IRS Tried to Hide Emails That Show Tax Industry Influence over Free File Program(propublica.org)
propublica.org
IRS Tried to Hide Emails That Show Tax Industry Influence over Free File Program
https://www.propublica.org/article/the-irs-tried-to-hide-emails-that-show-tax-industry-influence-over-free-file-program#169990
198 comments
> The only people who are experts in a particular industry are the people running the businesses that make up that industry. So the government, in order to try to make rules that don't suck, depend on their input when drafting the rules.
That was not always the case. Once upon a time, there was the Office of Technology Assessment[0]. As to why it is no more, one need look no further than Newt Gingrich[1][2]:
> OTA was abolished (technically "de-funded") in the "Contract with America" period of Newt Gingrich's Republican ascendancy in Congress. According to Science magazine, "some Republican lawmakers came to view [the OTA] as duplicative, wasteful, and biased against their party."[0]
0 - https://en.wikipedia.org/wiki/Office_of_Technology_Assessmen...
1 - https://www.theatlantic.com/technology/archive/2012/10/the-m...
2 - https://economix.blogs.nytimes.com/2011/11/29/gingrich-and-t...
That was not always the case. Once upon a time, there was the Office of Technology Assessment[0]. As to why it is no more, one need look no further than Newt Gingrich[1][2]:
> OTA was abolished (technically "de-funded") in the "Contract with America" period of Newt Gingrich's Republican ascendancy in Congress. According to Science magazine, "some Republican lawmakers came to view [the OTA] as duplicative, wasteful, and biased against their party."[0]
0 - https://en.wikipedia.org/wiki/Office_of_Technology_Assessmen...
1 - https://www.theatlantic.com/technology/archive/2012/10/the-m...
2 - https://economix.blogs.nytimes.com/2011/11/29/gingrich-and-t...
Correct. Warren proposes to reinstate it:
https://techcrunch.com/2019/09/27/to-curb-lobbying-power-eli...
OTA isn’t a panacea though. You have to figure out ways to make it financially reasonable for people to blow the whistle on massive firms. The Waste, Fraud and Abuse laws might be a good template.
https://techcrunch.com/2019/09/27/to-curb-lobbying-power-eli...
OTA isn’t a panacea though. You have to figure out ways to make it financially reasonable for people to blow the whistle on massive firms. The Waste, Fraud and Abuse laws might be a good template.
Not the only presidential candidate for it. Not sure if Bernie is for it but I think he’s mostly reasonable and would be for it
https://www.yang2020.com/policies/reviveota/
https://www.yang2020.com/policies/reviveota/
The OTA didn’t solve the problem at hand. A separate office with even less expertise than the one regulating the industry is not in a position to suggest sane regulations.
What could the OTA bring to the table when it came to regulating something like mines that the EPA/DEQ wouldn’t have?
What could the OTA bring to the table when it came to regulating something like mines that the EPA/DEQ wouldn’t have?
If OTA didn't solve the problem at hand, the solution might be to improve it, rather than abolish it.
One does not need to have more expertise to come up with some sane regulations, i.e. you can't dump trash in the river, a tax filing co. can't lobby for tax legislation.
One does not need to have more expertise to come up with some sane regulations, i.e. you can't dump trash in the river, a tax filing co. can't lobby for tax legislation.
Improve it how?
The tax filing co isn't the one going to congress, they hire some PR company that does lobbying to talk to congressmen about tax law. Of course, that PR company just so happens to hire people from tax filing co because they know the industry. With OTA, the PR company goes to OTA to talk about tax law, it's just adding a different step to the process.
The tax filing co isn't the one going to congress, they hire some PR company that does lobbying to talk to congressmen about tax law. Of course, that PR company just so happens to hire people from tax filing co because they know the industry. With OTA, the PR company goes to OTA to talk about tax law, it's just adding a different step to the process.
Maybe the contacts the congressman is allowed to have should be controlled. Why would he ever need to be in touch with a PR firm? PR is the word Bernays invented to avoid using the word propaganda. Why would it be controversial to limit propaganda?
If one does not need expertise then it seems like the OTA would be pointless wouldn’t it? Their purpose was to add expertise but they were technological generalists with a political focus rather than apolitical experts so it’s not clear to me that they added any unique value despite being appealing as a concept.
What is wrong with being a generalist? If general perspective weren't important then the military wouldn't have general officers.
A separate office could have less expertise but a broader perspective, and be less interested in suggesting regulations (although broad experience might give it extra heft in articulating regulatory principles) than in pointing out both ineffective regulations and attempts to undermine effective ones.
Think of the OTA as connective tissue connecting the different regulatory specialties if you prefer.
Think of the OTA as connective tissue connecting the different regulatory specialties if you prefer.
What makes you feel the OTA wouldn't similarly fall victim to cronyism and lobbying? Soon enough your head of OTA would just be another corporate flunky like any other agency.
This is a result of structural issues with our government, it's not as if adding yet another office will magically change that fact.
This is a result of structural issues with our government, it's not as if adding yet another office will magically change that fact.
It depends on the mandate provided to the agency.
Regulators at the federal level have be de-fanged because of the increasing reactionary forces controlling pursestrings in Congress. It became obvious with OSHA and now even the FAA is a wimp in the face of pressure from Boeing. That's part of a strategy by certain people who want to erode trust in government.
It's possible to structure things in a way that limits politicalization.
Regulators at the federal level have be de-fanged because of the increasing reactionary forces controlling pursestrings in Congress. It became obvious with OSHA and now even the FAA is a wimp in the face of pressure from Boeing. That's part of a strategy by certain people who want to erode trust in government.
It's possible to structure things in a way that limits politicalization.
Part of it's the result of extreme centralization and integration of industry, too. If no individual companies work across the entire scope of what a given agency or department regulates, and if there are many such companies rather than just a few, it's harder to draw a straight line between a given regulation and direct benefit to every single one of your potential employers when you rotate back out into the private sector. Would still happen, but it'd be harder to get a small group of industry insiders to agree on how regulation should look, easing regulatory capture at least a bit, and maybe a lot.
There’s always a whole lot of idealism when people call for regulations as a panacea.
Then you end up with companies like Boeing who are the only players in the country and no one even tries to compete given the massive overhead and then people get surprised the one company who gets 99% of the oversight ends up having a say in the oversight.
This type of thing needs constant vigilance and churn to avoid capture. But at the end of the day it’s just going to come with the whole arrangement every once in a while.
Of course we could come up with ways to have this type of oversight which the market can’t practically account for financially or organizationally but again that’s wishful thinking as almost every situation like this has resulted in some level of capture.
Pretty much the only option is hoping they actually attempt to fix processes when it goes wrong, at least for the next while. But more often than not rules get rushed in during the panics which merely reinforces the company’s monopoly by adding even more special rules only a billion dollar entrenched company with the decades of other specialized processes they themselves helped establish through lobbying.
No one wants to remove regulations for the sake of competition but I think we need to be more realistic about the monsters we’re creating in exchange for worse monsters.
Instead of being surprised every time the fragility of the whole system gets exposed at least once a decade. While perpetually hoping and expecting for better oversight for the next time it.
Then you end up with companies like Boeing who are the only players in the country and no one even tries to compete given the massive overhead and then people get surprised the one company who gets 99% of the oversight ends up having a say in the oversight.
This type of thing needs constant vigilance and churn to avoid capture. But at the end of the day it’s just going to come with the whole arrangement every once in a while.
Of course we could come up with ways to have this type of oversight which the market can’t practically account for financially or organizationally but again that’s wishful thinking as almost every situation like this has resulted in some level of capture.
Pretty much the only option is hoping they actually attempt to fix processes when it goes wrong, at least for the next while. But more often than not rules get rushed in during the panics which merely reinforces the company’s monopoly by adding even more special rules only a billion dollar entrenched company with the decades of other specialized processes they themselves helped establish through lobbying.
No one wants to remove regulations for the sake of competition but I think we need to be more realistic about the monsters we’re creating in exchange for worse monsters.
Instead of being surprised every time the fragility of the whole system gets exposed at least once a decade. While perpetually hoping and expecting for better oversight for the next time it.
> Then you end up with companies like Boeing who are the only players in the country and no one even tries to compete given the massive overhead and then people get surprised the one company who gets 99% of the oversight ends up having a say in the oversight.
Tangential, but I've read comments on HN saying that part of the reason is that Boeing, along with Lockheed, are strategic to the US and there are actually some regulations to keep them on life support with government money, so that when a serious war starts, they're still there to serve US military's needs.
Tangential, but I've read comments on HN saying that part of the reason is that Boeing, along with Lockheed, are strategic to the US and there are actually some regulations to keep them on life support with government money, so that when a serious war starts, they're still there to serve US military's needs.
> No one wants to remove regulations for the sake of competition
I suspect a lot of people actually do want to do this. In cases where all else is equal, I’d strictly prefer less regulation. Even where regulation has an epsilon positive impact, I would often prefer to not have that regulation.
