Here's a fun example of why the government should maintain its own databases and use them to pre-fill your taxes.<p>This year, the state sent me a letter claiming I had paid zero taxes in 2010. They said I had to pay 100% of my tax liability right away or face liens, etc.. Of course, this was patently untrue--my employer had actually withheld more than my total tax liability for 2010. (I know this because I still have my 2010 W-2). So I was entitled to a refund for 2010, but the state was saying I owed them the full amount, plus penalties.<p>After contacting the state about this, they said the problem was that my W-2 form had likely become "detached" from my 2010 return.<p>So apparently, the state relies on a <i>paper copy of your W-2 attached to your return</i> to determine whether your employer has paid them the withheld taxes. If they can't find the W-2 you send them, they assume your employer didn't pay them anything on your behalf. Given that employers are already making electronic payments each quarter, why can't the government just derive its W-2 data from that? (I know, I know--they're probably not collecting that data right now. But the point is they could do it as part of the quarterly payment process.)<p>EDIT: Another funny bit to this story. I asked the state to confirm that my employer had indeed paid the amount reflected on my W-2. I figured that if the error was on my employer's end, I could take it up with them. But the state refused to say one way or another, citing confidentiality.