(Washington, D.C.) – Citizens Against Government Waste (CAGW) today released a report revealing that a proposal to construct an online tax preparation experiment in California could cost taxpayers as much as $350 million over the next decade.  The state-funded program would allow taxpayers who file online to prepare their tax returns on the state’s Franchise Tax Board (FTB) website instead of using commercially-available software. 

“The FTB seems determined to go forward with this plan even though tax preparation services are already widely available, at low cost or often at no cost, in the private sector,” CAGW Vice President Leslie Paige said. “Given the state’s abysmal financial status and it’s very spotty history of success in the area of information technology, this is not a project that should be undertaken.”

In 1997, after spending more than $111 million, California abandoned development of a system to establish a statewide automated network for tracking child support payments.  Other major information technology project failures, including those at the Department of Motor Vehicles and the Department of Corrections, have cost a total of $400 million, according to a State Auditor’s report.

In recent years, several states including New York, Massachusetts, Michigan, Mississippi, and Georgia, have opted to form public-private partnerships with tax preparation providers in order to promote e-filing, reduce waste, and reduce the drain on state budgets. 

“The California legislature should quickly reassert its authority and put a stop to this program before tens of millions are lost,” said Paige. “And taxpayers should demand to know why legislators would allow the FTB to engage in such an ill-advised and unnecessary program at a time when lawmakers are grappling with a $35 billion budget deficit.”

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.  For more information, please visit www.cagw.org.