I suspect a lot of people actually do want to do this. In cases where all else is equal, I’d strictly prefer less regulation. Even where regulation has an epsilon positive impact, I would often prefer to not have that regulation.
There are a lot of regulations that are more harmful than helpful. How many transit projects don't get seriously proposed because the cost of looking for endangered species (in a city that is already not conducive to wildlife) makes the costs too high - resulting in everybody driving at much higher environmental cost but not study needed for that.
I don't have answers, but the problem is real.
I don't have answers, but the problem is real.
ESA section 7 assessments are insanely cheap, especially in cities. Maybe hire a different consulting firm. We would walk up and down the road, if it was completely urban and there is no habitat for the species you literally don't even need to look. The people who do the checking get paid about $20/hr. Sounds like someone is lying to you about why projects aren't being funded.
American transit costs are very high by international standards. People like to blame EIS or regulations or unions, but Europe has all of those things too and is much cheaper than the US. We just suck:
https://www.citylab.com/transportation/2018/01/why-its-so-ex...
https://www.citylab.com/transportation/2018/01/why-its-so-ex...
I agree fully. The regulation I pointed out was one example, of why things go wrong, but there is something more that I don't know going on.
[deleted]
> There’s always a whole lot of idealism when people call for regulations as a panacea.
Literally no one ever calls for regulations "as a panacea."
Literally no one ever calls for regulations "as a panacea."
Calling it that and rabidly using it like a hammer every time the smallest problems happen, regardless of long term side effects which prevent bad behaviour from being replaced by better companies, is not much different... at all.
> rabidly using it like a hammer every time the smallest problems happen
A straw man... with rabies!
A straw man... with rabies!
That sentiment applies a lot in banking. See eg https://www.alt-m.org/2015/07/29/there-was-no-place-like-can...
I'd have thought the government would need to maintain some expertise in the "industry" of collecting taxes, at least. When I file a tax return in Australia, I do it via a government website.
A major complication is that here in the US we have local (city/county), state, and national taxes, all of which can vary by location.
The way India handles that is by having a progressive income tax that is collected at the federal level and sales taxes at both the federal and local level (CGST and SGST). Apart from federal funding of states, they also get all the SGST taxes and are free to set their rates for fuel, road taxes etc. Having multiple levels of income tax is always painful.
Also, the government provides free java/excel based tax filing systems with a certain level of sanity checking.
Apart from this there are several fremium sites like cleartax to help file taxes but they don't get to lobby.
(yes, corruption is inherent and tax evasion is rampant, but at least filing taxes aren't as painful as US tax filing seems to be)
Also, the government provides free java/excel based tax filing systems with a certain level of sanity checking.
Apart from this there are several fremium sites like cleartax to help file taxes but they don't get to lobby.
(yes, corruption is inherent and tax evasion is rampant, but at least filing taxes aren't as painful as US tax filing seems to be)
To nitick, employees don't need to use Java on the web to file taxes. IIRC there is also XML so other software may generate it.
This isn't a reason that the feds couldn't do it, though. (The federal government only deals with one kind of taxes: federal taxes).
It's only an argument that the state and local governments would need their own, parallel systems if they wanted to participate.
It's only an argument that the state and local governments would need their own, parallel systems if they wanted to participate.
The Federal government does have an online system to file your taxes for free.
https://www.irs.gov/filing/free-file-do-your-federal-taxes-f...
https://www.irs.gov/filing/free-file-do-your-federal-taxes-f...
[deleted]
But if you're in a certain income segment, you can plug it all in online. The tools are there and the all the mentioned governments need to verify. It would be easier for them to send me the numbers and I can dispute if I disagree (or want to itemize)
"The only people who are experts in a particular industry are the people running the businesses that make up that industry."
Funny. Yes. I worked at a consulting firm doing permitting for California (wetland delineations etc). The only way to get something approved was to use a former gov employee. They could write a proposal "correctly", attach the correct docs, etc. Gov employees knew the cash wasn't in their position, but, in consulting later on. Tin foil hat on: I also think, the Gov employees knew when a proposal wasn't from a former Gov employee -- and would reject -- thus keeping the cycle going.
Funny. Yes. I worked at a consulting firm doing permitting for California (wetland delineations etc). The only way to get something approved was to use a former gov employee. They could write a proposal "correctly", attach the correct docs, etc. Gov employees knew the cash wasn't in their position, but, in consulting later on. Tin foil hat on: I also think, the Gov employees knew when a proposal wasn't from a former Gov employee -- and would reject -- thus keeping the cycle going.
This is 100% opposite my experience in wetland water quality permits. Sorry your state has super corrupt army corps districts. Ours (NC) let's all kind of stuff slide, but we still do thorough work that meets all applicable regulations even when the assessor insists they don't need the entire NRTR.
I'm in the northeast and my state is exactly like CA in this regard (source: good chunk of immediate and extended family works for the state). I've lived in three other states too and they weren't like that but they were all rural enough where people didn't really need government permission to do what they wanted and the political will to go after reasonable people doing reasonable things but without government approval wasn't there.
Everywhere I've ever lived I've seen a pretty wide variation from place to place within a state that seems to get applied on top of the state's baseline. In the poorer areas anything reasonable pretty much gets waved on through and in the rich areas they're much more controlling (because they have the resources to throw at it) and you can benefit from hiring people who know people or are at least known as "regulars" to whatever official is calling the shots. It's a lot like hiring a traffic lawyer.
Everywhere I've ever lived I've seen a pretty wide variation from place to place within a state that seems to get applied on top of the state's baseline. In the poorer areas anything reasonable pretty much gets waved on through and in the rich areas they're much more controlling (because they have the resources to throw at it) and you can benefit from hiring people who know people or are at least known as "regulars" to whatever official is calling the shots. It's a lot like hiring a traffic lawyer.
I've seen similar situations in Canada:
- In Nova Scotia, an acquaintance food & safety inspector became a consultant to industry on how to navigate the arcane laws of food & safety. There was no fraud or wonkiness there that I could easily perceive - the companies wanted to do the right thing; knew they were not experts in what the right thing is; so hired a person they were confident knew what the right thing is.
- Though we had our own bright security analysts in the company I worked for, when dealing with the public sector we have been heavily advised, and learned the wisdom of, hiring from a pool of rotating local security analysts that knew how to write documents, architecture, assessment in a way that would clearly conform to regulations. Again, not due to any wonkiness - our security analysts who knew the product worked with security analysts who knew the rules, to make sure solution is amenable to all.
- In Nova Scotia, an acquaintance food & safety inspector became a consultant to industry on how to navigate the arcane laws of food & safety. There was no fraud or wonkiness there that I could easily perceive - the companies wanted to do the right thing; knew they were not experts in what the right thing is; so hired a person they were confident knew what the right thing is.
- Though we had our own bright security analysts in the company I worked for, when dealing with the public sector we have been heavily advised, and learned the wisdom of, hiring from a pool of rotating local security analysts that knew how to write documents, architecture, assessment in a way that would clearly conform to regulations. Again, not due to any wonkiness - our security analysts who knew the product worked with security analysts who knew the rules, to make sure solution is amenable to all.
Its certainly the norm for industry leaders to lobby and even propose draft rules/legislation to regulators/legislators...however, it is not normal for the government to willfully hide communications from the industry to government (which was done by the IRS in response to a FOIA request) and its outright illegal for the government to pay/reimburse the lobbyists themselves which the IRS seemed to do here. That's right your tax payer dollars were used to pay for lobbyists travel expenses to lobby the IRS to the detriment of taxpayers.
It's common but if you look around the world the level of regulatory capture in the US is in no way normal.
Blame the combination of a terrible voting system and relatively few representatives compared to the incredible prize of a slice of America's giant economy.
But reform is possible, effectively regulated competitive markets exist, other countries manage it. America can too if you're willing to work to make it happen.
Blame the combination of a terrible voting system and relatively few representatives compared to the incredible prize of a slice of America's giant economy.
But reform is possible, effectively regulated competitive markets exist, other countries manage it. America can too if you're willing to work to make it happen.
I'm sorry but is your argument here that the IRS doesn't have experts in tax law?
No, the argument is that those IRS experts in tax law switch jobs between writing the regulations for the IRS, and then doing "various tasks" for the private companies that work in tax, including lobbying congress for more complex tax laws thus ensuring more people have to use the private tax companies to get their taxes right as opposed to taxes being simple enough to understand without needing help.
While you could lobby congress yourself, odds are you don't really understand tax law in detail well enough to be effective, while they do.
While you could lobby congress yourself, odds are you don't really understand tax law in detail well enough to be effective, while they do.
Thanks for clarifying your argument. I disagree though that lack of understanding is what prevents people from lobbying congress themselves. People and even organizations in favor of simplifying the law cannot compete with, eg. intuit's 2.5 million $ lobbying spend in 2018. Why should individual people have to lobby their congress in a democratic system anyway? If you look at polling data on this subject it will show a majority of Americans in favor of tax code simplification. Yet in the past few years we've actually received the opposite.
