60M Americans have taxes so simple the IRS could do them automatically(vox.com)
vox.com
60M Americans have taxes so simple the IRS could do them automatically
https://www.vox.com/23055489/irs-automatic-filing-prepopulated-returns
297 comments
I'd love to see the actual reasons these folks end up getting fined. The amount of lower income folks I've met who have claimed to have "written off" their vehicle by driving for Uber once is too damn high.
I suspect these people are exaggerating, or are making up stories to make it sound like they "stuck it to the man". It's pretty trivial for the IRS to figure out that a vehicle fully deducted for business use is not actually being used for business use. I'm sure this is even the sort of thing that they have automated software to flag.
... Is this a joke?
Or do you actually believe that the IRS should prioritize their resources on catching poor people trying to skirt taxes on hourly work over wealthy people and corporations that use/abuse the system at the expense of the population of the planet?
Or do you actually believe that the IRS should prioritize their resources on catching poor people trying to skirt taxes on hourly work over wealthy people and corporations that use/abuse the system at the expense of the population of the planet?
How about both? Which is what happens, by the way.
People with 7 digits on their tax return get audited a LOT. Low-income people get audited more than people with 6-figure incomes, but they also arguably have lower levels of tax compliance too.
And I have no interest in incentivizing low-income people to cheat on taxes - that will just result in them voting for more taxes that they can cheat on and impose on the rest of us.
People with 7 digits on their tax return get audited a LOT. Low-income people get audited more than people with 6-figure incomes, but they also arguably have lower levels of tax compliance too.
And I have no interest in incentivizing low-income people to cheat on taxes - that will just result in them voting for more taxes that they can cheat on and impose on the rest of us.
IRS workers goals will largely be around statutory/policy compliance rather than maximization. And government “incentives” are different from usual — if they really want more money they can pass different laws.
Where there’s a bone to pick with IRS behavior, the cause is the people who write the laws, congress. Their incentives are different too. And it turns out if you want to spread anti-tax sentiment, one thing you might do is cooperate with the lobby for making filing itself a difficult and danger-fraught process.
Where there’s a bone to pick with IRS behavior, the cause is the people who write the laws, congress. Their incentives are different too. And it turns out if you want to spread anti-tax sentiment, one thing you might do is cooperate with the lobby for making filing itself a difficult and danger-fraught process.
> This is the easiest money they can get, as evidenced by the fact it's what the IRS goes after when it's "chronically underfunded."
You do realize that the IRS doesn't get to keep the extra tax money it manages to collect via audits, right? That money goes to the treasury, the same as if it was correctly paid in the first place.
I did some digging on where penalties go, and didn't find anything conclusive, but there was a CBO report on IRS enforcement that listed penalties and collected tax as "revenue", which usually means that it goes to the treasury, not directly to a particular agency.
You do realize that the IRS doesn't get to keep the extra tax money it manages to collect via audits, right? That money goes to the treasury, the same as if it was correctly paid in the first place.
I did some digging on where penalties go, and didn't find anything conclusive, but there was a CBO report on IRS enforcement that listed penalties and collected tax as "revenue", which usually means that it goes to the treasury, not directly to a particular agency.
Yes but the IRS is rated on how much they bring in vs how much they spend. When they go to congress to justify their budget, they talk about their multiple.
What would "get[s] to keep the extra tax money" even mean in the context of the government? Bonuses for the employees? It's Monopoly money as far as I'm concerned.
It's the criteria they're evaluated on. It's the driver behind every "for every $X you spend on the IRS the government gets $Y" talking point that legitimizes making the organization more/less powerful. It's the thing the organization is trying to maximize, and that's the rationale they give for where they target their current enforcement.
It's the criteria they're evaluated on. It's the driver behind every "for every $X you spend on the IRS the government gets $Y" talking point that legitimizes making the organization more/less powerful. It's the thing the organization is trying to maximize, and that's the rationale they give for where they target their current enforcement.
