Earlier this month, Le Soleil carried a story about Revenue Quebec's plans to introduce tax preparation software starting in February 2003.
Quebec's tax collectors point to the benefits of efficiency, ease of access and the increasing use of on-line filing as justification for their entry into the market of tax preparation software.

In isolation, making it easier - as if paying taxes is a joyful activity - for citizens to file their taxes is a laudable objective. However, many other questions factor into this mix when government starts entering into the realm of the private sector.

Fundamental questions of taxpayer privacy are evident. If the government - whose aim it is to ensure that you pay your fair share to the maximum - develops tax filing software, what embedded parts of the code can the tax bureaucrats see

What if you model five or seven different income scenarios based on what you declare vis-à-vis expenses or other deductions: Will a hidden audit trail result and make one subject for increased audit scrutiny once the return is submitted

This yields another question concerning the range of the product. Off-the-shelf commercial tax software applications - whose aim it is to ensure that you pay your fair share at the minimum - allow for a range of modeling different tax scenarios with useful pop-up windows and tips to save taxes. Will the Quebec government software provide such options

Next up is the question of "the role of government." Is it really the Quebec government's job to compete against an already mature market of private sector participants Wouldn't the millions of taxpayer dollars being spent on this project be better put towards health care, public infrastructure or simply left in taxpayers' pockets to begin with

What about service Tax software companies provide customer service to deal with a range of problems including hardware/software conflicts, use of the product in different web browser environments, Mac vs. PC applications, etc. Does the Quebec government have this infrastructure in place It's highly unlikely.

What about audits and lawsuits If the government-produced software contains a bug or other glitch, will the taxman assume responsibility or will the taxpayer be left high and dry

In several interviews, Quebec officials have pointed to social equity and access considerations as justification for the government's entry into the tax software market. In the parlance of audits, these arguments simply don't add up.

To start, use of tax software requires a computer, pointing to the affluence of most tax filers that use tax preparation software. In addition, commercial tax preparation software already allows for multiple filings. And if access is such a concern, wouldn't it be better to work with private sector vendors to encourage them to distribute their tools to economically disadvantaged groups - if they don't already

It would seem to be in the private sector's own interest to expand their market share by getting more people (across all income groups) to use there products as tax filing and income/financial planning happens every year and people move in and out of different income groups over their lifetime.

This is a classical example of a government solution in search of a non-existent problem. Quebec should quit now, and other jurisdictions should take heed.