California Tests Pre-Filled Tax Return Program

LOS ANGELES, April 11, 2005 — -- The last-minute rush to file taxes has become a kind of American ritual. For most people, April 15 is a day to dread.

In California, however, the government is offering help.

The state is testing a pilot program called "ReadyReturn," which sends taxpayers their forms with all the personal details and return or payment amounts already completed.

"They don't even have to fill out their taxes," said California Controller Steve Westly. "It's done for them."

Mhyla Guillermo, 27, was one of the 50,000 Californians with the simplest tax forms chosen this year to receive the pre-filled tax returns.

"I work all day," said Guillermo. "I go to school on nights and weekends, and I don't get enough sleep. So if the government wants to do my taxes -- that's great."

It took about 10 minutes for Guillermo to complete the form online.

"I went online, put in my access code, sent it, printed it and I'm done," she said.

Participation, for now, is optional, but state tax officials have high hopes.

"I expect other states are likely to copy this," Westly said.

'On the Verge of Snooping'

The program has run into some serious opposition from national groups who consider it a chilling example of government going too far.

"We view this as an intrusion and a service that's on the verge of snooping," said Leslie Paige, vice president of the nonprofit group Citizens Against Government Waste. "And if I was a taxpayer and the state of California came knocking on my door saying, 'We're going to do you a favor,' I would say, 'No thanks.' "

Professional tax preparers worry the competition could cut into their business. They also take issue with the program's intent.

"It's not really about making taxes easier," said Brad Smith, senior vice president of Intuit Consumer Tax Group, which manufactures the Turbo Tax software. "It's about maximizing money for the state government."

The state concedes its tax rolls could benefit if ReadyReturns find their way to people who have not filed returns in the past and feel prompted to ante up.

"If we can bring some numbers of those people back into the tax system, that's a good thing for the state," Westly said.

It could certainly speed up the tax collection process. Other states and the Internal Revenue Service are watching to see how many of those getting the ReadyReturns feel comfortable sending them in.

ABC News' Erin Hayes filed this report for "World News Tonight."