[HN Gopher] IRS moves forward with a new free-file tax return sy...
___________________________________________________________________
IRS moves forward with a new free-file tax return system
Author : DocFeind
Score : 326 points
Date : 2023-07-20 18:35 UTC (4 hours ago)
(HTM) web link (www.pbs.org)
(TXT) w3m dump (www.pbs.org)
| bigbillheck wrote:
| I've been using Free File Fillable Forms
| (https://www.freefilefillableforms.com) for several years now and
| look forward to whatever the IRS comes up with.
| owenmarshall wrote:
| Same here - if you like doing your taxes on paper, AND you post
| on this site, you'll love it & it'll save you some cash over
| Turbotax/friends.
|
| I will say it isn't the _most_ user friendly application, as
| evidenced by the error I received this year by email:
| Issue : Business Rule X0000-005 - The XML data has failed
| schema validation. cvc-complex-type.2.4.a. Invalid content was
| found starting with element `QualifiedCareExpensesPaidAmt`. One
| of `{"http://www.irs.gov/efile":IdentityProtectionPIN,
| "http://www.irs.gov/efile":QualifyingPersonSSN,
| "http://www.irs.gov/efile":DiedLiteralCd}` is expected.
| The following information may help you determine the form at
| issue: Field/Xpath: /efile:Return[1]/efile:ReturnData[1
| ]/efile:IRS2441[1]/efile:QualifyingPersonGrp[2]/efile:Qualified
| CareExpensesPaidAmt[1]
|
| It _did_ help me find the form & line at issue instantly, but
| I'm not sure a non-programmer would have as much luck.
| WaitWaitWha wrote:
| I have a solution that both sides will hate.
|
| Reduce the complexity and size of the tax code to the point where
| an average taxpayer can complete it.
| mdaniel wrote:
| I'll see your 'reduce complexity' and raise you "laws that
| compute things and have hyperlinks to other parts of the law
| should be written in a programming language" or even a con-lang
| designed for specificity. Hell, it's even called "the U.S.
| Code". I believe there's some precedent from the French but I
| believe it's a proof of concept:
| https://arxiv.org/pdf/2103.03198.pdf
| https://hn.algolia.com/?q=catala
|
| The asterisk to such a thing is that my understanding is that
| "ignorance of the law is no excuse" so changing from the
| official language of the country over to ... something else ...
| runs the risk of bringing back a "the clergy reads the laws and
| tells you what it says" style setup, but TBH even right now
| with the IRS tax code written in English I still cannot
| reasonably read it and conceptually author my own copy of Turbo
| Tax so I'll take my chances with the unintended consequences
| hazard
| mydriasis wrote:
| > Intuit spent at least $25.6 million since 2006 on lobbying, H&R
| Block about $9.6 million and the conservative Americans for Tax
| Reform roughly $3 million.
|
| > In contrast, the NAACP has spent $140,000 lobbying on "free-
| file" since 2006 and Public Citizen has spent $110,000 in the
| same time frame.
|
| With two orders of magnitude of lobbying dollars difference on
| either side, I'm surprised this is going anywhere.
|
| > "An IRS direct-to-e-file system is redundant and will not be
| free - not free to build, not free to operate, and not free for
| taxpayers," Plummer (a spokesman for Intuit) said, adding that it
| "will unnecessarily cost taxpayers billions of dollars."
|
| Oh, like the system your company built and lobbies for? How do
| you say stuff like this out loud without your pants bursting into
| flames on the spot?
| stonemetal12 wrote:
| If I were Intuit, I would be spending that on making sure the
| IRS selected us as the sole provider of their free tax
| software. Then make sure it's slightly more annoying than using
| TurboTax so I could get paid twice for the same job.
| LapsangGuzzler wrote:
| It would be an epic failure if the government issued a tax
| collection software contract out and didn't put in some sort
| of clause preventing intuit from providing a competing
| service. I have a hard time seeing them do something like
| that.
| NikolaNovak wrote:
| It's tricky.
|
| I can definitely foresee a future, based on governmental record
| in publicly-facing IT systems, where every single word of that
| statement is technically 100% true.
|
| First part is all but tautological - Of course it won't s not
| free to build or operate; and thus it wouldn't be "free for
| taxpayers" in the most technical sense (this doesn't mean it
| wouldn't be excellent value or save money overall or even cost
| more money but save it where it counts).
|
| It's the last sentence (unnecessarily cost taxpayers billions)
| that could go either way. This _could_ in principle end up an
| efficient and effective, easy to use and helpful well
| performing system that 's a brilliant investment of public
| money.
|
| I hate to say it though, but it's also extremely possible it
| would cost a lot of money with nobody using it because it
| sucks.
|
| Besides, it feels like in the USA, IT systems are only a part
| of issue with tax system. Actual tax code and submission
| options are the bigger part.
| candiddevmike wrote:
| What's going to happen is Intuit will end up building and
| running the service like Booz Allen did with recreation.gov
| and get to skim off the top.
| EatingWithForks wrote:
| > I hate to say it though, but it's also extremely possible
| it would cost a lot of money with nobody using it because it
| sucks.
|
| IMO The government should directly be hiring the best and the
| brightest with the pay to match. I would be more than happy
| to pay more taxes at my pay grade (or would support higher
| capital taxes) for free e-filing that's easy, fast, and
| multiplatform. However my taxes are raised would surely be
| cheaper than what I pay my accountant annually to file for
| me.
|
| It's ridiculous to me that government contracting is always
| expected to cheapen out for "efficiency". Governments should
| have excellent software and product minds on staff at all
| times to manage communication and data internally and
| externally, imo.
| twoodfin wrote:
| This is pretty simple to explain: Governments respond to a
| completely different incentive structure than private
| companies. It shouldn't be surprising that their outcomes
| differ, even (especially?) when the government spends more.
| thebradbain wrote:
| Yet most US constituents, of all parties and socioeconomic
| status, seethe at the thought of a government worker of any
| level making "too much" money.
|
| It doesn't matter that someone working for the government
| has the potential to have a much higher impact on a
| nationwide level than some rank and file worker who works
| at some blue chip auto insurance company, the moment
| increased pay for government workers is even brought up,
| that person imagines it as coming directly out of their
| paycheck.
|
| See teachers, urban planners, sanitary workers, NASA
| scientists, etc...
|
| It's a shame, because I have the unpopular opinion that
| _more_ government, filled with talented people who actually
| want to _fix_ the issues they're passionate about, is the
| answer to almost all of the USs domestic problems. Right
| now the highest paid government workers are those on the
| brink of retirement in administrative positions so far
| removed from any real work. A bureaucracy of gerontocracy,
| if you will. I really wish the government (not the
| political world, but the civil staff) was seen as as a
| place for passionate young people to aspire to, with the
| pay to match.
| theptip wrote:
| Classic political rhetoric. Who cares about "free"? I'm
| already paying for TurboTax. This only needs to be cheaper.
| [deleted]
| GabeIsko wrote:
| The government could always nationalize intuit.
| vinceguidry wrote:
| USGov hasn't nationalized a company like that since WW1
| when they seized Merck, and even then they just sold it
| back after the war. We'll nationalize utilities,
| transportation and transport-adjacent industries like
| airport security. Also finance companies will drift into
| and out of state control, as finance companies do.
|
| But USGov would far sooner regulate the tax prep industry
| more heavily than simply take it over. We ain't no China.
| bitxbitxbitcoin wrote:
| Nationalization without representation doesn't have quite
| the same ring to it.
| HDThoreaun wrote:
| Takings clause means the government would have to pay
| full market value which is currently 137 billion dollars.
| LanceH wrote:
| It could completely suck and still be incredibly useful if
| they would just tell me what 1099's (or other) they have on
| me. They're going to eventually if I don't file it
| appropriately.
|
| For instance, I just received some mail that I owe tax based
| on my Uber and Lyft earnings. One problem, I never worked for
| either. So now I'm expected a big slog through paperwork to
| remedy this problem that happened a couple years ago. Oh, and
| it may continue on to the next two years. I have no way of
| knowing what they think they know about me.
