Why are you required to file your taxes if you employer deducts them for you?
When you work for someone they automatically deduct tax from your pay and give it to the government. Filing your tax returns allows you to get money back if they taxed you too much. So why is not filing your taxes a crime even if you don't make any money from someone other than your employer? If you don't file your taxes the only thing that could happen is the government gets more money than they should, so it doesn't seem reasonable that not taking your money back from the government and letting them keep the extra money is a crime.
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Why are you required to file your taxes if you employer deducts them for you?
Your employer doesn't know your full tax situation. Your employer knows it paid you $X. Your employer knows you handed in a W4 indicating you expect to claim Y exemptions but it doesn't know if you're actually legally allowed to claim Y exemptions. Based on your projected income considering what it knows about the tax laws for the year and the expectation that you'll likely claim Y exemptions, it withholds $Z, which might be more or less than you ultimately owe.
Your employer doesn't know if you have investments, or a trust fund, or another employer, or receive income from some state welfare program, or have a savings account, or had a kid, or got married or bought a house, or won a bunch of money on your vacation in vegas, or settled a debt causing taxable event.
All of the rules surrounding when you owe a tax return are essentially whatever congress and the IRS thought would be the best way to keep everyone honest at the time the rules came to exist. Could things be simplified from their existing state, probably. But, right now you owe a federal return if you receive income in excess of the standard deduction plus whatever exemptions you are allowed to take (because that's the level of income that would trigger a taxable income). WHY is that the rule? Because that's what congress (or the IRS if the IRS was given the authority to decide this rule) decided the minimum filing threshold should be when whatever bill this rule appeared in was passed.
Why? Because million per year in lobbying by the tax preparation industry.
It's one of those situation where you assume what you live with is normal, whereas the United States is not at all normal in how the government resists making tax filing easy.
If you don't file your taxes the only thing that could happen is the government gets more money than they should
Not true - you could have declared more exemptions on your W-4 than you should have, get less withholdings from your paycheck, and at the end of the year YOU owe additional tax.
If it were legal not to file a tax return, then people would only file when they were owed a tax refund, and would not file if they owed taxes, resulting in a net loss for the government.
There is no penalty for non-filing if no tax is owed. So in your example situation, while the IRS dictates that they are obligated to file (assuming their income exceeds the minimum threshold) and their withholding was sufficient, there is no penalty for failing to do so, the IRS is happy to keep unclaimed refunds.
Unless you go through the return, you cannot be 100% certain that you will not owe, employers mess up withholding, employees put an incorrect number of allowances on their W-4, people have other income, etc. I'd argue that requiring a return gives them a more defensible position when coming after someone for non-payment, and discourages people from taking the risk of not-filing.
I'd imagine filing in most years and skipping some makes you a prime target for audit, but as I said, they're happy to keep unclaimed refund money.
Edit - Clarification and some sources:
The failure to file penalty is the lesser of 100% of tax owed and 5, so if your withholding was sufficient (no tax owed) then there'd be no penalty.
When you fail to file a return and should have, the IRS, in essence, does it for you using an SFR (Substitute for Return). This basically assumes the worst based on evidence they have, i.e. you sold stock, they assume [CO] basis since they lack any other information, you had 1099 income, they assume no expenses offsetting it, etc. For most simple returns the SFR is identical to the return that would have been filed, so this triggers no adverse action since they will discover no additional tax owed.
This is at the IRS level, and for personal tax returns, partnerships/S-Corps, etc face different rules. State laws may vary.
But unless you file a tax return, the government doesn't know that you didn't have outside income, that you didn't claim too many exemptions on your W-4, etc. It's like asking, "Why does a teacher collect and grade student's tests instead of just assuming that all the students knew all the right answers?"
The probability that the amount withheld from your paychecks will exactly match your tax liability is pretty small. I suppose that if your taxes are complex and take you many hours to complete, and in the end that results in you getting a refund, you could say, "A lot of trouble for so little money." But you don't know it's only until you do all the work.
Addendum
Just this year, literally the day after I filed my taxes, I got a "corrected" 1099 from my bank saying that my investment income was a little higher than they had shown on the original form. So I had to file an amended return. The end result was that I owed the government . It was a bunch of paperwork for , and I'm sure the government spent more than doing the paperwork on their side. But what's the alternative? I made a mistake on my taxes once and the government came back years later and said that I owed an additional in taxes ... plus 0 in interest and penalties. I figured, better to do the paperwork and pay the than risk some huge penalty later.
The amount of money the government gets is based on your withholding. Depending on how it is set up you may pay too much or too little (usually a little too much so you get a refund).
You need to tell the government that you have not received income from other sources that they might not know about. That is done when you file your tax return.
In situations where your tax situation is straightforward they have tried to make it easier (such as by using form 1040-EZ instead of the regular form 1040)
However it is quite easy to end up in a situation where your tax situation becomes more complicated (e.g. you buy a home and want to deduct real estate taxes and mortgage interest from your income tax liability).
If you are not happy with the law you can contact your congressman or senator.
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