If you cross-match the individual data fields on a tax return to the databases available to tax authorities you will find there are still significant gaps including financial data held in other jurisdictions which may still be subject to tax in the taxpayer's home jurisdiction, taxpayer deductions and recent changes to taxpayer personal data such as home address, employer name and family details. But you are correct that tax authorities do indeed have a great deal more data about taxpayers than was the case one or two decades ago.

agree with u, tax authorities do indeed have a great deal more data about taxpayers than was the case one or two decades ago.

The information available in the financial reports are general (all size fits to all), which may not give details to the tax authority.

If the law requires taxpayers to file their tax returns without the intervention of the taw administration, then the law must be followed. The taxlaw must permit transactional level taxation before it is applied. In any case, we see, hybride situation wherein the system authomatically fill the returns but let the taxpayer to review and alter accordingly.

Hi Ca Dr Jaideep Rana this is really interesting. Largely, not all taxable income and information is available to the state authorities and they require individuals to make detailed submissions with evidence (and this can be reviewed if the authorities are not satisfied with the evidence presented).

Thanks for raising this issue and best wishes, James.

Tax return filing is a complex issue. Politicians created myriad of tax rules. I can tell that given the same data, two tax experts can not come with the same taxable income and tax due figures. This is to create business for tax CPAs. In fact it should be quite straightforward that a layman on the street can do it. Digitalization makes our lives easier but still they want us to prepare our own tax returns and CPAs to attest it. CPA approval is of course necessary but what I do not understand is why create so many exceptions and additions since nobody can follow them.

Some data are not available for tax authorities, due to many reasons (political issue, data confidential issues -financial institution etc).　In addition, there are many adjusments at the end of fiscal year, whether the adjusments benefit taxpayers (such as tax deduction), or increase tax due (double tax deduction etc).

Lobbyists. If I recall a speech from the then California state controller that I heard at a national conference, an auto file system was tried with California state income tax. Having the information that you noted, the state sent letters to individuals in a beta test that essentially automatically calculated the California state income tax due/refundable, asked the taxpayer to review, and if agreed sign and return. End of drama. If there were other items not on the return, the t/p maintained the right to file their own return. It worked wonderfully - except that software companies like H& R Block lost out on sales of their state income tax software. They went over CA admin's head to legislators who then forbade the system's final implementation.

See, e.g. newer LA Times article for more: https://www.latimes.com/politics/story/2021-10-21/california-tried-to-save-the-nation-from-the-misery-of-tax-filing-then-intuit-stepped-in