| Firmwarrior wrote:
| I thought you could get your tax transcripts from the IRS
| any time off the website, unless you make over a certain
| amount of money (to be fair, I think most HackerNews
| readers do exceed that limit..)
| LanceH wrote:
| That's really interesting. I've never been able to see
| anything like this on their site before.
|
| Also interesting is my account balance is currently $0,
| and I know that's not true even if they 100% believe the
| last mailing denying my 1099's from Uber and Doordash
| (not Lyft as I said above).
|
| Incidentally, Neither Uber, nor Lyft can help through
| customer service. I was thinking of taking them to small
| claims court since I'm not bound by any forced
| arbitration.
| AmericanChopper wrote:
| I'm immediately reminded of the healthcare.gov project,
| starting out with a budget of ~$90 million (which is already
| suspiciously high) and subsequently costing ~$2 billion,
| before launching with so many issues that it was initially
| unusable.
| tzs wrote:
| That was a much more technically difficult project than an
| IRS tax filing site will be.
|
| It involved systems from multiple agencies and
| jurisdictions that had been developed separately and not
| been designed to exchange data with systems outside their
| own agency.
|
| The IRS systems already talk to everything they need to
| talk to.
| stephenhuey wrote:
| Yes, and what came out of that? Some of the people who
| rescued that project with modern software development
| practices went on to found Nava, a public benefit
| corporation, to help the government do better work:
|
| https://www.navapbc.com
|
| I also have a friend who left Google to join numerous other
| high performers at 18F and know for a fact that they have
| done good work benefiting taxpayers:
|
| https://18f.gsa.gov
|
| I believe the U.S. Digital Service is better than it once
| was, and while it's not all rainbows and unicorns and super
| efficient everywhere (no doubt there are tons of huge
| problems with money being wasted), I do think there is
| improvement, and hopefully some people reading this will go
| help out.
|
| I'd much rather ATTEMPT to have an efficient free-file
| system than not try at all.
| ethbr0 wrote:
| To be fair, that's how most private sector outsourced
| corporate projects go as well. :)
| AmericanChopper wrote:
| Running over budget? Sure. But I've worked on much more
| complicated outsourced corporate projects for companies
| whose total revenue is only a fraction of $2 billion.
| Public sector inefficiency is in a league of its own.
|
| To be clear I'm not saying it's a bad idea either, or not
| worth the money. But I would be surprised if it didn't
| cost billions to implement.
| rsingel wrote:
| It didn't cost billions and it was a key incident that
| led to a huge revolution in how federal websites and
| projects get built, e.g. 18f and the US Digital Service.
|
| https://www.theatlantic.com/technology/archive/2015/07/th
| e-s...
|
| In fact the IRS partnered with the US Digital Service to
| make this prototype in 9 months.
|
| It's fair to be cynical, but also give credit where it's
| due.
| CogitoCogito wrote:
| > To be clear I'm not saying it's a bad idea either, or
| not worth the money. But I would be surprised if it
| didn't cost billions to implement.
|
| How much is Intuit's revenue? Is it "billions"? If so,
| they provide their service at a higher cost.
| jjoonathan wrote:
| Still a bargain next to the private sector.
| lowercased wrote:
| We've had the last few years of one party demonizing the IRS,
| insisting they're "coming after" the little guy. I suspect
| trust in something like this is already starting on shaky
| ground before it's even rolled out, which may contribute to
| "it's such a waste - no one uses it!". Even if a substantial
| of people that need this the most (people least able to
| afford any filing fees), this will continue to be fought. :/
| willis936 wrote:
| Just because it's true doesn't fireproof their pants. They
| already operate a service that is not free to build operate,
| and we know beyond a shadow of a doubt costs taxpayers
| needless additional billions of dollars.
|
| So then why would the taxpayers not want to invest an
| alternative that could spend "needless billions" to save
| additional needless billions?
| sidewndr46 wrote:
| forget a "free filing" system.
|
| Why can't the IRS just send me a statement with my
| obligations and if I don't want to contest it I pay and I am
| done?
| twoodfin wrote:
| Think about all the information (marital status,
| dependents, residence, childcare spending, healthcare
| spending, education spending, charitable contributions,
| ...) you need to correctly calculate your taxes owed. Now
| imagine that the IRS is tasked with maintaining all of this
| information in a single database so they can send you your
| "statement".
|
| Folks argue that most of this information is available to
| some level of government already, but that's a far cry from
| centralizing all of it in what by definition must be an
| easily accessible form.
|
| Dramatically simplify the tax code and this approach
| becomes feasible without being a security and privacy
| nightmare.
| sys_64738 wrote:
| > Think about all the information (marital status,
| dependents, residence, childcare spending, healthcare
| spending, education spending, charitable contributions,
| ...) you need to correctly calculate your taxes owed. Now
| imagine that the IRS is tasked with maintaining all of
| this information in a single database so they can send
| you your "statement".
|
| There's nothing hard about updating a few values with
| these then you're done in five minutes. State governments
| already do simple walkthrough forms and federal is really
| no different. If you have a complex tax situation then
| that's your problem to deal with. Don't burden 99.9% of
| the population with something that should be free, should
| be simple, and should be fast.
| LapsangGuzzler wrote:
| Because increasing the friction around paying taxes makes
| people angrier about having to pay taxes and plays into
| larger political narratives around whether the government
| is effective or not.
|
| It's a huge, political dark pattern designed to keep people
| angry at the government to lower public sentiment towards
| the government.
| iso1631 wrote:
| Because that's how it works in other countries, and that
| means people get less riled up culturally about tax
| newsyish wrote:
| Agree, as an American now living/working overseas, it is
| mind blowing how easy it has been to deal with taxes in
| my foreign country - I don't have to do anything. Taxes
| are withheld out of my paycheck, and this foreign
| government sends me a letter at the end of the year
| telling me how much I paid. I don't have to submit
| anything. So much easier. Except I have to still have to
| spend $ to Turbotax efile an American IRS return to tell
| the IRS I owe no taxes. How dumb is that.
| sidewndr46 wrote:
| paying taxes is not a voluntary thing for 90% of America.
| It gets taken out on your paycheck before you get it,
| which is your only form of income.
| abathur wrote:
| I think GP is suggesting that some interests _want_ the
| process of filing your taxes to be annoying
| /frustrating/degrading/disruptive to increase anti-tax
| sentiment.
|
| (I.e., most people have already been deprived of the
| funds for some fraction of the year; what interest is
| served by making them waste time finding records and
| jumping through hoops and potentially paying a third
| party to help them provide the IRS with information that
| it mostly already has?)
| sokoloff wrote:
| I think there's another group of people who want to more
| closely tie the notion that "government is funded by
| taxes" to "government spending programs are largely
| choices in the short-term and entirely choices in the
| long-term".
|
| To that end, I would like taxes to be due about 4
| Tuesdays before the Election Day Tuesday. If you want to
| vote for politicians who are campaigning on spending a
| lot of taxpayer money for good programs, so be it, but do
| it with recent memory of having paid your taxes (assuming
| you are in the slight majority* who pay federal taxes on
| net). If you want to campaign on spending a given amount
| of taxpayer money, whether more, the same, or less than
| today, your campaign should be interpreted close to
| taxpaying time.
|
| I don't want it to be more onerous or annoying to pay
| taxes. I do want people to recognize that taxes and
| spending are linked (and frankly, ought to be more
| closely linked than they are today, IMO).
|
| * - which until very recently was a slight _minority_ of
| households who paid federal taxes on net.
| RC_ITR wrote:
| Some interesting points here:
|
| >I would like taxes to be due about 4 Tuesdays before the
| Election Day Tuesday.
|
| Most people pay taxes in small increments every 2 weeks
| _then_ get a refund around tax day, so your plan may not
| do what you think.