From https://www.taxpayeradvocate.irs.gov/news/nta-blog-eitc-audi...
> One study with the most recent data available from the IRS showed that 21 percent of known EITC errors (meaning an error identified during an audit with full taxpayer participation) were attributable to qualifying child rules; 58 percent of the errors were tied to income misreporting; and nine percent contained both errors.
> Qualifying child errors account for the most dollars of erroneous claims by far. Of the qualifying child errors, 20 percent involved the relationship test, ten percent related to the age test, and 75 percent involved residency. Income misreporting – and in particular self-employment income misreporting – accounts for the second highest dollar amount of erroneous claims.
> One study with the most recent data available from the IRS showed that 21 percent of known EITC errors (meaning an error identified during an audit with full taxpayer participation) were attributable to qualifying child rules; 58 percent of the errors were tied to income misreporting; and nine percent contained both errors.
> Qualifying child errors account for the most dollars of erroneous claims by far. Of the qualifying child errors, 20 percent involved the relationship test, ten percent related to the age test, and 75 percent involved residency. Income misreporting – and in particular self-employment income misreporting – accounts for the second highest dollar amount of erroneous claims.
The TL;DR version is that people lie about still having kids who depend on them and about "under-the-table" income.
Assuming “they” in the last sentence is the IRS, they would make it easier because they are an arm of society, and we as society should incentivize making it worse for cheats in big dollars and less punitive for honest or naive mistakes at a smaller scale.
We do not have that society but that is my direct answer.
We do not have that society but that is my direct answer.
Why is “chronically underfunded” in quotes?
Because if the IRS maximized its "let's automatically do your taxes for you" ability, it would eliminate all the inadvertent violators, reducing the enforcement requirements.
If the government really got on the stick and stopped trying to reduce every issue to the correct set of tax incentives/penalties, we could make the tax code something regular people (or, at least, less than a suite of specialized accountants) could understand. This would simplify both compliance _and_ enforcement.
I want the IRS to have enough resources to do its job thoroughly, but we give them $13.7b/yr already. I have a hard time believing we couldn't do the job for that if the policy were sane.
If the government really got on the stick and stopped trying to reduce every issue to the correct set of tax incentives/penalties, we could make the tax code something regular people (or, at least, less than a suite of specialized accountants) could understand. This would simplify both compliance _and_ enforcement.
I want the IRS to have enough resources to do its job thoroughly, but we give them $13.7b/yr already. I have a hard time believing we couldn't do the job for that if the policy were sane.
> Because if the IRS maximized its "let's automatically do your taxes for you" ability
Unfortunately, they are legally barred from doing that. Thank Intuit and the tax-prep lobby for making people (and, most importantly, Congress) believe that doing taxes is supposed to be hard, annoying, in-your-face work.
Because apparently if it was streamlined, it would somehow make people complacent and accept (or not even notice) increased taxes. Yes, corporate propaganda can tell people they are stupid and lazy, and they not only believe it, but believe it's their patriotic duty to believe it.
Unfortunately, they are legally barred from doing that. Thank Intuit and the tax-prep lobby for making people (and, most importantly, Congress) believe that doing taxes is supposed to be hard, annoying, in-your-face work.
Because apparently if it was streamlined, it would somehow make people complacent and accept (or not even notice) increased taxes. Yes, corporate propaganda can tell people they are stupid and lazy, and they not only believe it, but believe it's their patriotic duty to believe it.
“Already” feels like it’s doing a lot of the work there. The budget had been decreasing for most (the entirety?) of the last decade and only recently was increased:
https://www.cbpp.org/research/federal-tax/the-need-to-rebuil...
But overall, I agree that way too much of federal policy is doled out as tax credits/deductions/penalties or what have you, but there are other reasons for that, which for me have little bearing on whether the IRS should be properly funded enough to after the biggest tax cheats.
https://www.cbpp.org/research/federal-tax/the-need-to-rebuil...
