13 Hours and $240 Later
Did you file your tax return? Are you getting a refund or do you owe money? Did you fill out the form yourself? Did you use tax software? Did you hire an accountant?
Each year we spend an average of $240 to prepare and file our annual tax returns, according to the IRS Taxpayer Advocate Service. We spend on average thirteen hours filling out the forms. People in other countries think we’re nuts.
While the U.S. requires taxpayers calculate their own liability, in approximately 36 countries the government provides a pre-filled statement of income and tax due based on third-party data.
How do other countries do it?
Denmark, Norway, and Sweden use Tax Agency Reconciliation: In this system, the tax authority generates a fully completed return. Citizens simply review it online and click “confirm” if they agree or submit amendments if they have additional deductions or income. The process can take as little as fifteen minutes and cost taxpayers nothing.
The United Kingdom and Japan use Exact Withholding: The system aims to withhold the exact amount of tax from paychecks throughout the year. For many salaried workers, this eliminates the need to file a year-end return entirely.
In Australia and France, the process is called Partial Pre-filling: The government fills in common data like salary and bank interest, but the taxpayer must still add more complex information manually.
Why doesn’t the United States use one of these methods?
Tax Code Complexity: The U.S. tax code is heavily reliant on individual-specific deductions and credits (like dependents or business expenses) that the IRS cannot easily predict without taxpayer input.
Reporting Lag: The IRS often doesn’t receive third-party W-2 and 1099 data until mid-year, long after the April filing deadline has passed.
Industry Lobbying: The multi-billion-dollar tax prep industry has historically lobbied against government-run filing tools to protect their market share.
The first item can be solved with a simplification of the U.S. Tax Code, which runs a whopping 6,871 pages (more than 75,000 if you add the IRS regulations, a 14-week reading assignment). The complexity of the code reeks of special provisions designed to serve special interests. It is why the average taxpayer believes, with justification, that the tax code is rigged against them and in favor of the rich and powerful individuals and corporations. See Senator Bernie Sanders’ (I-Vt) Corporate Tax Dodging Prevention Act.
The second item can also be handled with changes to IRS procedures. Already, third-party data must be filed with the IRS before the tax filing deadline. There are penalties if they are not. These penalties, which are money fines, can be raised and enforcement diligently applied. The late filings will undoubtedly be greatly reduced.
And then we come to the third item on my list. Like everything else in the good old U S of A, industry lobbying is the juggernaut elected officials at all levels of government, in desperate need of money to finance their elections, cannot resist.
For the 2026 tax filing season, the IRS expects to receive approximately 164 million individual income tax returns. Filing trends show a nearly even split between those who self-prepare using digital tools and those who hire professional assistance.
As of March 27, 2026, filing broke down like this:
| 2026 Count | % Change from 2025 | |
|---|---|---|
| Total Returns Received | 88,424,000 | -1.3% |
| Returns from Tax Pros | 45,854,000 | -1.1% |
| Self-Prepared Returns | 41,017,000 | +1.4% |
| Average Refund Amount | $3,521 | +11.1% |
The DYI Market
The do-it-yourself tax preparation landscape is primarily divided among a few major players:
- Intuit (TurboTax): Dominates with 60% of the market.
- While its overall unit count for lower-revenue filers declined by 2% in 2025, its total consumer revenue grew by 10% ($4.9 billion) as it successfully pivoted toward higher-income filers and more complex returns.
- H&R Block: Holds the second-largest position in the digital space.
- In the broader digital and accounting landscape, H&R Block often competes head-to-head for visibility, capturing a 35.8% click share in paid search (PPC) compared to TurboTax’s 32.17%.
- FreeTaxUSA: Emerged as a significant challenger for budget-conscious filers, capturing roughly 14.5% of recent search interest.
Lobbying Surge and Industry Influence
Now… look at the lobbying by tax providers:
- Record Spending: In 2025, Intuit (TurboTax) and H&R Block spent a combined $7.1 million on federal lobbying—the highest annual total on record for these two firms.
- Long-term Investment: Since 2003, these companies have invested more than $103 million in federal lobbying, frequently targeting efforts to prevent the IRS from developing its own tax preparation software.
- Political Contributions: Intuit alone contributed $1 million to President Trump’s inaugural committee and distributed approximately $1.8 million to Republican members of Congress in 2024 to solidify opposition to free government filing.
- Revolving Door Strategy: Nearly 70% of Intuit’s 84 lobbyists in 2025 were former government employees, many of whom previously served on key tax-writing committees in Congress.
The Death of Direct File
The IRS did have a pilot program to allow taxpayers to file returns directly with an online site. It was called Direct File. The Biden administration pushed for it, fighting against industry lobbying. It served 141,000 taxpayers with virtually no promotion in 2024. The Trump administration killed it.
The U.S. Department of the Treasury cited high operational costs ($138 per return in the pilot year) and limited participation as the primary reasons for shuttering the program. Despite the “limited use” claim, participation actually doubled from approximately 141,000 users in 2024 to nearly 300,000 users in 2025 before the program was cut. The Trump administration’s explanation was like any of the other lies to come out of this pay-as-you-go administration.
Intuit and H&R Block stocks soared on the news.
Think about the cost in time and money the next time you vote.
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