|
| >I do want people to recognize that taxes and spending
| are linked
|
| To your own point, they really aren't. [0]
|
| >But do it with recent memory of having paid your taxes
| (assuming you are in the slight majority* who pay federal
| taxes on net)
|
| To add some color on this [1]:
|
| _But, for the most part, people don't pay income tax
| because they have little income. About 60 percent of non-
| payers make less than $30,000 and another 28 percent make
| between $30,000 and about $60,000._
|
| _Of the 72 million households that will pay no federal
| income tax this year, about 24 million, or roughly one-
| third, are age 65 or older._
|
| [0]https://fred.stlouisfed.org/graph/?g=17dyP
| [1]https://www.taxpolicycenter.org/taxvox/tpc-number-
| those-who-...
| sokoloff wrote:
| Oh, right. I did skip stating an important step in the
| plan [so, upvoted]. I would do away with the withholding
| scheme (perhaps creating a parallel savings mechanism)
| and force income earners to write a check/do an ACH for
| their taxes.
|
| Under that system, I'm totally fine if people get a $1K
| refund after writing a check for $15K in taxes withheld.
| That would still demonstrate the linkage sufficiently to
| inform their voting choices.
| RC_ITR wrote:
| Sure, but again to your own point, the share of voting
| Americans who don't earn income (and therefore pay no
| taxes) because they are over 65 is already 1/3 and only
| going to increase.[0]
|
| [0]https://www.kff.org/other/state-indicator/number-of-
| individu...
| sokoloff wrote:
| There will always be zero tax payers with the right to
| vote.
|
| That's OK, especially since most of those who are now
| over 65 and retired worked and voted on
| reps/platforms/policies from 18-65 and earned income/paid
| taxes for probably ~40 of those years.
| bandyaboot wrote:
| Is the status quo not fairly neutral in terms of which
| aspect of government spending is more fresh in peoples'
| minds--the benefits vs the cost? Otherwise this just
| seems like it's about biasing people in a particular
| direction.
| mmcclure wrote:
| I'm not sure if you're describing something else, but tax
| withholding is voluntary. You can opt out and choose to
| pay your estimated taxes as a lump sum, but that also
| requires a level of budgeting that I'd argue most people
| don't have the financial literacy/self-control to do
| effectively.
| icouldntresist wrote:
| This brings something up which I don't understand about
| US tax code. Why can't I be taxed on income which I've
| already earned instead of having to estimate to within
| ~5% (IIRC) what I _should_ earn? I 'm sure there are
| reasons for this, but this seems broken.
| nulbyte wrote:
| I think this is largely do to having a progressive and
| conplicated tax system. If work one job, earn salary,
| don't receive a variable bonus, and work the whole year
| at the same rate, it's easy enough to calculate.
|
| But, get a raise, take a pay cut, find a new job, start
| or stop a second job, or a third, or fourth, get paid
| hourly, get sick, take time off to care for a sick family
| member, have a kid, go back to school, graduate, get
| married, get divorced, get a mortgage, pay down your
| mortgage, ... There are all sorts of scenarios that could
| change your tax situation on both the federal and state
| level, making it difficult to calculate how much you
| would owe up front.
|
| What it really boils down to is our tax codes suck, and
| too many rich folk are keen on keeping it that way.
| ROTMetro wrote:
| You get penalties and an angry letter from the IRS if you
| are over a certain dollar amount and don't pay
| quarterlies.
| sidewndr46 wrote:
| Please explain in detail the legal process that allows
| you to opt out of paying your payroll taxes as you go and
| instead pay after the tax year has completed.
| bandyaboot wrote:
| To dispense with the unnecessary snark, you can claim
| exemption for withholding, but only if you had no tax
| liability in the previous tax year and you expect the
| same to be true of the current tax year.
| [deleted]
| TheNewsIsHere wrote:
| I did this as a 1099-contractor, since that's about the
| only way to do it as a contractor.
|
| Paying estimated quarterly taxes four times a year wasn't
| bad. I calculated my withholdings, remitted my tax
| payment through EFTPS, and was never surprised at tax
| time. I don't think I ever got a refund or owed when I
| was doing it myself.
|
| I learned that many people who have never contracted
| before are shocked they have to do this, lost on how it
| works, and had (then) no good place to go for actionable
| advice. I found that surprising and kind of sad in a way.
| We could be doing so much better with financial literacy.
| Projectiboga wrote:
| Our tax system covers a lot more types of 'income' than
| most other countries. The USA taxes you on all earning
| worldwide, but they don't see anything out side of the
| US. Now since 1993 you are supposed to declare any
| foreign bank accounts too. And there are many still cash
| based businesses that they can't easily estimate your
| earnings for. It is crappy, and it is also part of
| lobbying to keep in complex. Both accountants, lawyers
| and for the lower classes the tax preparation companies
| all want complexity.
| kelnos wrote:
| That kinda doesn't matter. Those things account for a
| single-digit (at most) percent of all taxpayers. People
| with complicated tax situations will have to do more work
| to pay taxes. But well over 50% of US taxpayers could
| make use of a simpler, IRS-provided system wherein they
| just get sent a bill and can choose to pay or contest.
| sys_64738 wrote:
| This doesn't impact most people in the USA. A simple
| system offered for free by the IRS is good enough for 99%
| of folks. If you have a complex situation then that's
| your problem to pay for. Not mine.
| voisin wrote:
| I don't think being sent a statement of account is what
| causes other nations' countries to not get riled up
| culturally about tax. To the extent that a nation's
| populace doesn't get riled up about the taxes they pay, I
| think it is from a feeling of (a) representation and (b)
| the tax dollars being spent effectively.
|
| In the US there is a feeling of lacking representation on
| both sides, which I suspect is due to corporate lobbying
| and the culture wars, and I think a feeling of
| ineffective spending, again I think due to lobbying, and
| also pork barrel projects.
|
| I think the answer is to remove corporate lobbying and
| limit campaign spending.
| andybak wrote:
| Imagine if they spent that money on, you know, making a better
| product.
| jfengel wrote:
| The product is fine. It doesn't really need radical
| improvements. That money should have been returned to
| shareholders.
|
| What it needs is to not exist. The product does a fine job of
| doing an unnecessary thing. For the vast majority of users it
| should be a tax bill or refund check that arrives with no
| user intervention at all.
|
| The remaining use cases should be handled differently --
| perhaps by a professional. That professional may themselves
| want such software, but it's likely a different interaction
| than software also aimed at users with much simpler use
| cases.
| stetrain wrote:
| They seem to spend all of their money adding fake slow
| progress bars that advertise their premium version to you.
| lIl-IIIl wrote:
| They would have a better product, but they'd be out of
| business since without lobbying against it, the government
| product would actually be built.
| snarf21 wrote:
| But lobbying has such better ROI!! .. We also need lawys from
| the federal level that all these "known" things must be
| pushed to the IRS and the state and local use that as their
| source of information .. Then this software just needs to
| deal with federal deductions that aren't digital or optional
| like charity .. We have such a dumb system
| asah wrote:
| Alas, free would still win enough marketshare for it to make
| sense to spend on lobbyists to delay this. :-(
| clucas wrote:
| >With two orders of magnitude of lobbying dollars difference on
| either side, I'm surprised this is going anywhere.
|
| I think everyone should use this to update their priors on the
| impact of lobbying. Government action is not contingent on a
| dollar vs dollar comparison. Citizens United did not result in
| a raft of unpopular legislation being passed. (Not saying it
| was the right decision, just that its impact was overstated.)
|
| We should all feel heartened that our government is responding
| to good arguments over lobbying dollars.
|
| Another one we should keep fighting on is Right to Repair. John
| Deere and the like can put as much money into the fight as they
| want - as long as we have people like Rossman being gadflies,
| sanity will win. Eventually.
| OkayPhysicist wrote:
| Frankly, by far the biggest impact of lobbying happens when
| one side has anything at all, and the other side doesn't.
| Most lobbying isn't bribery, as much as it is spending money
| to get create a situation where the politician will listen to
| you explain your case. When the politician has heard both
| sides in such a manner, they'll basically vote with their
| conscience. When only one side has explained their argument,
| it's a lot easier for the politician to vote with that one.