Everybody is in favor of simplification until it eliminates the complex part that benefits them. Eliminating the mortgage interest deduction harms a lot of people because their taxes go up significantly. (the latest tax reform pushed the standard deduction high enough that most people don't gain anything by deducting their interest - maybe in a few years nobody will care anymore and this can be eliminated)
People want simplified taxes, but they write letters and vote when their taxes go up, so more complex taxes are rewarded despite that want.
People want simplified taxes, but they write letters and vote when their taxes go up, so more complex taxes are rewarded despite that want.
There are ways to fight this. Controls on corruption (aka lobbying) and removing the revolving door between industry and government would help greatly.
I know I may catch shit for this but lobbying is not synonymous with corruption. Lobbying, lobbying groups and lobbyists actually serve a very valuable role in the interface between the government and the people their rules impact. Like every endeavor, bad actors can give the whole system a negative stereotype but judging anything by its worst examples is not a reasonable way to assess that thing. And no, I’m not in anyway a lobbyist or associated with that industry.
Lobbying is not the problem, money changing hands is. In its current form, lobbying works through campaign contributions (and potentially other favors). These are not “worst examples”, it’s standard practice. Why do you think a politician would listen to someone representing Comcast’s interests? Prohibit campaign contributions and you will have politicians listen to what regular people want a lot more.
Politicians listen to lobbyists because it is impossible for a human to understand all laws they pass. I'm in favor of things like the "read the bills act", but the only thing they really do is allow time for groups interested in the law to read the final text and mobilize their members to write vote X on the bill letters.
Sure I can read one bill and understand the details, but it would take more months than there are in a session (2 years) to UNDERSTAND all the bills congress passes. If I were a lawyer I could understand them a little faster, but not enough to make a difference.
The result is congress needs trusted experts to write the laws for them. Very few people are experts in anything useful that they are not paid for. (the exceptions are things like movie watcher - which congress is already as much an expert as everyone else)
Sure I can read one bill and understand the details, but it would take more months than there are in a session (2 years) to UNDERSTAND all the bills congress passes. If I were a lawyer I could understand them a little faster, but not enough to make a difference.
The result is congress needs trusted experts to write the laws for them. Very few people are experts in anything useful that they are not paid for. (the exceptions are things like movie watcher - which congress is already as much an expert as everyone else)
[deleted]
Compare and contrast https://slatestarcodex.com/2019/09/18/too-much-dark-money-in...
It's giving groups with money outsized influence, undermining the democratic process. It's corruption.
> lobbying is not synonymous with corruption
No, but I'd wager is just as often as not
No, but I'd wager is just as often as not
Our best and brightest don't go into government because the government does not offer competitive compensation.
But compensation is not the only motivator. And in a more equitable society (eg one where illness doesn't threaten total financial ruin), it would be less important.
Are you saying our "best and brightest" are too greedy to [want to] govern [well]? That seems self-contradictory to me.
I worked in a government job that demanded strong technical expertise. We got two kinds of people: those who knew they could make a lot more money in the private sector but took the civilian job out of a sense of duty or a desire for stability, and those who weren't smart enough for the private sector and knew they could get away with half-assing it in the government. The problem was that people with valuable skills and expertise got lumped in with the paper pushers at the DMV every time a politician lined up to kick the "overpaid government workers" football, so Congress wouldn't let them pay industry rates. Result: the "best and brightest" took advantage of lucrative programs like student debt forgiveness, got some good experience on their resume, then left for industry and literally doubled or tripled their salaries overnight.
You are putting words into my mouth.
Plenty of individuals pursue high-paying jobs because the financial security it provides their family [including children, spouse, and possibly infirm parents]; and to pay back the student loan burden that the American institution levies on their best and brightest.
Plenty of individuals pursue high-paying jobs because the financial security it provides their family [including children, spouse, and possibly infirm parents]; and to pay back the student loan burden that the American institution levies on their best and brightest.
> The only people who are experts in a particular industry are the people running the businesses that make up that industry. So the government, in order to try to make rules that don't suck, depend on their input when drafting the rules.
A government, for the people, should ask the users and customers of the corporations, its citizens who suffer the most from top-down decisions.
What recourse do average citizens have when corporations, which must always act in their own interest, decide to prey on them? Governments are supposed to protect us from that shit.
It should be a triangle: People choose which corporations to support, governments make sure people have a choice.
A government, for the people, should ask the users and customers of the corporations, its citizens who suffer the most from top-down decisions.
What recourse do average citizens have when corporations, which must always act in their own interest, decide to prey on them? Governments are supposed to protect us from that shit.
It should be a triangle: People choose which corporations to support, governments make sure people have a choice.
Even when we accept the issue per se, there remains the problem of trying to hide it. Why was the FOIA request originally denied?
> This is normal.
Whoa there. It may happen, it may even be common, but it’s certainly not expected or ok.
There’s also a huge difference between the regulatory capture of businesses like oil, airlines and banking that pose danger so the government regulates them, and this situation where the IRS apparently decided it was more expedient to essentially give these companies a business rather than write software that would implement their own regulations.
So, it’s a very different situation.
In fact you’ve got to wonder what the IRS is thinking. They should be holding all the cards. But they act like the Intuit has them over a barrel. The IRS gave them a business under certain conditions. Intuit has failed to meet the terms of the agreement. So, start writing the software and terminate the agreement once its ready.
Whoa there. It may happen, it may even be common, but it’s certainly not expected or ok.
There’s also a huge difference between the regulatory capture of businesses like oil, airlines and banking that pose danger so the government regulates them, and this situation where the IRS apparently decided it was more expedient to essentially give these companies a business rather than write software that would implement their own regulations.
So, it’s a very different situation.
In fact you’ve got to wonder what the IRS is thinking. They should be holding all the cards. But they act like the Intuit has them over a barrel. The IRS gave them a business under certain conditions. Intuit has failed to meet the terms of the agreement. So, start writing the software and terminate the agreement once its ready.
This sounds like a great application for all of those professors who know a lot but never go to the industry.
The only people who are experts in a particular industry are the people running the businesses that make up that industry.
False premise. Most experts on/in a given field are employed within it, but employment/economic interest is by no means a prerequisite for expertise. Regulatory capture is a real thing, but it's fallacious to argue that because regulatory capture exists, governance is the problem. After all, markets are just as easily captured as governments, and businesses are open in their pursuit of market share and monopoly.
False premise. Most experts on/in a given field are employed within it, but employment/economic interest is by no means a prerequisite for expertise. Regulatory capture is a real thing, but it's fallacious to argue that because regulatory capture exists, governance is the problem. After all, markets are just as easily captured as governments, and businesses are open in their pursuit of market share and monopoly.
I agree with you for 99% of businesses, except this is the exact situation where your argument doesn't apply.
The IRS should know a thing or two about filing taxes, should they not?
The IRS should know a thing or two about filing taxes, should they not?
Isn't that the problem though? That we call this normal. It's definitely not the case on other democracies around the world.
Why is it the default that everyone files their taxes? How long does that take, on average?
Here's how it could work, based on a real-world example from another country:
Before each tax season begins, the IRS sends each taxpayer an estimate of how much they are expected to earn that year, based on previous years. They are assigned a tax bracket based on this estimate. If they think the estimate is wrong, they send back a new number and their tax bracket is adjusted accordingly. The taxpayer can also give estimates of their deductions at this point, for a more accurate estimate of the tax bracket.
Employees withhold taxes from wages before payment, based on the tax bracket each employee is in. They report the wages paid and pay the IRS the withheld amount.
Investment funds etc. are required to report gains and losses for each of their clients to the IRS.
At the end of the year, the IRS sums up the income they know about from these reports, compare the sum due to the sum already paid from withheld taxes and send the taxpayer a summary. If the taxpayer has no other income to report, and has no complaints about the data the IRS already has, they don't need to file anything further. The report comes with a bill for taxes remaining, or if too much has been paid, a summary of how much will be returned.
For the majority of taxpayers, that is, those whose source of income is wages from employment or government benefits, all this takes maybe 10 minutes a year to handle. Some people still need to file, but they're a minority.
Here's how it could work, based on a real-world example from another country:
Before each tax season begins, the IRS sends each taxpayer an estimate of how much they are expected to earn that year, based on previous years. They are assigned a tax bracket based on this estimate. If they think the estimate is wrong, they send back a new number and their tax bracket is adjusted accordingly. The taxpayer can also give estimates of their deductions at this point, for a more accurate estimate of the tax bracket.
Employees withhold taxes from wages before payment, based on the tax bracket each employee is in. They report the wages paid and pay the IRS the withheld amount.
Investment funds etc. are required to report gains and losses for each of their clients to the IRS.
At the end of the year, the IRS sums up the income they know about from these reports, compare the sum due to the sum already paid from withheld taxes and send the taxpayer a summary. If the taxpayer has no other income to report, and has no complaints about the data the IRS already has, they don't need to file anything further. The report comes with a bill for taxes remaining, or if too much has been paid, a summary of how much will be returned.
