> Unless you physically hand your taxes in, isn't any solution technically vulnerable to being compromised?

If that's all there is to it, then why do people use other solutions?

> Also, wouldn't encryption fix this problem?

Kind of. The problem is the protocol and lack of consensus prevents this from being feasibly implemented. Personally, I think encryption in transit is a low probability threat for me. I would also like certain data to "expire" or go into "cold storage" after a period of time. Sending it in a side-channel, like Dropbox or Google Drive means I can delete it or revoke access after a period of time but this breaks email.