| hot_gril wrote:
| It's not a crazy statement. I expect the IRS's system to be
| worse and more costly than TurboTax on the technical side, at
| least initially. But it's a step in the eventual right
| direction; I shouldn't need a third party to pay taxes.
| daniel-cussen wrote:
| > "will unnecessarily cost taxpayers billions of dollars."
|
| This is undisputably true. H&R Block n Intuit are taxpayers, n
| free-file will cost them billions of dollars.
|
| Being real, online taxes through the SII work great in Chile.
| sitzkrieg wrote:
| im glad these shoe-in clowns are finally having to hopefully
| complete w fed direct free efiling
| denimnerd42 wrote:
| I'm not arguing one way or another but one point the tax
| software companies do have is who pays the cost. In the
| commercial product arena, the products are bought by people who
| make over median wage. The lower income folks have simpler
| taxes usually. The free products cover them generally. I may be
| wrong but that's how I see it. I didn't feel the need to pay
| for any software until I was making a lot of money (relative to
| median) and managing a lot of assets.
| hot_gril wrote:
| > The lower income folks have simpler taxes usually
|
| Not sure about that. They qualify for a lot of complex
| rebates and stuff. When you make a certain level that they
| consider lower-middle-class, suddenly your taxes become a lot
| easier (in a bad way).
| seventytwo wrote:
| Minus all the profits the companies take...
| rhaway84773 wrote:
| And you pointed out exactly what the problem with the current
| system is.
|
| The rich can pay someone to do the work for them. This saves
| them time, stress, energy, etc. The poor cannot. They have to
| do all this themselves and then they're open to the risk of
| actually getting something wrong. And the impact of getting
| something wrong is highly imbalanced. If they get something
| wrong and end up paying more tax than they need to there will
| never be a second thought given to it. But if they mess up
| and pay less taxes than they should they will be hit with a
| penalty, interest, and even maybe an audit.
|
| And the idea that everyone should be reasonably competent in
| taxes seems a little ridiculous to be honest especially when
| no one is taught how to do taxes in any point in their lives.
|
| An alternative might be to teach how to do taxes in school,
| but at that point the cost of teaching taxation would far
| exceed the cost of developing this software, never mind the
| human hours that are wasted.
| landemva wrote:
| Another alternate is to eliminate the federal personal
| income tax. W-2 employees would get immediate increase to
| their take home pay and employers would get out of tax
| withholding chores. Feds can just increase the already
| large deficit spending to cover the tax reduction or reduce
| spending.
| ndriscoll wrote:
| > If they get something wrong and end up paying more tax
| than they need to there will never be a second thought
| given to it.
|
| Anecdotally, I messed up copying tax owed from the table a
| couple years back, and the IRS sent me a letter telling me
| I made a mistake and overpaid, along with a check for the
| difference.
|
| In any case, a lot of the complication in the tax code
| comes down to the government incentivizing certain
| behaviors, so it makes sense that we should put more focus
| on teaching people to read the rules and find out what
| those incentives are. Of course a free calculation tool to
| run simulations could help people to understand those
| rules, and we ought to make the actual filing more
| convenient for everyone.
| ROTMetro wrote:
| Many of the lower income folks I know are too nervous/not
| comfortable with their own ability to file their own taxes
| and use tax preparer services. Some also do this in the hopes
| of getting their return quicker, so they not only pay to file
| but then get hit with the equivalent of a payday loan on
| their return.
| Avshalom wrote:
| https://www.reuters.com/legal/government/intuit-
| reaches-141-...
| sokoloff wrote:
| > who pays the cost. In the commercial product arena, the
| products are bought by people who make over median wage
|
| ~40% of households pay no federal income tax today. They'd
| literally pay nothing for this service.
| ROTMetro wrote:
| But do 40% of households not file tax returns, because that
| is what we are talking about here, and I'm pretty sure a
| large portion of that 40% do file because they get
| refunds/rebates, and I'm pretty sure a large portion of
| that portion use a service because they can get their
| refund/rebate quicker (though as a loan at payday loan
| advance rates).
| sokoloff wrote:
| I'm not disputing that many of them file a return. I'm
| saying that they _wouldn 't possibly be paying_ for this
| system, which is paid for by federal taxes.
| xboxnolifes wrote:
| > The lower income folks have simpler taxes usually. The free
| products cover them generally. I may be wrong but that's how
| I see it.
|
| Sure, but that's also how _taxes_ generally work as well.
| People making less money will be paying less for the IRS
| service just as much as they would be paying less for the
| TurboTax system, as it currently is.
| lolinder wrote:
| If you are self-employed, you have to pay for TurboTax
| regardless of your income level. We had to pay for TurboTax
| when I was a student and my wife was making $20k a year
| teaching music lessons.
| hot_gril wrote:
| You don't have to, you could try to do the paperwork
| yourself and severely screw it up like I did.
| ellisv wrote:
| That might be true in theory, but in practice companies like
| Intuit and HR Block use dark patterns to trick users into
| paying when they should qualify for free filing.
|
| You can read about the settlement from ProPublica:
| https://www.propublica.org/article/intuit-will-pay-
| millions-...
| em3rgent0rdr wrote:
| "Free" should mean free of complexity. The big cost of doing
| taxes is not in submitting the taxes, but rather is the enormous
| byzantine complexity of calculating how much you owe.
| seventytwo wrote:
| Good.
| harshreality wrote:
| > "An IRS direct-to-e-file system is redundant and will not be
| free - not free to build, not free to operate, and not free for
| taxpayers," Plummer said, adding that it "will unnecessarily cost
| taxpayers billions of dollars."
|
| There's no reason why this has to be true. It might be true, but
| only due to inefficiencies.
|
| The IRS already has code to calculate and validate everything.
| That's how they know if you make an error on your taxes or failed
| to report something. All they need to do is refactor it and turn
| it into an application. That's not a trivial effort, but all the
| functional code has already been written by the IRS.
|
| My impression is that most of the cost of development for Intuit
| and H&R is keeping up to date with changes in the tax code (and
| possibly updating data import methods, since those are controlled
| by 3rd parties and may change). The IRS already has to do the
| same data checking and cross-checking and import. Therefore,
| keeping tax prep privatized is a massive duplication of effort.
| sokoloff wrote:
| > All they need to do is refactor it and turn it into an
| application. That's not a trivial effort, but all the
| functional code has already been written by the IRS.
|
| That "not trivial effort" sure sounds like "will not be free -
| not free to build, not free to operate, and not free for
| taxpayers" to me.
|
| Don't get me wrong; I'm entirely in favor of this action, but I
| have no illusion that it will be free to build, nor free to
| operate, nor free for taxpayers.
| harshreality wrote:
| The point is that the bulk of the cost is already duplicated.
| When was the last time Turbotax's UI had a major revamp? The
| conservative narrative is, "Intuit and H&R do this so IRS
| doesn't have to. Isn't it nice that you don't have to pay
| more for your tax prep software because the private sector is
| so efficient?"
|
| No, we pay Intuit (or H&R or an actual accountant), and the
| federal government also spends money so the IRS can develop
| essentially the same functional code to check tax returns
| that the third party is preparing according to the same
| rules.
|
| In 2006 during the primaries, one of Obama's operatives
| floated $2 Bn as the cost of tax prep. Not all of that would
| be avoided by an IRS "free" e-filing app, but even if
| e-filing apps only represent 25%, it wouldn't take that long
| at $500 million per year to pay for the development of an app
| and refactoring IRS's existing code to be used in the app,
| even if it turns into a horribly inefficient project. How
| many billions can IRS spend on a turbotax killer without
| producing a turbotax killer?
| tombert wrote:
| About a year ago, I got audited by the IRS. It was 100% my fault;
| I had sold a good chunk of stock in 2020 and but forgot to report
| the capital gains on my tax form (a tax form that was, evidently,
| automatically approved by the fed in about ten minutes!).