For the majority of taxpayers, that is, those whose source of income is wages from employment or government benefits, all this takes maybe 10 minutes a year to handle. Some people still need to file, but they're a minority.
Because companies like H&R block and TurboTax make a lot of money on it. For most people their taxes really are simple enough for what you say to work and be cheaper for everybody. In fact the IRS already has all the numbers for most people to do that, or if they don't you have an accountant to handle your finances anyway who can quickly give the IRS those numbers. However by making you enter all the numbers and calculate things it gives the third parties a reason to exist.
I used to do my taxes by hand: it was actually faster than the online system I use now - mostly because it was a lot quickly to skip the section dealing with rail road retirees and such. I quit doing it only because one time I missed copying line 13 of form 1234 to line 47b or form 5678 and got the wrong numbers. A simple mistake that the IRS caught right away, but then I had to go refile my state taxes which depended on the wrong numbers: that was painful enough I quit doing it by hand. (why the state didn't also catch the mistake and avoid the whole refile garbage I don't know)
I used to do my taxes by hand: it was actually faster than the online system I use now - mostly because it was a lot quickly to skip the section dealing with rail road retirees and such. I quit doing it only because one time I missed copying line 13 of form 1234 to line 47b or form 5678 and got the wrong numbers. A simple mistake that the IRS caught right away, but then I had to go refile my state taxes which depended on the wrong numbers: that was painful enough I quit doing it by hand. (why the state didn't also catch the mistake and avoid the whole refile garbage I don't know)
In the UK waged and salaried employees need to do nothing.
The UK system is very smooth as a small business owner.
When an employee leaves a job they are given a P45 form to hand to the new employer, which contains a summary of any pay to date for the current tax year along with a tax code.
All I have to do when hiring is enter this information into the accounting software and everything just works. National Insurance, Pensions and Student Loans are calculated monthly and taken via Direct Debit, as are VAT payments and returns. Employees are automatically emailed payslips with breakdowns of their pay and deductions.
Any relevant information is submitted to HMRC (the UK's IRS) by the accounting software, so it takes me ~10 mins a month to complete payroll for 5 employees. When an employee leaves, creating a P45 for the next employer takes a single click.
The gov.uk website is exceptionally well organised and contains detailed lists of everything an employer or employee needs to do at all stages in the process.
The US self-assessment system seems opaque, inefficient and ripe for abuse in comparison. It also places the stress of reporting taxes onto every individual rather than just the employers.
When an employee leaves a job they are given a P45 form to hand to the new employer, which contains a summary of any pay to date for the current tax year along with a tax code.
All I have to do when hiring is enter this information into the accounting software and everything just works. National Insurance, Pensions and Student Loans are calculated monthly and taken via Direct Debit, as are VAT payments and returns. Employees are automatically emailed payslips with breakdowns of their pay and deductions.
Any relevant information is submitted to HMRC (the UK's IRS) by the accounting software, so it takes me ~10 mins a month to complete payroll for 5 employees. When an employee leaves, creating a P45 for the next employer takes a single click.
The gov.uk website is exceptionally well organised and contains detailed lists of everything an employer or employee needs to do at all stages in the process.
The US self-assessment system seems opaque, inefficient and ripe for abuse in comparison. It also places the stress of reporting taxes onto every individual rather than just the employers.
As a fellow British small business owner I assume you're familiar with the UK's self-assessment scheme as well? I've always found it to be very quick and painless, and unlike the US system there's no need to get an accountant or even any specialised software involved.
I was really surprised how easy it was, it takes maybe 10 mins if you have the information and logins to hand.
Honestly I can't think of many ways to improve the UK's online accounting process from either an employer or employee's standpoint because I already spend less than a day total per year on it.
Honestly I can't think of many ways to improve the UK's online accounting process from either an employer or employee's standpoint because I already spend less than a day total per year on it.
And in Germany. In Germany, if you are an employee and not a freelancer or self-employed, you don’t have to file taxes at all. You can of course, if you think your deductibles are higher than the deductibles that are automatically applied.
Same in the Netherlands. It takes me all of ten minutes each year to file taxes for my partner and myself, and most of that is spent authenticating in the provided webapp.
Not quite true - I'm salaried, but because I earn over a specific amount, and have children, I have to file a tax return. However, this is basically a matter of copying some numbers from one government website to another government website, and doesn't require any particular expertise, just about a hour or so of tedium.
Same in Sweden, and I'd imagine the rest of the Nordic countries. If not all of Western Europe.
And in Norway.
Not quite. I Norway you log in and check the numbers. In UK you do literally nothing at all.
You do not have to check the numbers in Norway, you can simply assume that Skattettaten has got it right and just let it go. After all if you check and see that everything is correct you do not do anything else, you do not confirm the correctness of the numbers, you just don't correct them. At least that's the way it was last time I did it, in April this year.
Same in Russia
Most of the rest of the developed world has the national tax agency compute the tax filing for you based your family ages, employer-filed work income and financial institution income. Then its merely a choice to accept or modify, taking as little as a few minutes. 3/4ths US tax returns would be that simple.
Most of the rest of the developed world has the national tax agency compute the tax filing for you based your family ages, employer-filed work income and financial institution income.
The annoying thing is that the U. S. does this, too. They just wait until the numbers don't match before they tell you what their number is. Hey, why don't you tell me that number up front and save us a lot of trouble? Because I just paid several thousands dollars recently because our numbers didn't match up. The IRS already knew, "here's your bill". A lot of back-and-forth could have been saved if the IRS said up front before I filed, "here's what we've got, just to give you a ballpark figure to work with and let you know if we're lining up, or have a problem."
The annoying thing is that the U. S. does this, too. They just wait until the numbers don't match before they tell you what their number is. Hey, why don't you tell me that number up front and save us a lot of trouble? Because I just paid several thousands dollars recently because our numbers didn't match up. The IRS already knew, "here's your bill". A lot of back-and-forth could have been saved if the IRS said up front before I filed, "here's what we've got, just to give you a ballpark figure to work with and let you know if we're lining up, or have a problem."
It is an actual political goal of the GOP to make filing taxes painful. The result is that there is built up resentment to the whole notion of raising taxes since it is associated with such an "inefficient" process.
In the UK, HMRC take my monthly pay and use it to estimate my annual salary, which is enough for almost everyone. If you get a bonus, you can fill in a field online that says "no this is what I think my income is", and it goes away. At the end of the year, you get a statement of what HMRC thought your income was, and if that's right, you do nothing. If it's wrong, you file.
> The emails are striking for what they lack: no counterproposals or efforts by IRS officials to push for a better deal.
This alone should be grounds enough to fire everyone involved for incompetence, even if corruption can't be proven.
This alone should be grounds enough to fire everyone involved for incompetence, even if corruption can't be proven.
Given the way Congress treats the Post Office, I wouldn't take it for granted that the IRS has much choice in the matter.
I couldn’t agree more. If the TurboTax lobby has bought your vote what are you really going to do...
Votes are only for sale when voters don't care about the issue. Politicians don't want money - they want power, when voters don't really care money buys ads and the like which translates into votes. Then voters care though no amount of money can buy off a "wrong" vote and they get voted out - lose their power.
Government jobs don't work like the private sector. Furthermore, it's not at all clear from this sentence that it's incompetence or corruption in the first place. It could be that they e.g. felt they might get a worse deal if they tried to push for a better one.
Sounds like a whisleblower from the IRS needs to push for a false claims/Qui tam lawsuit.
You'd have to fire all the people in the top positions of the Federal government.
People want to eat yummy sausages, but they don't want to know how sausages are made.
This is how sausages are made if you define 'sausages' as 'market regulation'.
People want to eat yummy sausages, but they don't want to know how sausages are made.
This is how sausages are made if you define 'sausages' as 'market regulation'.
People tolerate bad inputs when the outputs are good. They ignore the sausage-making process specifically because they don't want to give up the yummy sausage.
But this particular sausage isn't yummy. It's gross, and the packaging is deceptively labeled, and it steals from veterans.
If I was being handed a yummy sausage, I might not want to ask many questions. But this one smells funky; so now I want to know what's in it, and what went wrong cooking it, and I'm even thinking I might want to get my sausages made by someone else from now on.
But this particular sausage isn't yummy. It's gross, and the packaging is deceptively labeled, and it steals from veterans.
If I was being handed a yummy sausage, I might not want to ask many questions. But this one smells funky; so now I want to know what's in it, and what went wrong cooking it, and I'm even thinking I might want to get my sausages made by someone else from now on.
To continue this analogy, the problem is that if you ignore how the yummy sausages are made you don't really know what is normal and what is off when you examine the process behind the rotten ones.
People naively think the problems will be obvious. The issue at the heart of the analogy, though, is that those same people would find what they define as problems with the process for making the yummy ones. Thus, the "problems" are not as obvious as they think.
People naively think the problems will be obvious. The issue at the heart of the analogy, though, is that those same people would find what they define as problems with the process for making the yummy ones. Thus, the "problems" are not as obvious as they think.
