3. Privacy doesn't prevent one from storing any of that information, it just needs to be stored differently and processed client-side, which makes perfect sense for tax filing.
Yes, and the IRS does get that information now, whether you file on paper or e-file.
But to prefill tax forms or do people’s taxes automatically, they would have had to have already collected this information and not on the client side. Currently, the federal government does not collect this information and no means really exists to do so and keep it up to date. This is in contradistinction to other countries, where often the government has up to date information on things like where you live and who your kids are and who is eligible to claim them and how old they are. Of course those tax forms are comparatively easy to prefill.
If you just want free “client side” processing with e-filing, that already exists and is called Free Fillable Forms.