|
| So last year I got a bill in the mail for $8,000; $7,000 for the
| actual taxes I owed, and a $1,000 fine. I was able to call and
| get the fine lowered (thanks to advice I received in HN
| actually!) and I wasn't "angry" with anyone but myself. I _did_
| owe the money, I didn 't blame the IRS for wanting it.
|
| But it did kind of make me wonder something: if the government
| was able to find out that I screwed up on my taxes, then why am
| _I_ doing anything? Clearly they have all the data and
| information necessary to determine how much I actually owed, and
| clearly they were able to spot my mistake, so why make me pay $60
| for TurboTax at all? Why not just send me a bill or refund every
| year?
|
| This is a step in the right direction.
| cragfar wrote:
| Because you could have gotten married, been blinded, and
| started a business grossing $900k but only netting $100k a year
| and they would know none of that outside of a couple of 1099s.
| What they did for you though is look at your return, and saw
| you didn't declare investment income that they knew about from
| a 1099.
| tombert wrote:
| Sure, but couldn't that be done on a case-by-case basis, and
| the fed just sends you a refund/bill at the end of the year
| that you're responsible for amending?
|
| I'm not saying a company like Intuit adds zero utility, I'm
| just saying that I think a lot of taxes are simple enough to
| where it would be relatively easy to just give people a
| default thing. If the IRS gets something wrong, or is missing
| some info, then I think a software like TurboTax makes a lot
| of sense, but isn't that much more of an edge case?
| Fundamentally, the complexity of my taxes _didn 't_ really
| change in the last five years.
| cragfar wrote:
| When the 1040EZ was a thing, only 16% of filers used it.
| Those would be the candidates who could safely have the IRS
| do their return. With anyone else, there's all kinds of
| information the IRS has no clue about.
| jedberg wrote:
| Most people don't use the EZ because even the most common
| deductions (that the IRS knows about, like your mortgage
| and state taxes and your stock investments through a
| firm, etc.) couldn't be put on there.
|
| But the IRS still knows about them.
|
| Also they could put a website where you could spend five
| minutes entering the most common information they don't
| already know, and then spit out your bill.
|
| It's not that hard. Most filers situations aren't that
| complicated.
| cragfar wrote:
| >Also they could put a website where you could spend five
| minutes entering the most common information they don't
| already know, and then spit out your bill.
|
| That's basically what they're doing.
| jedberg wrote:
| No it's not. They are setting up a free filing that will
| still ask you to input forms they already know about just
| like turbotax does.
| jedberg wrote:
| So they send you a bill and you send back a form that says
| "here is a thing you didn't know about that changes the
| math".
|
| 87% of tax filers could have their taxes filled out by the
| IRS because they IRS already has all the information.
| cragfar wrote:
| They definitely don't have all that information. That was
| my point.
| jedberg wrote:
| But your point is wrong. In 87% of the cases, the IRS
| _does_ have all the information. Even if you have
| donations or other deductions it doesn 't matter, because
| 87% of people take the standard deduction since it's more
| than their itemized deductions.
|
| And marriage and death records are public, as are
| probate. So they would have all of that too.
| cragfar wrote:
| There's really no point in continuing this discussion if
| you think the IRS is scraping data of every county in the
| US for marital status changes.
| [deleted]
| jedberg wrote:
| Of course they aren't. But they could if there was
| automatic billing.
|
| Or simply ask you if the most common situations apply to
| you, just like turbotax does.
| robomartin wrote:
| Because what they don't do is make sure you get all the
| deductions you are entitled to receive.
|
| Like it or not, tax law is complex. This is where a good CPA is
| worth whatever they might charge to do the work.
| tombert wrote:
| I did actually get a human to do my taxes for me this year.
| It wasn't even that much more expensive, though I think I
| don't generally do anything too crazy deduction-wise.
| jedberg wrote:
| Most people (87%) take the standard deduction anyway because
| it's better than their itemized deductions. All those people
| could just take the bill from the IRS (that would include the
| standard deduction).
|
| The could also put up a website where you spend five minutes
| inputing the most common deductions they don't know about.
| It's not that hard, most filers situations aren't that
| complex.
| Avamander wrote:
| It doesn't have to be complex though, like it or not.
| enterthematrix wrote:
| Intuit is a bunch of vampires stealing money from Americans.
| Every developed country in the world has a relatively easy tax
| system for citizens, but only the US operates in this insane way
| where they willingly tax citizens by not providing them with an
| easy way to do taxes, and instead sends them to the wolves of
| Intuit and others.
| Nifty3929 wrote:
| Why blame intuit for our crappy tax policy? Sure, they might
| lobby for more complexity, but the legislators that we elected
| pass the laws.
| Kalium wrote:
| Intuit is directly responsible for a long and aggressive
| lobbying effort to keep tax filing expensive and privately
| run.
| hellojesus wrote:
| Yes, but any public representative should easily see past
| that nonsense. It's their entire job.
| sokoloff wrote:
| My kids are directly responsible for a long and aggressive
| lobbying effort to eat ice cream every night.
|
| Because we are effective parents and do our job, they don't
| get their way.
|
| I can't see why our elected representatives can't manage to
| act with the same level of responsibility.
| landemva wrote:
| Those voting won't recall the politicians because the
| people are distracted by the latest divisive outrage.
| cmdli wrote:
| Do you expect voters to switch sides of the aisle over
| this issue? If not, then politicians have no reason not
| to take industry money. After all, if you have access to
| all the campaign and other funds without losing voters,
| then it would be idiotic not to follow the money.
| MadcapJake wrote:
| Because elected reps believe that they need to support
| constituent businesses in addition to constituent people.
| And those constituent businesses spend more money to
| ensure they are heard.
|
| I have often wondered if we could split the house in two:
| one for people and one for industries. This would force
| transparency and bring the primary issue of double speak
| and lobbying to the forefront. It would turn them into
| official cogs in our body politik instead of forcing reps
| to work and speak in a duality.
| GavinMcG wrote:
| Two parties can both be to blame.
| Vortigaunt wrote:
| Please read the article next time.
|
| >Republicans on the House Appropriations Committee in June
| proposed a budget rider that would prohibit funds to be
| used for the IRS to create a government-run tax preparation
| software, unless approved by a group of House and Senate
| committees.
|
| >The move "safeguards the IRS from an obvious conflict of
| interest where the tax collector becomes the tax preparer,"
| the bill's summary states.
| Quekid5 wrote:
| As someone from a country with ludicrously (needlessly)
| complicated tax law: Unless you have a really complicated
| situation, you just get a pre-calculated form on a government
| site you basically just have to look at and approve. That
| covers about 90%+ of everyone.
| beAbU wrote:
| Even developing countries! In my shitty country this year I got
| an email, and 2 days later my tax return money showed up in my
| bank account. I need to fill out some extra forms to claim my
| work from home tax benefit, but it's a minimal amount of
| effort, and it's optional.
| son_of_gloin wrote:
| Free tax filing through the government? Why that's basically
| communism!! Free enterprise is the best option for everything!!
| /s
| NamTaf wrote:
| From a non-US perspective, hearing/reading about how tax returns
| work there is some kind of crazy Byzantine nightmare.
|
| In Aus, I file it through a free, online government portal.
|
| _Most_ of my stuff is pre-filled: personal income, social
| support payments, bank interest, dividends /managed fund
| distributions, etc. Previous years' deductions are rolled over
| with relevant data pre-filled, which then prompts me to fill in
| the blanks through a series of steps. There's relevant
| depreciation calculators for various work-related purchases
| (laptops, cars, etc.) that all align with the tax office's advice
| around depreciation durations and rates.
|
| All of this is known because most (i.e. bigger) companies are
| required to hold your tax file number and report on salaries
| paid, pension contributions and withheld tax. If you don't give
| them your TFN, they tax you at the highest rate and then you will
| get the difference back upon filing a return. If it's not pre-
| filled, you get your data on a payment summary at the end of
| financial year and just put it in manually - again, it guides you
| through this. For a standard white collar worker, because my
| employer knows how much they're paying me, they can accurately
| estimate the total income I'll get over a year and thus
| accurately withhold tax. This means my tax return is generally
| pretty much a wash until deductions or extra income starts moving
| it, but that's only a couple of percent usually.