But overall, I agree that way too much of federal policy is doled out as tax credits/deductions/penalties or what have you, but there are other reasons for that, which for me have little bearing on whether the IRS should be properly funded enough to after the biggest tax cheats.
Seems like the argument here is whether "properly funded" for the IRS should stipulate a sane tax code. I'm fine with temporarily juicing the IRS's budget to whatever if it means we go after more tax cheats and get more revenue (I understand that the IRS is fundamentally productive re: the government's budget), but I also know that an organization never willingly gives up budget, and $13.7b isn't small potatoes, even for the US. Feels like we could do the job for that, all other problems being solved.
(FWIW, the IRS could easily go after "the biggest tax cheats" right now. They don't need $13.7b to do that. They don't go after them because they're maximizing revenue, which I understand, but it's not like their choice of targets makes a material difference in our deficit, and I'm very worried that giving them more money will just give them more resources to "maximize revenue" and they'll simply never get to "the biggest tax cheats" because they'll never have "enough" revenue)
(FWIW, the IRS could easily go after "the biggest tax cheats" right now. They don't need $13.7b to do that. They don't go after them because they're maximizing revenue, which I understand, but it's not like their choice of targets makes a material difference in our deficit, and I'm very worried that giving them more money will just give them more resources to "maximize revenue" and they'll simply never get to "the biggest tax cheats" because they'll never have "enough" revenue)
> Because if the IRS maximized its "let's automatically do your taxes for you" ability, it would eliminate all the inadvertent violators, reducing the enforcement requirements.
What power does the IRS have to automatically do anyone's taxes? Not only would that require laws to change, which the IRS does not have the ability to change, but it would also require access to a huge amount of private info fed either by private citizens or corporations.
What power does the IRS have to automatically do anyone's taxes? Not only would that require laws to change, which the IRS does not have the ability to change, but it would also require access to a huge amount of private info fed either by private citizens or corporations.
I have complicated taxes. The CPA's at the lawfirm I use request my tax data from the IRS then compare it to the tax documents from assorted firms I deal with and then just plug it all in again into a form that looks like what the IRS sent them but signed by a different party then they submit it. Even with my complicated mess it could be 100% automated, or perhaps 99.999% and I just press an "Acceptable" or "Dispute" button after they did it if such an interface existed. Every time I've had to engage lawyers with the IRS it has been a mistake of 3rd party firms neglecting to give me a missing form or page usually after mergers. Only once have I've had them accept something was incorrect after battling the IRS and to even break even on that one I would have to take a financial firm to court. The IRS should be going after the 3rd party firms that flubbed their documents, not me. It's a steamy hot mess.
Since the discussion is about budget it is also worth noting the IRS have its own courts, lawyers, judges that operate entirely independent of the rest of the legal system. They even have summer breaks and if one has an issue it may sit in a queue for several months or years. I just closed out 2020 and that was a simple error.
Since the discussion is about budget it is also worth noting the IRS have its own courts, lawyers, judges that operate entirely independent of the rest of the legal system. They even have summer breaks and if one has an issue it may sit in a queue for several months or years. I just closed out 2020 and that was a simple error.
Many people just have all their income come from sources that file with the IRS already (e.g. W2 filers) and they take the standard deduction.
What amount of private information would be necessarily added?
The proposal is the IRS should propose that they tax you at X rate, and you only file if you disagree. So if you have deductions they can’t know of, then you file.
What amount of private information would be necessarily added?
The proposal is the IRS should propose that they tax you at X rate, and you only file if you disagree. So if you have deductions they can’t know of, then you file.
>> Because if the IRS maximized its "let's automatically do your taxes for you" ability, it would eliminate all the inadvertent violators, reducing the enforcement requirements.
It would also drastically reduce IRS's own costs, though.
It would also drastically reduce IRS's own costs, though.
