The deadline for filing taxes is April 17 and so I mailed in my tax returns over the weekend. Yes, I still send in paper returns via snail mail. It is not that I am a Luddite, not entirely anyway. In fact, I wrote my own spreadsheet for taxes many years ago that I update each year to accommodate any changes. All I have to do is input the data and it calculates my federal, state, and local taxes in exactly the same format as the tax forms. I then download the fillable pdf forms from the various government websites and copy the figures from my spreadsheet onto the forms.
So why be a semi-Luddite? Why not go full electronic? It is because I am annoyed that the government gave private companies the right to charge most people to file electronically rather than provide free software. The government saves money by having people file electronically. They could have easily created a system where people could file directly with the government. Instead, they deliberately chose to not do so and created an unnecessarily layer of bureaucracy by artificially providing a role for for-profit private companies, analogous to the way that for-profit private health insurance companies were inserted into the health system where they play no beneficial role
but are merely parasites. I did not see why I should be forced to give money to a private company in order to transact business with the government.
I also did not like the idea of giving my personal information to a private company and in this respect, a news report in the Plain Dealer yesterday suggests that my concerns are justified.
If you’re filing your income tax electronically this year, don’t be surprised if someone solicits you for a high-interest personal loan.
Or offers to refinance your mortgage. Or calls about some hot new investment.
It’s because you don’t make much money, you deducted mortgage interest or you had a boatload of income from capital gains.
How did they know?
Your tax preparation program gave you away. Many software companies share your data with affiliates or marketing partners — your name, address, email address, phone number, income, dependents, charitable contributions and deductions for college tuition, business losses or whatever.
The article says that the privacy clauses in many of these sites are long or hidden away or obscure and so people are unwittingly sharing their information. So people who use tax filing software may be actually paying for the ‘privilege’ of having their confidential information sold to other companies.