|
| For stuff like bank interest, you can choose to give them your
| TFN, or you can just enter it manually and the return process
| will calculate it out in the process.
|
| You can of course delete and re-enter any of the pre-filled
| information if it's somehow wrong. You're not under any
| obligation to use the pre-filled data.
|
| The upshot of this is that for the overwhelming majority of
| people who don't have complicated tax arrangements, it's entirely
| possible to do it all by yourself, for free. You are of course
| always able to have an accountant do it for you (the system has
| processes for them to file a return on your behalf). The
| underlying principle is that everyone can _in theory_ do their
| own tax return no matter how complex, though of course that means
| reading up on a lot of the tax code (the tax office tries to
| provide relevant examples of how the various rules work). But if
| you 're a standard white collar employee working a 9-5 with some
| basic investments (e.g. your pension and a small stock portfolio,
| maybe an investment property if you want to throw in some non-
| prefilled complexity, and you've got some basic deductions such
| as through donations and work expenses) it's going to be pretty
| easy to do with a few hours' research, max.
|
| Hell, I think I could still even use the paper forms for this
| all, but _why_?
|
| I suspect that US readers will, on average, baulk at this level
| of government oversight and the idea that big brother sees all of
| your income, etc. but the reality is it's still possible to do
| cash-in-hand jobs and lie on your return so if you're in for a
| penny re: committing tax fraud, you may as well be in for a
| pound. Besides, the main way of doing the dodgy on your tax
| return in Australia is via declaring deductions that you're not
| fully entitled to (e.g. 100% deduction of your mixed
| work/personal phone, rather than just the pro-rata amount of use
| for work) and hoping that you don't stand out too much on a
| statistical analysis to be audited.
| jcranmer wrote:
| > I suspect that US readers will, on average, baulk at this
| level of government oversight and the idea that big brother
| sees all of your income
|
| No. Most US readers are aware that the US government _already_
| collects this level of detail, and are frustrated that we can
| 't get access to the information the government already has and
| instead have to painfully collect and provide the information
| the government already knows.
| sys_64738 wrote:
| I'd also like to add that I hope all tax prep companies crash and
| burn and everybody loses their jobs. They are parasites.
| bigfryo wrote:
| Our government has definitely shows that they can implement
| complex websites
| BurningFrog wrote:
| I don't want a free tax filing system.
|
| I want the IRS to give me form - paper or digital - with the data
| they already know from my employer, bank, etc already in.
|
| I'd be happy to enter the other things myself.
| winter_blue wrote:
| Wouldn't that create an incentive for people to under report
| their income?
| VWWHFSfQ wrote:
| Is that different than now
| hellojesus wrote:
| By keeping their hand secret, the citizen has to error on
| ovrreporting so as to avoid unreporting penalties. So it
| makes sense for the gov not to show their hand. The gov is
| akin to blackjack dealer.
|
| However, it's not clear to me how self reporting/filling is
| not a 5A violation of self incrimination.
| gsliepen wrote:
| When I was living in Sweden, it was like that. I got a paper
| form with everything already filled, including income, loans,
| assets and so on. If everything was correct and you didn't have
| to change or amend things, then you could send a single text
| message (SMS) to confirm that everything was OK. Since
| estimated taxes are already deducted from your salary by your
| employer, you only have to pay the difference with that
| estimation. A few of the years they overestimated that a little
| bit, and I got the money back on my bank account within a
| month. This is how it can be.
| ellisv wrote:
| They will if you get it wrong enough.
| atlasunshrugged wrote:
| Having just received a letter in the mail saying I owe an
| extra ~$850 from 2020 I can confirm this is the case!
| RetpolineDrama wrote:
| Did they say what for?
| atlasunshrugged wrote:
| They probably did at an extremely high level, I already
| paid and threw it away (which was silly... don't do tax
| stuff when mentally exhausted) but it certainly had no
| specific details or context on how they arrived at that
| conclusion, what exactly was wrong, etc. It did have some
| very serious statements about failure to pay, increased
| penalties for late fees, etc. and having tried to call
| the IRS in the past, I know that it's worse than pulling
| teeth to get real answers so I decided this fight wasn't
| worth it. That said, I have also had them come back
| before with a mistake on their end and a check I wasn't
| expecting so my current mental model for the IRS is that
| they are honest brokers in general, just really really
| slow.
| ellisv wrote:
| They will say what for and give you the opportunity to
| dispute it. You can even call and talk with someone. They
| aren't faceless, heartless, or infallible. If it's their
| mistake, or an honest mistake on your part, they're
| pretty easy to work with.
| atlasunshrugged wrote:
| I'd disagree a bit with the faceless part and being able
| to call and talk with someone. It depends how much
| patience you have to wait on the phone.
| mikestew wrote:
| Yeah, but the "tax preparation" fees of the IRS are
| considerably higher than Intuit's.
|
| (IOW, if you rely on the IRS to tell you what you owe,
| there's probably a penalty attached.)
| singron wrote:
| It's not bad. The form actually says you don't have to
| calculate your tax and you can leave the remaining fields
| blank. The IRS will crunch the numbers and send a
| bill/refund. If your income is simple, that's a good way to
| file. If you made a mistake crunching that part yourself,
| they will correct it. If you get a refund or don't owe
| much, then it's not a big deal.
|
| If you have choices (e.g. joint vs separate, itemized vs
| std deductible), then you want to crunch the numbers
| yourself so that you can make the best choice. You also
| need to be careful if you have reporting requirements that
| don't affect the tax total that year like IRA backdoors and
| AMT books.
| bozhark wrote:
| > Republicans on the House Appropriations Committee in June
| proposed a budget rider that would prohibit funds to be used for
| the IRS to create a government-run tax preparation software,
| unless approved by a group of House and Senate committees.
|
| The move "safeguards the IRS from an obvious conflict of interest
| where the tax collector becomes the tax preparer," the bill's
| summary states.
|
| That's a hard R in Republican
| ellisv wrote:
| What a ridiculous take. Use of the software wouldn't be
| compulsory. The IRS already (mostly) knows what the payer owes.
| JohnFen wrote:
| Technically, the use of the software isn't compulsory. You
| can still fill out the physical tax forms and mail them in.
|
| That said, I am solidly on board with the IRS just computing
| the taxes for taxpayers and sending them a bill. Taxpayers
| who dispute the bill can then just file their own taxes as
| normal.
| ellisv wrote:
| The IRS will always need some info from the tax payer.
| sokoloff wrote:
| There are two problems with that:
|
| The one that affects most people is that the IRS system is
| "eventually consistent", but they do not currently have the
| information needed to file your return on the date your
| return is due.
|
| If you don't believe me, request your transcript-of-records*
| on your account filing date. Then request it again in early
| fall. The latter will, IME, be complete while the former will
| not.
|
| * - https://www.irs.gov/individuals/get-transcript
|
| The one that affects only a subset of people is that many
| deductible items that go into tax returns are never shared
| with the IRS at all and only the taxpayer knows about them
| (today).
| jedberg wrote:
| You're technically correct, but in most cases the date the
| original form was filed with the IRS was around the
| deadline. It just takes them a while to upload them all.
|
| But we could also just make the filing deadline October for
| individuals. Most of those late arriving forms are K1s for
| partnerships that only file in April.
| sdenton4 wrote:
| There's a terrible conflict of interest in my local deli, where
| the person taking my order also collects my money. Shocking
| that it's allowed.
| goplayoutside wrote:
| There would be a conflict of interest if the IRS was incentived
| to maximize tax revenues. Are they? Does anyone at the IRS get
| paid more if tax revenues are up in a particular year?
|
| I would think that they're only incentivized to accurately
| apply the existing tax laws, and those laws are written by a
| separate entity.
| benguild wrote:
| Now that we have technology can't taxes just be automatic when
| transactions happen?
| sokoloff wrote:
| First, you'd have to ban cash.