Reductions in the size of the service? The whole idea is... It strikes at the very roots of... It's the beginning of the end! The thin end of the wedge!
like on the one hand, 13B is a lot, but on the other hand that works out to roughly $12 per person which isn't a ton if you want to actually investigate any non trivial percent of them.
Surely the IRS isn’t handling the taxes from nearly a billion people?
It's 12 per person after the taxes are taken out ;)
oops, midnight math. call it 350mil people do $50ish per?
Far too much given that the VAST majority of people turn in a 1099-EZ and have no special tax circumstances. Adding w-2s, that's a total of about 10 pages.
> Far too much given that the VAST majority of people turn in a 1099-EZ
You are thinking of the 1040EZ which, along with the 1040A, was eliminated a while back (6 years ago, IIRC) in favor of making to the 1040 modular (but then the 1040-SR for seniors was added, which kind of reverses that policy direction.)
You are thinking of the 1040EZ which, along with the 1040A, was eliminated a while back (6 years ago, IIRC) in favor of making to the 1040 modular (but then the 1040-SR for seniors was added, which kind of reverses that policy direction.)
The 1040-EZ hasnt existed in years
I most certainly do not want to investigate a "non-trivial percent" of people and there's literally no reason to do that given what the IRS already knows.
I don't know. I don't think the IRS keeps any of the money it collects.
Another thing is that the IRS is an adversary, until you’re rich, then they’re a collaborator
when you’re not rich, this adversarial assumption leads people to actually hide money. like “oh wow I’ve never been in a situation where my employer isn't automatically snitching on me, guess I wont report and just worry incessantly about venmo payments over $600 for the next decade!”
when you’re not rich, this adversarial assumption leads people to actually hide money. like “oh wow I’ve never been in a situation where my employer isn't automatically snitching on me, guess I wont report and just worry incessantly about venmo payments over $600 for the next decade!”
The IRS is always your adversary, but the people who write the tax code become your friends at a certain point.
nah that’s another level deeper, playing with politicians and public sector employees
the IRS simply does far more than enforcement, at a certain point it switches from hiding from the IRS, to filing and hoping you arent picked for scrutiny, to informing the IRS ways you wont pay them taxes (ie. 83b elections, S-corp designation, 5500 for tax deferred plans), to collaborating with the IRS on not paying taxes (ie. 501(c)X non-profit approval, Advance Pricing Agreements)
the IRS simply does far more than enforcement, at a certain point it switches from hiding from the IRS, to filing and hoping you arent picked for scrutiny, to informing the IRS ways you wont pay them taxes (ie. 83b elections, S-corp designation, 5500 for tax deferred plans), to collaborating with the IRS on not paying taxes (ie. 501(c)X non-profit approval, Advance Pricing Agreements)
I think about that kind of thing as the lawmakers being your friend (but perhaps unintentionally), not the IRS. Those forms are a gentle "fuck you" to the IRS, enabled by congress.
The IRS unilaterally makes the forms, unilaterally makes the guidance, offers private letter rulings that can be in favor of one taxpayer, can unilaterally offer tax exemptions, to the point where you would think the Internal Revenue Service isn’t even interested in revenue collection
The passionate overzealous people in the audits and enforcement division are just one part of the IRS, thats my point
There are some very obscure areas of the IRS with pleasant people just waiting for attention to help you with a less used part of the tax code
The passionate overzealous people in the audits and enforcement division are just one part of the IRS, thats my point
There are some very obscure areas of the IRS with pleasant people just waiting for attention to help you with a less used part of the tax code
In their agreement with the IRS, Scientology got spending on courses/"auditing" to be tax deductible in contravention of a Supreme Court ruling! I guess you just need time and money.
They audit people who are eligible for EITC because they trivially know what most of them make / how much credit they qualify for and can have an algorithm tell them fraud is present with almost 100% accuracy.
If you want more handouts for the poor then vote for it. Don’t blame the IRS for enforcing the tax code. They should audit anyone and everyone fraudulently filing.