Huh, they're just following instructions from elected reps and the president, like they're required to by law.
https://www.propublica.org/article/how-the-irs-was-gutted
https://www.nbcnews.com/business/taxes/turbotax-h-r-block-sp...
I don't think anyone is directly paying the IRS officials or corrupting them, they're paying lobbyists and donating to political campaigns. Intuit spends a LOT on lobbying, 6.6 million just in 1 year or something like that.
If we fire everyone involved in the IRS, the new folks who go against the same political diktats will be fired by the President.
https://www.propublica.org/article/how-the-irs-was-gutted
https://www.nbcnews.com/business/taxes/turbotax-h-r-block-sp...
I don't think anyone is directly paying the IRS officials or corrupting them, they're paying lobbyists and donating to political campaigns. Intuit spends a LOT on lobbying, 6.6 million just in 1 year or something like that.
If we fire everyone involved in the IRS, the new folks who go against the same political diktats will be fired by the President.
The current administration is corrupt to the core, so if it looks bad it probably is bad.
It’s not just this administration. The Lois Lerner fiasco happened during the previous administration. I think the IRS has been corrupt for a long time without any help. Ken Corbin, the person in charge of this filing nonsense, is a 27 year employee of the IRS.
Every administration has its share of corruption. This one has it deeply embedded and comes from the very top. I welcome refutations from supporters of the current administration.
Let's be perfectly clear: there was no Lois Lerner fiasco. A massive number of 501(c)(4) organizations started forming with (typically right-leaning) political names, despite the fact that 501(c)(4) organizations aren't allowed to operate as PACs, because "the net earnings of which [must be] devoted exclusively to charitable, educational, or recreational purposes." 26 U.S.C. § 501(c)(4) available at https://www.law.cornell.edu/uscode/text/26/501.
This phenomenon was much more common among Tea Party groups and libertarians (many of whom fundamentally dispute the legitimacy of the tax code) than among paleoconservatives, neoconservatives, or any brand of liberal or progressive. See generally Jᴀɴᴇ Mᴀʏᴇʀ, Dᴀʀᴋ Mᴏɴᴇʏ: Tʜᴇ Hɪᴅᴅᴇɴ Hɪsᴛᴏʀʏ ᴏғ ᴛʜᴇ Bɪʟʟɪᴏɴᴀɪʀᴇs Bᴇʜɪɴᴅ ᴛʜᴇ Rɪsᴇ ᴏғ ᴛʜᴇ Rᴀᴅɪᴄᴀʟ Rɪɢʜᴛ (2016).
Having a 501(c)(4) with a political term like "Tea Party" in the name is per se probable cause for an investigation. The ability to spin that into some kind of partisan witch hunt was a major propaganda victory. This was conduct by principally one side of the political spectrum, and the IRS had no more an obligation to treat the parties equally than the ATF does when investigating Second Amendment fringe groups or the DEA does when investigating head shops or the FBI does when investigating eco-terrorism.
TLDR: If you don't want to be investigated for unlawfully using your non-profit for political purposes, maybe don't put political terms in the name of your non-profit.
This phenomenon was much more common among Tea Party groups and libertarians (many of whom fundamentally dispute the legitimacy of the tax code) than among paleoconservatives, neoconservatives, or any brand of liberal or progressive. See generally Jᴀɴᴇ Mᴀʏᴇʀ, Dᴀʀᴋ Mᴏɴᴇʏ: Tʜᴇ Hɪᴅᴅᴇɴ Hɪsᴛᴏʀʏ ᴏғ ᴛʜᴇ Bɪʟʟɪᴏɴᴀɪʀᴇs Bᴇʜɪɴᴅ ᴛʜᴇ Rɪsᴇ ᴏғ ᴛʜᴇ Rᴀᴅɪᴄᴀʟ Rɪɢʜᴛ (2016).
Having a 501(c)(4) with a political term like "Tea Party" in the name is per se probable cause for an investigation. The ability to spin that into some kind of partisan witch hunt was a major propaganda victory. This was conduct by principally one side of the political spectrum, and the IRS had no more an obligation to treat the parties equally than the ATF does when investigating Second Amendment fringe groups or the DEA does when investigating head shops or the FBI does when investigating eco-terrorism.
TLDR: If you don't want to be investigated for unlawfully using your non-profit for political purposes, maybe don't put political terms in the name of your non-profit.
> Having a 501(c)(4) with a political term like "Tea Party" in the name is per se probable cause for an investigation.
It is perhaps reasonable suspicion (at most) but I can’t see how it’s per-se probable cause.
Imagine a cause that you support instead. Would you want Alabama to be able to treat any charity with “Family Planning” or “Pride” in it standing alone to be probable cause for the authorities?
It is perhaps reasonable suspicion (at most) but I can’t see how it’s per-se probable cause.
Imagine a cause that you support instead. Would you want Alabama to be able to treat any charity with “Family Planning” or “Pride” in it standing alone to be probable cause for the authorities?
Is this a serious argument? It seems very obvious to me that "Tea Party" has very few (if any) other reasonable interpretations than a political party, while "Family Planning" and "Pride" have many possible non-political uses.
https://www.bostonteapartyship.com/
https://www.amazon.com/Set-Mini-Porcelain-Basket-Pink-Design...
Probable cause is a moderately high standard in law. One’s name alone should not make for probable cause.
https://www.amazon.com/Set-Mini-Porcelain-Basket-Pink-Design...
Probable cause is a moderately high standard in law. One’s name alone should not make for probable cause.
> the IRS had no more an obligation to treat the parties equally than the ATF does when investigating Second Amendment fringe groups or the DEA does when investigating head shops or the FBI does when investigating eco-terrorism
Oooh, that's a bingo!
Oooh, that's a bingo!
Then Lois Lerner shouldn’t have had any reason to plead the fifth repeatedly if she hadn’t done anything incriminating.
I'm sorry, but I think you must fundamentally misunderstand the right against self-incrimination if you believe that invoking it is, in and of itself, incriminating. Cf. "you don't need privacy if you have nothing to hide."
> Having a 501(c)(4) with a political term like
That’s the issue. Choosing which names are “political” is a political action in itself. How often were names investigated that mentioned “environment”, “social”, etc?
The Sierra club is extremely political and the name indicates nothing.
Unless these investigations were all equally applied to orgs regardless of name, your argument holds no water.
That’s the issue. Choosing which names are “political” is a political action in itself. How often were names investigated that mentioned “environment”, “social”, etc?
The Sierra club is extremely political and the name indicates nothing.
Unless these investigations were all equally applied to orgs regardless of name, your argument holds no water.
As this is greyed out, are people saying that IRS are being directly courted by tax companies and it's not due to government control?
Kind of a sidenote, but I'm continually surprised that agencies that get hit with an FOIA request are allowed to be the arbiters of whether the request should be granted or not.
Well, that's step one. If there's a disagreement, it can go to the courts.
> After ProPublica sued in federal court, the agency dropped that objection and released the records.
> After ProPublica sued in federal court, the agency dropped that objection and released the records.
But the burden of proof should be the other way around. The agency should have to be the one to go to court for a denial, rather than the burden lying on the citizen to sue to get the request granted.
That's unworkable. The vast majority of records of any given agency are non-releasable. The federal courts would be inundated and/or Congress would have to set up an entire system of administrative courts just to deal with the deluge of every divorcing spouse who wants to know the balance of his or her spouse's Thrift Savings Plan and every request for an internal phone roster or personnel disciplinary files. Your proposal would effectively gut the Privacy Act.
That's how you get legal DDoSing.
4chan would get a few thousand people to file requests for things like "all CIA agents deployed in Russia" and trigger a billion dollars in legal fees.
4chan would get a few thousand people to file requests for things like "all CIA agents deployed in Russia" and trigger a billion dollars in legal fees.
>“The notion that the Free File Alliance ‘dictated’ the terms ... to the IRS is absolutely false,” the spokesman said. “When IRS decides on any issue, the agency gets what it desires. No one dictates to IRS.”
So what does the IRS get out of this?
So what does the IRS get out of this?
Not having to do the hard work of making a usable tax filing system and providing phone support for users. Tax filing might be a 10x harder problem than health insurance signup, and healthcare.gov left a bad odor all around Washington.
A good theory for government is to always do the minimum -- do only the part that can only be done by the government and let private companies compete to do everything else. The IRS is doing roughly this, by providing the e-filing API. The surprising thing is that TurboTax has so few competitors.
A good theory for government is to always do the minimum -- do only the part that can only be done by the government and let private companies compete to do everything else. The IRS is doing roughly this, by providing the e-filing API. The surprising thing is that TurboTax has so few competitors.
Health care signup was fixed and now works well. I suppose your theory of government is great if the thought of companies like Intuit gouging private citizens to the tune of billion$ a year until the end of time gives you warm fuzzies. This canard that the government is congenitally incompetent and can never ever do anything as well as the sainted Private Sector needs to end.
Let's for a moment assume that the government sector is incompetent and couldn't build a workable software solution.