|
| Second, you'd have to give up substantial amounts of privacy
| (both related and unrelated to the banning of cash).
|
| As an example, to make taxes automatic, you would have to
| annotate each electronic transaction with its taxable
| treatment.
|
| If I buy a ticket on Delta to go on vacation, that has one tax
| treatment (no effect). If I buy that same ticket on Delta to go
| on a business trip, that has a _different_ tax treatment.
| (Further, I would wager that telling airlines which scenario it
| is would not be helpful in terms of ticket pricing /terms.)
|
| If I buy a sandwich on vacation vs that same sandwich on a
| business trip, different tax treatments...(and the business
| trip airline ticket even has a different tax treatment than the
| business trip sandwich).
| miki123211 wrote:
| Why hasn't a non-profit build this before?
|
| If Intuit can build a system and charge for it, it should be
| entirely possible to build it as open source, software, and it's
| the kind of think that some non-profits would probably go for.
|
| THe IRS will have a slightly easier time building a system like
| this, as they can pre-fill some of the data that they already
| have, but it should still be possible to at least match Intuit
| here.
|
| It feels like this is an area where competition would be a good
| thing. The IRS's system might be good or it might be bad. If the
| job was done by NGOs, you could have multiple systems, all
| learning from each other's successes and failures, and users
| would choose the one that is the most intuitive. Maybe a better
| idea would be to give taxpayer data to non-profits (after user
| authentication and consent, of course.)
| kevinventullo wrote:
| Nowadays I outsource my tax prep to a professional, but I'd still
| be happy if this system can serve the folks with the easiest-to-
| file taxes. I don't even care about the economic ROI, it just
| seems like a nice thing to have in a relatively wealthy country,
| like parks or libraries.
| toomuchtodo wrote:
| Between this and FedNow, US public goods are firing on all
| cylinders. You love to see it.
| polski-g wrote:
| FedNow is still private sector, its ran by private banks.
|
| There is nowhere with a .gov domain you can go to, to send
| money to another US citizen.
| toomuchtodo wrote:
| Federal Reserve operates at the direction of Congress, who
| also directed them to build FedNow. FedNow is operated as a
| utility with a cost recovery (vs profit) model. Ergo, public
| good.
|
| https://www.federalreserve.gov/aboutthefed/fract.htm
|
| https://www.pymnts.com/news/b2b-payments/2019/house-
| committe...
| dang wrote:
| Related:
|
| _IRS tests free e-filing system that could compete with tax prep
| giants_ - https://news.ycombinator.com/item?id=35950836 - May
| 2023 (567 comments)
|
| _Call on the IRS to provide libre tax-filing software_ -
| https://news.ycombinator.com/item?id=35705469 - April 2023 (129
| comments)
|
| _60M Americans have taxes so simple the IRS could do them
| automatically_ - https://news.ycombinator.com/item?id=35476709 -
| April 2023 (277 comments)
|
| _Lobbyists begin chipping away at Biden's $80B IRS overhaul_ -
| https://news.ycombinator.com/item?id=35381701 - March 2023 (214
| comments)
|
| _Intuit pouring money into lobbying amid push for free
| government-run tax filing_ -
| https://news.ycombinator.com/item?id=34840039 - Feb 2023 (178
| comments)
|
| _IRS builds task force to explore running its own free e-file
| system_ - https://news.ycombinator.com/item?id=34764952 - Feb
| 2023 (199 comments)
|
| _IRS Free File: Do Your Taxes for Free_ -
| https://news.ycombinator.com/item?id=34462122 - Jan 2023 (247
| comments)
|
| _IRS will look into setting up a free e-filing system_ -
| https://news.ycombinator.com/item?id=32753099 - Sept 2022 (408
| comments)
|
| _The IRS could be on the verge of changing the way Americans
| file their taxes_ - https://news.ycombinator.com/item?id=32550841
| - Aug 2022 (17 comments)
|
| _IRS will study free tax filing options_ -
| https://news.ycombinator.com/item?id=32502321 - Aug 2022 (25
| comments)
|
| _TurboTax's fight against free tax filing_ -
| https://news.ycombinator.com/item?id=31072202 - April 2022 (394
| comments)
|
| _Filing taxes could be free & simple. H&R Block & Intuit lobby
| against it (2017)_ -
| https://news.ycombinator.com/item?id=30856968 - March 2022 (114
| comments)
|
| _FTC sues Intuit for its deceptive TurboTax "free" filing
| campaign_ - https://news.ycombinator.com/item?id=30846071 - March
| 2022 (587 comments)
|
| _Ask HN: How does TurboTax get away with dark patterns?_ -
| https://news.ycombinator.com/item?id=30409523 - Feb 2022 (122
| comments)
|
| _Why do Americans have to pay much to file their tax returns
| when the IRS knows?_ -
| https://news.ycombinator.com/item?id=30267361 - Feb 2022 (22
| comments)
|
| _Filing Taxes Could Be Free and Simple. But H &R Block and
| Intuit Lobby Against It (2017)_ -
| https://news.ycombinator.com/item?id=30185484 - Feb 2022 (18
| comments)
|
| _California tried to save the nation from tax filing, then
| Intuit stepped in_ -
| https://news.ycombinator.com/item?id=28944200 - Oct 2021 (283
| comments)
|
| _The IRS has a big opportunity to fix the way Americans file
| taxes_ - https://news.ycombinator.com/item?id=28177289 - Aug 2021
| (12 comments)
|
| ... plus dozens more:
| https://news.ycombinator.com/item?id=35970518
| fallingmeat wrote:
| Wow, good sleuthing!! dang do you have a tool to do that or are
| you just encyclopedic?
| dataflow wrote:
| Kind of unrelated, but didn't the IRS also "move forward" with
| login.gov integration? Wherever did that go?
| at_a_remove wrote:
| I'm interested, but cautious. I'd probably let some other folks
| find the bugs in the system. Yes, it costs me a little money. I'm
| just really avoidant of something like an audit and would rather
| do the tried-and-true until the new thing is up to snuff.
| i_like_pie1 wrote:
| good. turbotax can/should be checked
| jmclnx wrote:
| Lets see, the US has a big election next year, early fund raising
| ? Since the Citizens United Ruling, political bribes are now
| legal in the US.
|
| I believe this system will only support the easiest of tax forms,
| the type any idiot can fill out.
|
| Have one of these: 401k, pretax medical/college accounts, stock
| dividends, non-US interest, income other then wages from
| commercial for-profit companies, you will be SOL.
|
| And I am sure many people can add to the list of these items.
| These are the items that make Tax Accountants the real money.
| JohnFen wrote:
| > I believe this system will only support the easiest of tax
| forms, the type any idiot can fill out.
|
| Which is fine. That would be a huge win.
| Spoom wrote:
| Nearly everything you mentioned automatically files paperwork
| with the IRS _anyway_. I 'm not sure why you think that they
| could not be part of a pre-filled return.
| Volundr wrote:
| I feel like this is a point that gets overlooked in the
| discussion. The IRS ALREADY has software that does your
| taxes. It's just that currently it's used to validate you did
| it correctly and they aren't going to tell you the results
| unless you did it wrong. Sure building this system isn't
| going to be as easy as "give our existing software a public
| URL", but there should be a lot of code reuse happening.
| e40 wrote:
| It's pretty clear why they think this, due to lobbying. I
| think everyone agrees none of those items _should_ be grounds
| for not using this theoretical system.
| lowercased wrote:
| I share some skepticism, but I suspect some basic stuff may be
| supported (out of the gate or soon) - IRA/401k info may not be
| too difficult, at least with data from major players
| (vanguard/fidelity/etc).
|
| I bought and sold two houses, moved between states, and our
| family had two businesses as well as W2 income - all this over
| an 18 month period. I went to an HR Block ('big name, offices
| in multiple states, etc') and they made a lot of mistakes, took
| about 2 years to unwind the mess.