If you want more handouts for the poor then vote for it. Don’t blame the IRS for enforcing the tax code. They should audit anyone and everyone fraudulently filing.
I don't want "handouts for the poor" (well, I do, but I'm perfectly happy to legislate them). I _also_ don't want "I don't pay taxes, but I make over X, and the IRS only has an enforcement budget of Y, so I can probably just file a false return and not worry about it because they'll be busy with all the 'little people'" to be the calculus of people like the VCs who fund this site. They are absolutely that smart. They remind us constantly. People like them absolutely make this calculation all the time under the current regime.
People whose incomes are above a certain threshold are much more likely to be audited. There are just a lot more people who take the EITC.
We know why the IRS disproportionately audits low income people, because the IRS Commissioner said so. It’s a result of intentional budget cutting on enforcement. They don’t enough investigators, so they go with the easiest to audit, people making less than $20,000.
This is a policy decision from top to bottom.
https://www.propublica.org/article/irs-sorry-but-its-just-ea...
This is a policy decision from top to bottom.
https://www.propublica.org/article/irs-sorry-but-its-just-ea...
[deleted]
Your own source links to an article which says that people whose incomes are over $1 million are much more likely to be audited than EITC recipients. $500k to $1 million is when your taxes start to really get complicated.
Honestly, if that's where the cheating takes place, they should go for it. It is disingenuous to say that they get audited more than the wealthy, though. Because they don't.
Honestly, if that's where the cheating takes place, they should go for it. It is disingenuous to say that they get audited more than the wealthy, though. Because they don't.
[deleted]
It's not just the population size. Those receiving the EITC are audited at a much higher rate than any other group making less than seven figures. You are correct that the rate goes up after that.
Arborealist(2)
Instead of fining mistakes/omissions which may be deliberste or unintentional, they should calculate, send out a bill and fine those who don't pay up.
That's basically what ends up happening. Over 40% of people don't respond to the initial audit notice, so what ends up happening is the adjustment is defaulted in the government's favor. See https://www.taxpayeradvocate.irs.gov/news/nta-blog-eitc-audi...
that's literally what they do though?
I've (unintentionally) fucked up my taxes like a good 30% of the time because I didn't understand something or a broker literally just missed 25% of the transactions I made in the 1099 they sent me, or w/e.
Every time without fail, some 1-3 years later the IRS sends a CP-whatever saying "yea you done fucked up, you owe $X with $Y interest ($Y is inevitably really low), because of Z missing income from your form". And then I just log on and pay and sometimes I send them a reply letter with whatever missing document, and that's it. (Since they know all this, it would be nice if they could just preemptively send me a 1040 to sign anyways, but oh well)
One year they even sent me a check when I fucked up in the other direction. No interest though lol.
I've (unintentionally) fucked up my taxes like a good 30% of the time because I didn't understand something or a broker literally just missed 25% of the transactions I made in the 1099 they sent me, or w/e.
Every time without fail, some 1-3 years later the IRS sends a CP-whatever saying "yea you done fucked up, you owe $X with $Y interest ($Y is inevitably really low), because of Z missing income from your form". And then I just log on and pay and sometimes I send them a reply letter with whatever missing document, and that's it. (Since they know all this, it would be nice if they could just preemptively send me a 1040 to sign anyways, but oh well)
One year they even sent me a check when I fucked up in the other direction. No interest though lol.
The difference is, if you're making <$20k/yr and have $100 in your bank account, and the IRS sends you a $1k bill, often you panic and ignore it instead of calling and waiting for 5 hours to talk or otherwise figure out how to set up a payment plan.
And that extra $1k disappeared immediately to make other ends meet.
And that extra $1k disappeared immediately to make other ends meet.
As a divorced parent with self-employed income my taxes can get complex. Years ago I screwed up, forgot a smaller 1099(?), IRS sent me a bill for what I owed + 8%. I stopped stressing since. I make best effort but a couple percent doesn't matter if your return is basically honest. It only hurts if you're being real "creatve"
They should also send refunds to people that overpay.
