No easy answers
The Internal Revenue Service's capitulation late last month to not offer online tax preparation services was a big win for the companies that prepare taxes for millions of Americans. On the face of it, the agreement makes common sense, but the issue of what is inherently governmental work and what should be left to the private sector is still unclear.
According to the agreement, the IRS will not provide free online tax preparation advice and, in return, tax preparation companies such as H&R Block will give 60 percent of all taxpayers — as many as 78 million Americans — free tax preparation and filing services.
The agreement seems like a good idea. After all, asking the IRS for advice on preparing your taxes is much like asking your barber if you need a haircut — the chances of the agency telling you to pay less tax are slim.
The agreement could energize what has been an inexorable movement toward sending more and more information technology work out of the federal government and into the private sector. The Computer and Communications Industry Association, which led the charge to stop many federal agencies from providing e-commerce initiatives, called the IRS agreement "a huge victory."
A mad rush to move online IT functions out of the federal government and into the private sector brings its own risks and is more complex than merely saying, "It's just common sense."
The question is whether an agency should offer a specific online service or whether such services should be reviewed on a case-by-case basis, unclouded by the argument that the private sector can always do better. Americans may trust the government more to offer an online service because it is not motivated by profit — not such an unreasonable attitude given the recent events involving corporate mismanagement and alleged criminal intent.
Outsourcing government services is a complicated question that deserves a deliberate and — at times — complicated answer.