Companies DO submit your income to the IRS. However, citizens are required to separately submit their incomes on tax returns. Taxes on (nearly all) stock income is also reported to the IRS. The IRS cross-checks these values between the company-reported and the earner-reported submissions.
The argument is that if the system auto-filled tax returns, people wouldn't report income that the system hadn't auto-filled, so the government would lose money.
All federal electronic filing is done through private companies. Even the IRS's website for "free fillable forms" (which appears as if it were run by the IRS) is actually run by a private company. The only way to not submit taxes through a private company is to submit them on paper.
Companies DO submit your income to the IRS. However, citizens are required to separately submit their incomes on tax returns. Taxes on (nearly all) stock income is also reported to the IRS. The IRS cross-checks these values between the company-reported and the earner-reported submissions.
The argument is that if the system auto-filled tax returns, people wouldn't report income that the system hadn't auto-filled, so the government would lose money.
All federal electronic filing is done through private companies. Even the IRS's website for "free fillable forms" (which appears as if it were run by the IRS) is actually run by a private company. The only way to not submit taxes through a private company is to submit them on paper.