There's no reason they couldn't contract a private company to build the system, perhaps with a hand-over plan at the end of it with advice on how to build and manage a development team to maintain it in-house.
There are plenty of dev companies capable of doing this and doing it well. Put it up for tender.
There's no reason they couldn't contract a private company to build the system, perhaps with a hand-over plan at the end of it with advice on how to build and manage a development team to maintain it in-house.
There are plenty of dev companies capable of doing this and doing it well. Put it up for tender.
> Let's for a moment assume that the government sector is incompetent and couldn't build a workable software solution.
Why?
I mean, presenting a specious premise such as "the government sector is incompetent" ignores the fact that whatever private company which offers tax preparation must, by definition, interact with IRS systems.
Unless your premise is that one or more startups can replace federal tax collection.
Why?
I mean, presenting a specious premise such as "the government sector is incompetent" ignores the fact that whatever private company which offers tax preparation must, by definition, interact with IRS systems.
Unless your premise is that one or more startups can replace federal tax collection.
It's a rhetorical device: present an assumption favourable to the viewpoint you're arguing against and show that even with that assumption, the opposing view does not make sense.
I understand the rhetorical premise and retorted by identifying the logical flaw @Obversity presented thusly:
> There are plenty of dev companies capable of doing this and doing it well.
The position argued by both @Obversity and @tlb is that somehow "private companies" can satisfy what the IRS is required, by statute and Congressional oversight, to provide. "Private companies" are not subject to such constraints.
Hence my reductio ad absurdum conclusion of:
> Unless your premise is that one or more startups can replace federal tax collection.
> There are plenty of dev companies capable of doing this and doing it well.
The position argued by both @Obversity and @tlb is that somehow "private companies" can satisfy what the IRS is required, by statute and Congressional oversight, to provide. "Private companies" are not subject to such constraints.
Hence my reductio ad absurdum conclusion of:
> Unless your premise is that one or more startups can replace federal tax collection.
> Let's for a moment assume that the government sector is incompetent and couldn't build a workable software solution.
IMHO this implies they will also be unable to create a meaningful tender and evaluate the results.
The hardest part of writing this kind of software is not the coding, but getting all the details right.
IMHO this implies they will also be unable to create a meaningful tender and evaluate the results.
The hardest part of writing this kind of software is not the coding, but getting all the details right.
You could bolster your claim that it's a canard by linking to several other US government-built websites doing as complex a job as filing taxes that are convenient and easy to use.
I mean their free file fillable forms is fine. I have used it for a number of years now and it is perfectly functional. Everyone points to how easy the big wigs are but I found the only difference is some slightly nicer phrasing and making it harder to miss EIC and such.
If they automatically filled in the information they had and fleshed out the calculator bits (like not making you use a tax table by hand) it would be a fine tool.
If they automatically filled in the information they had and fleshed out the calculator bits (like not making you use a tax table by hand) it would be a fine tool.
the US digital "corps" (not sure what they're called) is widely regarded, helping the VA if not healthcare.gov directly. people are even giving up vaunted Private Sector jobs to join them.
i have a feeling, if not defeated by anti government types they could do the job.
i have a feeling, if not defeated by anti government types they could do the job.
> the US digital "corps" (not sure what they're called)
You're likely thinking of USDS (US Digital Services), or possibly 18f?
You're likely thinking of USDS (US Digital Services), or possibly 18f?
[deleted]
I certainly could -- but why should I hold myself to a higher standard of evidence than do you yourself? Also, you have moved the goalposts by now singling out the U.S. government.
Government sure did a great job here.
You really want to give them more power?
You really want to give them more power?
I'd take 100 Intuits compared to the gouging done by the government.
> This canard that the government is congenitally incompetent and can never ever do anything as well as the sainted Private Sector needs to end
It will end when it ceases to be true, and reliably so.
It will end when it ceases to be true, and reliably so.
It's explicitly designed and funded to be as such. The ENTIRE REST OF THE WORLD does these things, and here in the USA we claim the unique skill of an incompetent government that we somehow hold up to the rest of the world as a beacon of freedom and democracy. Does not compute.
I think the various indices of freedom (press freedom, human rights, etc) show convincingly that the U.S. is not a beacon, in any sense, of freedom. That freedom seems to be a stated goal of the founders in forming their government the way they did seems to be a mark of incompetence even in that regard.
My statement should not be construed to imply that Intuit handling it is morally superior (not only because of the incentive for corruption involved), even while the thought of using tax filing software written by government contractors makes me shudder.
My statement should not be construed to imply that Intuit handling it is morally superior (not only because of the incentive for corruption involved), even while the thought of using tax filing software written by government contractors makes me shudder.
It kind of depends on your definition of freedom. I'd say freedom of speech is stronger in the US than most of Europe. Europe has a lot of hate speech laws that limit freedom of speech more than in the US. Whether that's good or bad is subjective.
Freedom to own guns without many restrictions or permits is probably unique to the US.
Freedom to not have health insurance (mind you I prefer not having to worry about crushing medical debt in Germany, but it is a kind of freedom).
There's probably more than these 3,but for certain definitions of freedom the US is quite high.
You could say that Germany for example has a very different view of freedom. The government mandates that you get at least 4 weeks vacation, that you are insured at least half way properly, that you pay a lot more taxes for public goods (trains, roads, television, food subsidies, ...). This restricts the freedom of employers, your freedom to do with your money what you want, etc. but in return you have more freedom from debt traps, you have free time to go on vacation, you can get around the country without a car, etc.
So by limiting certain individual freedoms you can gain a different definition of freedom.
Freedom to own guns without many restrictions or permits is probably unique to the US.
Freedom to not have health insurance (mind you I prefer not having to worry about crushing medical debt in Germany, but it is a kind of freedom).
There's probably more than these 3,but for certain definitions of freedom the US is quite high.
You could say that Germany for example has a very different view of freedom. The government mandates that you get at least 4 weeks vacation, that you are insured at least half way properly, that you pay a lot more taxes for public goods (trains, roads, television, food subsidies, ...). This restricts the freedom of employers, your freedom to do with your money what you want, etc. but in return you have more freedom from debt traps, you have free time to go on vacation, you can get around the country without a car, etc.
So by limiting certain individual freedoms you can gain a different definition of freedom.
The fundamental questions then become "do the freedoms you want match the ones they give?" and "are you willing to give up the freedoms required?"
If you answer "yes" to both, then there's no issue and you're happy.
If you answer "no" to either (or both), it doesn't matter. You're still stuck with them.
Therefore, the real "freedom" you have is to agree with them. Everything else is decorative.
If you answer "yes" to both, then there's no issue and you're happy.
If you answer "no" to either (or both), it doesn't matter. You're still stuck with them.
Therefore, the real "freedom" you have is to agree with them. Everything else is decorative.
"You are free to do as we tell you!" --Bill Hicks
The private sector's profit margin, marketing budget, and executive compensation are incompetence that I, as a consumer of its services, pay for.
I've been working 16 hour days for a stretch here on a big project, so maybe this is just escaping me, but how is that different from stating that your savings account is incompetence?
Honest question.
Honest question.
My savings account doesn't come from me getting in between a citizen, and a vital-for-life service... Intuit's does, and they lobby aggressively to make everyone's lives harder, so that they can keep making millions from selling a glammed-up spreadsheet for $30/taxpayer.
> > So what does the IRS get out of this?
> Not having to do the hard work of making a usable tax filing system and providing phone support for users.
Since the IRS is the Single Point of Truth[0] for federal tax collection, by definition any commercial entity which offers tax preparation must conform to the IRS's tax filing system. Which, BTW, is used by millions of people via paper-based filings.
> A good theory for government is to always do the minimum -- do only the part that can only be done by the government and let private companies compete to do everything else.
While you may feel this to be a "good theory for government", many do not. Some consider a government's role to also include ensuring equitable treatment of all peoples within their domain.
> The IRS is doing roughly this, by providing the e-filing API. The surprising thing is that TurboTax has so few competitors.
TurboTax has many competitors[1]. Which may explain why they did their best to help write the rules (per the article):
> For a decade and a half, the IRS program to allow most Americans to file their taxes for free has been floundering.
> Now, IRS emails obtained by ProPublica help show why: The agency has allowed the tax preparation industry to write the rules.
0 - https://en.wikipedia.org/wiki/Single_source_of_truth
1 - https://www.bls.gov/ooh/business-and-financial/accountants-a...
> Not having to do the hard work of making a usable tax filing system and providing phone support for users.
Since the IRS is the Single Point of Truth[0] for federal tax collection, by definition any commercial entity which offers tax preparation must conform to the IRS's tax filing system. Which, BTW, is used by millions of people via paper-based filings.
> A good theory for government is to always do the minimum -- do only the part that can only be done by the government and let private companies compete to do everything else.
While you may feel this to be a "good theory for government", many do not. Some consider a government's role to also include ensuring equitable treatment of all peoples within their domain.
> The IRS is doing roughly this, by providing the e-filing API. The surprising thing is that TurboTax has so few competitors.
