're very likely to continue to conceal and/or have a defense against a charge of concealment down the road ("I just used the IRS figures!")
It's a much more difficult situation for a bad actor if they have to disclose first without knowing for sure what the IRS knows.