| Analemma_ wrote:
| Brokerages and banks already send the IRS your info about 401k
| plans, HSA/529/etc. accounts, and stock dividends/sales. Most
| (not all, but most) 1099 employers send the IRS your 1099 as
| well. Filling these out yourself is a pointless formality and
| duplicated work in exactly the same way that filling out your
| own W-2 is.
|
| Government-prepared returns won't cover everybody, but they
| will cover a much larger share of the population than you're
| assuming. At an offhand guess, I'd say maybe 90% of people will
| be just fine.
| JumpCrisscross wrote:
| > _political bribes are now legal in the US_
|
| No, they're not. _Citizens_ was problematic. But it says
| nothing about bribes, whether that be handing a politician cash
| or promising them a job. Mischaracterizing it sucks the oxygen
| out of the room for the cause of reform.
| m348e912 wrote:
| >Citizens was problematic. But it says nothing about bribes
|
| Kind of disagree.
|
| In 2016 Sheldon Adelson (a now deceased wealthy casino mogul)
| donated $25 million to the Super Pac "Future 45". The Pac's
| main objective was to run advertising against Hillary
| Clinton. To say that Sheldon didn't have influence on Trump
| akin to bribery is naive. Fun fact, Sheldon's contributions
| is one of the main reasons the US Embassy in Israel is now in
| Jerusalem and not Tel Aviv. (Just a minor example)
|
| Unlimited corporate donations (as a result of the CU
| decision) and superpacs have been the most significant
| influence on American politics of this generation.
| JumpCrisscross wrote:
| > _To say that Sheldon didn 't have influence on Trump akin
| to bribery is naive_
|
| Influence can definitely be bought. But trading influence
| isn't bribery. What Adelson did is closer to a manufacturer
| opening plants in a swing state--despite higher costs--to
| curry favour with its senators than sticking wads of bills
| in their pockets. It's definitely not the same. That's the
| problem. But it's a far cry from wiring Trump money in
| exchange for an executive order.
|
| Blurring the line between bribery, lobbying and campaign
| financing not only sucks the sail out of campaign finance
| and lobbying reform. It also destigmatises actual bribery.
| m348e912 wrote:
| You might have to get out the crayons and explain the
| difference. They seem one in the same to me.
| lxe wrote:
| As much as I love not having to use paid filing software, I don't
| expect the federal government to create something that isn't
| incredibly frustrating to use that costs way too much to build
| ourmandave wrote:
| I wonder if the help system for it will be AI based.
| robszumski wrote:
| As a founder, some of the federal and state software for
| registering in various states, workers comp, etc and the
| estimated tax process as an individual is surprisingly decent.
| It's not great, but the state and federal level stuff is
| generally ok.
| [deleted]
| rufus_foreman wrote:
| A couple years ago, the IRS didn't pay my income tax refund
| for six months, and during that time they couldn't tell me
| why they weren't paying, when or if they were going to pay
| it, what the status was, whether there was anything wrong, or
| when they would have any information on what the status was,
| and this was after waiting for many, many, many hours to get
| in contact with the person that wasn't going to tell me
| anything at all.
|
| And this is the IRS that wanted me to provide them with a
| selfie in order to make estimated income tax payments online.
|
| That is pretty far from OK. I will be paying for tax
| preparation software one way or the other, I would much
| rather pay the private sector so that I have a choice if I
| don't like a particular application.
| hedgehog wrote:
| The financial sector is the clear winner in who makes worse
| user-facing software though. I've interacted with a whole
| variety of US government services from federal to city and
| they're on average better than the garbage I have to use for
| back end management related to bills and various investments.
| Consumer tax software is downright user-hostile.
| ourmandave wrote:
| If you qualify, IRS will already figure your taxes for you.
|
| https://www.irs.gov/taxtopics/tc552
|
| I wonder what happens if _they_ make a mistake?
| junar wrote:
| That's not the same thing. For the process referenced by your
| link, the taxpayer would still need to fill in most lines, only
| leaving a few calculation lines blank for the IRS to finish.
|
| > If you want the IRS to figure your tax. Read Form 1040 or
| 1040-SR, lines 1 through 15, and Schedule 1 (Form 1040), if
| applicable. Fill in the lines that apply to you and attach
| Schedule 1 (Form 1040), if applicable. Don't complete Form 1040
| or 1040-SR, line 16 or 17.
|
| > If you are filing a joint return, use the space on the dotted
| line next to the words "Adjusted Gross Income" on the first
| page of your return to separately show your taxable income and
| your spouse's taxable income.
|
| > Read Form 1040 or 1040-SR, lines 19 through 33, and Schedules
| 2 and 3 (Form 1040), if applicable. Fill in the lines that
| apply to you and attach Schedules 2 and 3 (Form 1040), if
| applicable. Don't fill in Form 1040 or 1040-SR, lines 22, 24,
| 33, or 34 through 38. Don't fill in Schedule 2 (Form 1040),
| line 1 or 3. Also, don't complete Schedule 3 (Form 1040), line
| 6d, if you are completing Schedule R (Form 1040), or Form 1040
| or 1040-SR, line 27, if you want the IRS to figure the credits
| shown on those lines.
|
| https://www.irs.gov/publications/p17#en_US_2022_publink10001...
|
| Also, it comes with several limitations.
|
| > When the IRS cannot figure your tax. The IRS can't figure
| your tax for you if any of the following apply.
|
| > You want your refund directly deposited into your checking or
| savings account ...
|
| https://www.irs.gov/publications/p17#en_US_2022_publink10001...
| nonethewiser wrote:
| Controversial take for all of you:
|
| US taxes arent complicated because of tax software lobbiests. In
| fact they are already very simple if you actually value
| simplicity. But people dont - they value paying the least in
| taxes as possible (as they should).
|
| You can dumbly supply a small amount of information and be in
| complete compliance with the law. Virtually all complexity comes
| from proving ways in which you don't owe taxes and calculating
| how much. Thus, reducing complexity necessarily increases taxes
| for most cases. That means reducing complexity will always have
| lots of normal people rationally opposing it.
|
| Tax complexity reductions need to be accompanied by tax cuts
| across the board.
| tristor wrote:
| Unfortunately your take is wrong, rather than controversial.
|
| I do my taxes every year, sometimes long-form, sometimes with
| software like TurboTax. The complexity of my taxes is entirely
| the fault of the way in which I am required to provide
| information to the IRS, most of which they already know, even
| though I take the standard deduction and don't do any "tricks".
| A simply example is if you have any sort of stocks/bonds or
| other tradeable asset holdings. Reporting this is a massive
| pain in the ass, because despite the fact that
| Schwab/Etrade/et-al already report this to the IRS, they make
| you list the cost basis, date of purchase, and sale price of
| every transaction that occurred within the tax year as part of
| calculating whether or not you're eligible for long-term
| capital gains or are taxed at your marginal income tax rate
| (short term capital gains). Very closely related is
| transactions dealing with RSUs, which every tech worker (most
| of HN) has to deal with. This is despite the fact I work a
| relatively normal white collar job on a W-2 and don't even file
| a base 1099 on a yearly basis.
|
| Taxes are complicated in the US because our tax code is bonkers
| and we're forced to precisely input a whole lot of spreadsheet
| bullshit that the IRS already knows so they can auto-check our
| work against their database rather than just telling me I owe
| them an extra $2k because despite having maximum withholding,
| the government wants to fuck me a little deeper in the ass.
| Exactly none of this is optional, I am /obligated/ to report
| all of this complexity, whether I paid enough or not, or I am
| legally penalized.
|
| Taxes /could/ be simple, but they are not, for anyone who makes
| more than about $60k/yr, which is nearly half the country.
|
| > You can dumbly supply a small amount of information and be in
| complete compliance with the law.
|
| This is not only factually untrue, anyone who follows this
| advice is putting themselves in significant legal jeopardy.
| miki123211 wrote:
| Don't tax authorities have an incentive to minimize tax returns
| and maximize taxes paid? Just like in for-profit companies,
| there's a temptation to employ dark patterns here.
|
| These systems have been developed in other countries and I don't
| think this problem exists, even though it intuitively should.
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