TurboTax has many competitors[1]. Which may explain why they did their best to help write the rules (per the article):
> For a decade and a half, the IRS program to allow most Americans to file their taxes for free has been floundering.
> Now, IRS emails obtained by ProPublica help show why: The agency has allowed the tax preparation industry to write the rules.
0 - https://en.wikipedia.org/wiki/Single_source_of_truth
1 - https://www.bls.gov/ooh/business-and-financial/accountants-a...
> Not having to do the hard work of making a usable tax filing system and providing phone support for users.
For 90% of Americans, the IRS could just snail-mail them a pre-filled tax form... That they could dispute, and file manually, if they disagreed with it.
For 90% of Americans, the IRS could just snail-mail them a pre-filled tax form... That they could dispute, and file manually, if they disagreed with it.
They basically already do your taxes anyway, which is why you get a bill in the mail if you screw up.
Not sure how true this is. I know of at least one very simple instance in which they missed a rather significant typo of wages straight from a W-2.
The IRS expects payment by Tax Day if you owe, no ifs, ands, or buts about it. This necessarily involves doing the work you’d do anyway, so why not just mail that info and allow you to return it with a box checked saying “I agree that this is correct”?
They can and should. That has nothing to do with my response to your claim that they currently notice obvious discrepancies.
Months after the tax was due.
Sure, given some structural changes to the filing system like pulling in the deadlines for business filings or pushing the expectation of settling tax bills beyond April 15.
USDS seems to have pretty good and competent people last I heard. If they were given the support they might be able to do something.
Intuit lobbies to keep tax filing over complicated. Look at other countries’ systems for examples of how it could be 100x simpler. Same thing for healthcare.
One has to wonder whether the only thing preventing our government from succeeding at providing simple and effective services for everyone is interference from radical capitalists.
One has to wonder whether the only thing preventing our government from succeeding at providing simple and effective services for everyone is interference from radical capitalists.
They get to eventually jump ship to go work in Intuit's lobbying arm.
https://en.wikipedia.org/wiki/Revolving_door_(politics)
https://en.wikipedia.org/wiki/Regulatory_capture
https://en.wikipedia.org/wiki/Revolving_door_(politics)
https://en.wikipedia.org/wiki/Regulatory_capture
> So what does the IRS get out of this?
The approval of elected politicians and appointed officeholders in the legislative and executive branches that are paid by—or plan to improve their post-government job prospects by service to—the members of the Free File Alliance.
The approval of elected politicians and appointed officeholders in the legislative and executive branches that are paid by—or plan to improve their post-government job prospects by service to—the members of the Free File Alliance.
Any FOIA experts here? I wonder why FOIAs aren't posted online for all to see and are instead just sent to the requestor? It seems lots of people are interested in the same information -- and once it's been vetted, putting all those (let's say) emails into one giant searchable database seems like it'd be in the public interest.
I'm sure there are both legal obstacles and practical ones. I'm just curious what those obstacles are.
I'm sure there are both legal obstacles and practical ones. I'm just curious what those obstacles are.
The solution is that you can create a transparency website and file FIOAs to get all the FIOAs and you can post them.
This isn't a "why didn't they" problem. It is a "how can I" problem.
This isn't a "why didn't they" problem. It is a "how can I" problem.
You're describing https://www.muckrock.com/
Even third world countries like South Africa can afford free online tax filing for the majority of taxpayers.
Totally agree, it seems crazy that my country of origin can figure out how to have a free online filing system and the US can't. Not sure how to characterise the problem, since corruption isn't a simple enough measure, we have tons of that in South Africa too. It's complicated I guess.
Also, please stop using outdated terms like "third world countries". The world hasn't been broken up into 2 different brackets of income for a long time. See https://www.gatesfoundation.org/Who-We-Are/Resources-and-Med...
Also, please stop using outdated terms like "third world countries". The world hasn't been broken up into 2 different brackets of income for a long time. See https://www.gatesfoundation.org/Who-We-Are/Resources-and-Med...
Ok, but how does comparing wildly different countries help in any way here?
I love the amount of servile placation for the corruption in the form of normalization that gets touted here... as if we haven't heard the "but congress needs expert input" a thousand times from K-street itself.
The strength of the lobby is purely attributable to the policial will that wants to allow that lobbying to be effective.
The main argument I heard against simplifying the tax code (and allowing automated free filing) is that it would eventually lead to a slow but steady increase in taxes. Another way of saying this is that: the "pain" of paying taxes makes people scrutinize the tax code and acts as a deterrent.
If you were to frame it in that context (and if that statement were indeed true), I am sure more people championing a simple tax code would stop doing so. I would rather pay $100 to Intuit's potentially unneeded service than $1000 as a tax increase.
I am not claiming that it is true - I don't have a way of testing this hypothesis - but it is something that is worth musing about. There are always unintended consequences.
The main argument I heard against simplifying the tax code (and allowing automated free filing) is that it would eventually lead to a slow but steady increase in taxes. Another way of saying this is that: the "pain" of paying taxes makes people scrutinize the tax code and acts as a deterrent.
If you were to frame it in that context (and if that statement were indeed true), I am sure more people championing a simple tax code would stop doing so. I would rather pay $100 to Intuit's potentially unneeded service than $1000 as a tax increase.
I am not claiming that it is true - I don't have a way of testing this hypothesis - but it is something that is worth musing about. There are always unintended consequences.
That is the entire Grover Norquist argument in a nutshell, and I call bullshit.
Most people are not involved enough in legislature to have any meaningful input into whether taxes will rise or not, so they are eating the complexity cost with no benefit.
Sure, people in general should be more involved in their government, bit that is a totally different issue.
I think it is more likely that people are confused by the currwnt tax laws and forms, so they aren't clear on what their tax obligations really are.
I think the issues that you mention were overly conflated.
People do not need to get "involved" into legislating beyond voting for someone representing them - and choosing the person they believe will do so.
People do most certainly are clear what their obligations end up being when they submit their tax return.
The question is only whether the process should be easier or is it better if it is tedious and ineffective. The question of whether Intuit also profits along the way is almost marginal here.
As much as I wish the world was logical, I came to believe it isn't - it is always full of unintended consequences.
People do not need to get "involved" into legislating beyond voting for someone representing them - and choosing the person they believe will do so.
People do most certainly are clear what their obligations end up being when they submit their tax return.
The question is only whether the process should be easier or is it better if it is tedious and ineffective. The question of whether Intuit also profits along the way is almost marginal here.
As much as I wish the world was logical, I came to believe it isn't - it is always full of unintended consequences.
The problem with this argument in general is that there might always be unintended consequences for any change. Hence one should never try to change anything.
In this case, the argument about rising taxes seems completely arbitrary. Why couldn’t I likewise argue that they would actually be lower (e.g., by closing loopholes)?
In this case, the argument about rising taxes seems completely arbitrary. Why couldn’t I likewise argue that they would actually be lower (e.g., by closing loopholes)?
Why couldn’t I likewise argue that they would actually be lower (e.g., by closing loopholes)?
Well for one, there is no incentive to lower taxes.
Loopholes have nothing to do with the ease of submitting a document. Loopholes exploit the various requirements of the law and play them out against each other.
Well for one, there is no incentive to lower taxes.
Loopholes have nothing to do with the ease of submitting a document. Loopholes exploit the various requirements of the law and play them out against each other.
I'm fairly optimistic that easier tax filing is just a matter of time. Several of the Democratic frontrunners have said they support it. I'm not sure what the Republican stance is but I doubt they would be against it either.
Spoiler: they are. The reason? Blatant corruption from Intuit and H$R Bloc
H&R is from Missouri, which is Republican dominated but Intuit is from Mountain View, CA. I think this is a bi-partisan problem.
Where giant multi-national corporations the size of Intuit or H&R set up HQs has less to do with their politics, and more to do with their bottom lines and the talent they are trying to aquire.
Intuit needs developers, UX/UI designers, entire tech infrastructure as they are a SaaS and Software Business. H&R Block is a franchising company with some enterprisey software (that's a lot more complicated to use than any of the TurboTax editions) that the tax preppers use.
A lot less tech goes into H&R Block than Intuit, so H&R Block can be in a lowish-noish tax state like Missouri or Kansas and take the decent developers that they have to maintain and update their backend tax-prep software.
Intuit needs developers, UX/UI designers, entire tech infrastructure as they are a SaaS and Software Business. H&R Block is a franchising company with some enterprisey software (that's a lot more complicated to use than any of the TurboTax editions) that the tax preppers use.
A lot less tech goes into H&R Block than Intuit, so H&R Block can be in a lowish-noish tax state like Missouri or Kansas and take the decent developers that they have to maintain and update their backend tax-prep software.
I understand that, my comment was more to my parent that was saying the problem was republicans and corruption. While I do think there is corruption involved; companies their politics and policies are made by people who work in the companies.
With Intuit being a company in an area that is overwhelmingly liberal, I would hazard that the majority of the people working there are as well(It is possible that the key positions are occupied by conservatives but over a period of years and consistently makes it less likely.).
