Providing a free, digital service to collect taxes would then be considered a real threat.
I hear outright wrong arguments for why the USA has not moved to a modern filing system. The US tax system is NOT more complex than other countries. It's pretty middle of the road in complexity. Yes other countries are made up of states too. Yes there's a ton of exemptions in other countries.
It's yet another example of people taking an absurd "government is always less efficient than private" viewpoint that isn't even founded in any academic sense. It's a line broadcast by very rich people that want to siphon off profit and it's hard to do that when it's tax payer funded.
The argument I always hear from the right about this is that they worry that making taxes more efficient will allow them (and government action in general) to increase. The right is explicitly committed to reducing that, so it's not in their interest.
Same reason I've heard from people on the right about ending withholding. They think that if people had to cut an actual check to the government every year (or quarter) that people would realize how much it's costing them and be more amenable to reducing it.
Tax preparation is a huge industry in the US, they're going to fight tooth and nail to make sure the government doesn't cut into their business.