The California Franchise Tax Board has voted unanimously to permanently offer a program allowing some low-income residents to file government-prepared tax returns, despite opposition from tax preparation software companies.
Earlier this year, legislation to make the ReadyReturn program permanent died in the Legislature and opponents of the program -- including hose who believe it is a conflict of interest for the state to prepare a return and collect money owed -- are questioning whether the board has the legal authority to move forward.
Incoming state controller John Chiang, whose campaign was closely watched by manufacturers of tax prep software, voted for returning the program from his current seat on the board, and said that the board can find the money to fund the program from its existing budget.
ReadyReturn is available to single taxpayers who only have one source of income, claim no dependents and take the standard deduction. About 50,000 taxpayers participated in the pilot program -- 11,000 last filing season -- and the tax board estimates 1 million people are eligible. The state mails taxpayers a completed return based on information from their W-2 form. If taxpayer agrees with the information on the return, they sign it and return it.
No ReadyReturn forms will be used in 2007, but would be available permanently starting in 2008, if the board action holds up.