With Intuit being a company in an area that is overwhelmingly liberal, I would hazard that the majority of the people working there are as well(It is possible that the key positions are occupied by conservatives but over a period of years and consistently makes it less likely.).
If instances of corruption like this are so public, why can't anything be done about them? If something can be done about them why isn't anything being done? If something is being done why is it so ineffective? If it's effective why are instances of corruption like this so public?
Intuit are simply corrupt thugs.
Intuit is going to try to do what benefits them. The IRS are the corrupt party in this transaction.
> Intuit is going to try to do what benefits them.
It is telling that you think this is even remotely similar to a justification. And in the case of bribery, both parties are at fault - the one giving, and the one receiving the bribe.
It is telling that you think this is even remotely similar to a justification. And in the case of bribery, both parties are at fault - the one giving, and the one receiving the bribe.
“I guess we just can’t do anything about corporate lobbying, the one problem that has existed since the beginning of time that is totally immutable and impossible to change.”
How does that excuse Intuit? They are still thugs, who are controlling IRS in this case. Corruption is still corruption, on both ends.
Intuit isn't the one with the guns. The people with the guns are always the thugs.
You don’t need guns when you have money. Money is a lot more effective than guns.
[deleted]
[deleted]
Why is the free file thing such a big deal? Considering the taxes paid, tax prep software is a tiny expense — and it’s deductible. How about complaining about a tax code that requires accountants and lawyers just to understand? Complaining about tax filing software is like complaining about a paint chip on the Titanic. The tax prep industry is a result of a ridiculously complicated tax code and the ridiculously complicated tax code is the result of politicians that reward or punish people as a means to garner more relevance. See Milton Friedman’s speech on tax code complications and the reasons behind it.
> Considering the taxes paid, tax prep software is a tiny expense — and it’s deductible.
It's only deductible if you itemize deductions, which most people don't do. And even then it isn't free. Your tax deduction only means that you don't have to pay taxes on the cost of your tax preparation service or software.
That said, I agree with you about everything else!
It's only deductible if you itemize deductions, which most people don't do. And even then it isn't free. Your tax deduction only means that you don't have to pay taxes on the cost of your tax preparation service or software.
That said, I agree with you about everything else!
And most importantly, it is not free in the sense that insurance fraud is not a victimless crime.
Any money shunted away from the state is money that the state will have to raise additionaly.
Any money shunted away from the state is money that the state will have to raise additionaly.
> Why is the free file thing such a big deal?
The answer to that question can be found in the article itself:
> This year, as part of our coverage of the IRS and TurboTax maker Intuit, we filed a request for correspondence between the IRS and the Free File Alliance, an industry group. The request sought records surrounding a public-private partnership called Free File.
> Under that program, which has long been championed by Intuit, the IRS agrees not to create its own tax filing system that would pose a threat to the industry’s profits.
HTH
The answer to that question can be found in the article itself:
> This year, as part of our coverage of the IRS and TurboTax maker Intuit, we filed a request for correspondence between the IRS and the Free File Alliance, an industry group. The request sought records surrounding a public-private partnership called Free File.
> Under that program, which has long been championed by Intuit, the IRS agrees not to create its own tax filing system that would pose a threat to the industry’s profits.
HTH
Agreed. Tax filing is complicated because taxes are complicated. A flat tax on all personal income from all sources as the sole tax would make tax filing incredibly simple. It’s equal in that everyone pays the same rate, and fair in that the more money people earn the more they pay. It would eliminate double taxation, tax uncertainty, save the economy money by eliminating tax accounting, and eliminate tax loopholes by eliminating different classifications of taxable goods, services, transactions, and events.
Paying 20% of income in taxes (for example) is a much heavier burden to bear if you're making 20k a year than it is if you're making 200 000. Which is why progressive taxation exists.
Back in my youth I didn't "get" this the marginal utility of a dollar. I was also a libertarian and Ron Paul supporter. How naive I was.
The law of diminishing marginal utility refers to homogenous goods. The marginal utility of the dollar only has meaning in the context of a particular good or service. Whether someone earns $20,000/year or $200,000/year says nothing about the marginal utility of dollars with respect to a particular good or service. The diminishing marginal utility of dollars is the same with respect to a gallon of milk for example, whether one has $20,000 or $200,000.
I’d also like to point out that “utility” is subjective. There are serious methodological shortcomings with quantifying the subjective satisfaction of various goods and services, particularly heterogenous goods like housing.
I’d also like to point out that “utility” is subjective. There are serious methodological shortcomings with quantifying the subjective satisfaction of various goods and services, particularly heterogenous goods like housing.
We'll never get a system like this in the US because it removes the ability to legislate via tax code.
Please stop with this. Free File is provided free of charge to a massive portion of the population. This is a solved problem. It is significantly more productive to spend your time supporting awareness of Free File.
The group that does not qualify for Free File most often requires the services of a tax professional anyway. Not because it is complicated, but because the monetary benefit of a tax professional is going to be more than the cost of their services.
These IRS grumpings by fringe libertarians is wildly unproductive and has no place on HN as it does not fall within any of the guidelines for content.
The group that does not qualify for Free File most often requires the services of a tax professional anyway. Not because it is complicated, but because the monetary benefit of a tax professional is going to be more than the cost of their services.
These IRS grumpings by fringe libertarians is wildly unproductive and has no place on HN as it does not fall within any of the guidelines for content.
I agree that the effort is best spent on promoting Free Fillable Forms which has no income limit (unlike Free File).
But I file my state taxes on paper because fuck those assholes. If your coworker stole 50 dollars straight out of your wallet would you not make a fuss? That is what these tax software companies are doing every year.
And I don't need a paid tax professional, I get paid on a single W-2. And the one time I did need them (income in multiple states, ambiguous residence, as an international student) they were useless and I knew the laws better than they did.
But I file my state taxes on paper because fuck those assholes. If your coworker stole 50 dollars straight out of your wallet would you not make a fuss? That is what these tax software companies are doing every year.
And I don't need a paid tax professional, I get paid on a single W-2. And the one time I did need them (income in multiple states, ambiguous residence, as an international student) they were useless and I knew the laws better than they did.
> the monetary benefit of a tax professional is going to be more than the cost of their services.
Sure, structuring your spending in advance to optimize taxes is something you might want to ask outside help for. But when it comes to paying your taxes based on how you’ve already used your money, why does it make sense for there to be anything other than one value which both you and the government agree is owed? Why should it be negotiable?
Sure, structuring your spending in advance to optimize taxes is something you might want to ask outside help for. But when it comes to paying your taxes based on how you’ve already used your money, why does it make sense for there to be anything other than one value which both you and the government agree is owed? Why should it be negotiable?
If you have an AGI(meaning your income after deductions) of more than $66k a year you have to pay $40-$60. Meaning you likely make $85k+.
Come on. Seriously? That's worth making this crazy fuss about?
Come on. Seriously? That's worth making this crazy fuss about?
Absolutely.
You're paying a tax to pay your taxes. That's fucked, and doubly so because you're paying the toll to a parasitic company that only exists because of the government's inability to provide basic services.
You're paying a tax to pay your taxes. That's fucked, and doubly so because you're paying the toll to a parasitic company that only exists because of the government's inability to provide basic services.
> that’s worth making this crazy fuss about?
You’re making as much a fuss about this as me. If you want to foster productive discussion, at least respond to what the comment you’re replying to was about: why should your tax bill be negotiable after you’ve finalized your spending?
You’re making as much a fuss about this as me. If you want to foster productive discussion, at least respond to what the comment you’re replying to was about: why should your tax bill be negotiable after you’ve finalized your spending?
You should consider reading the article, as it details how the industry manages to prevent free file from being successful, including misleading eligible people into thinking their "free edition" is the same thing.
I did. I should be extended. It makes sense. There is no reason to waste taxpayer money and risk when this is a solved problem that allows taxpayers to choose from a wide variety of tax preparation services. For free.
And for those of us who do not trust these private, for-profit (and imo corrupt and predatory) companies with our financial data? What then? There is a reason Intuit does not want me to be able to give my tax forms directly to the government. I refuse, even though it is ostensibly "free" (hint: it isn't really "free" at all, and we all know that, because Intuit wouldn't be fighting so hard if it were).
The only people who are experts in a particular industry are the people running the businesses that make up that industry. So the government, in order to try to make rules that don't suck, depend on their input when drafting the rules.
This, and in combination with significant lobbying, means that given enough time the industry being regulated gets to have significant amount of control over the rules being created.
Oil, airflight, cars, steel production, cable television industry, etc etc. Everything that the government tries regulate suffers the same fate to differing degrees.
And when it comes to certain industries, like banking or medical industry, and handful of executives of top corporations end up rotating in and out of government. Being a VP one year, a lobbyist for a couple years, and then end up as a higher level bureaucrat on some cabinet or board somewhere.
They have a phrase for it:
https://en.wikipedia.org/wiki/Regulatory_capture