Also, people should be able to count their own time when calculating tax preparation costs.
Also, people should be able to count their own time when calculating tax preparation costs.
> Also, people should be able to count their own time when calculating tax preparation costs.
After recent tax changes, there's not a lot of room for itemized deductions. The standard deduction wins in way more cases than before, becuase it was enlarged and common deductions were limited.
After recent tax changes, there's not a lot of room for itemized deductions. The standard deduction wins in way more cases than before, becuase it was enlarged and common deductions were limited.
You may still want to itemize if only to know that you'd be better off with the standard deduction. A lot of people can guesstimate they won't benefit from itemizing, however.
I don't have a mortgage, and file jointly, so I need to find $15k of deductable expenses beyond SALT. It's not impossible, but it's also not likely. On the plus side, I no longer need to collect donation receipts.
> They should also send refunds to people that overpay.
They do. I’ve gotten checks from the IRS before, sometimes years later.
> counting their own time
This is not a good idea as my time is $1jillion/hour so the government owes me.
Seriously though, our time is factored into the standard deduction.
They do. I’ve gotten checks from the IRS before, sometimes years later.
> counting their own time
This is not a good idea as my time is $1jillion/hour so the government owes me.
Seriously though, our time is factored into the standard deduction.
I've also received checks several times. I've never cashed them, though; I have no idea what the correction was for, and the little paranoid, anti-authoritarian, legally illiterate conspiracy theorist sitting on my shoulder tells me a few bucks isn't worth the risk of falling for the IRS's clever entrapment scheme--because cashing a check can in theory constitute affirmation of the correction, which could have been erroneous for all know, and thus with some handwaving constitute fraudulent affirmation.
In reality the Federal IRS is a paper tiger compared to the California Franchise Tax Board. The FTB will shoot and ask questions later, and that's more than figurative if not quite literal. The FTB once garnished a paycheck while I was in the middle of correspondence with them.
From first person anecdotes I've heard, some other state tax authorities are similarly ruthless. My father got screwed out of a significant sum (in working-class terms) when Alabama came after him on the basis of some fraudulent 1099s (inflated payment amounts) from when he was a construction contractor. He had already moved to another state and it had been many years since the fraudulently reported income, making it infeasible to fight as it would cost too much to collect enough evidence to rebut Alabama's claim. While the Cal FTB has made national headlines a few times, most state services never make national headlines, so everybody just assumes the IRS are the bad guys, when in reality I think the IRS are relative softies.
In reality the Federal IRS is a paper tiger compared to the California Franchise Tax Board. The FTB will shoot and ask questions later, and that's more than figurative if not quite literal. The FTB once garnished a paycheck while I was in the middle of correspondence with them.
From first person anecdotes I've heard, some other state tax authorities are similarly ruthless. My father got screwed out of a significant sum (in working-class terms) when Alabama came after him on the basis of some fraudulent 1099s (inflated payment amounts) from when he was a construction contractor. He had already moved to another state and it had been many years since the fraudulently reported income, making it infeasible to fight as it would cost too much to collect enough evidence to rebut Alabama's claim. While the Cal FTB has made national headlines a few times, most state services never make national headlines, so everybody just assumes the IRS are the bad guys, when in reality I think the IRS are relative softies.
the CA FTB is the only tax agency thus far to ever send me a letter disagreeing with what I had filed. The gist of it was that I had made a multi-decimal-place error on one paycheck when requesting extra withholding, and then left it still too big by an order of magnitude after I tried to correct it (b/c the year before i had owed them ~$4k and I prefer the psychological feeling of getting a small refund) which resulted in getting a refund so large I triggered some automatic "this must be a mistake" audit.
I had slightly complicated taxes that year and actually called them and spoke to someone who helped narrow down the number of forms I needed to dig up and submit to just a single form from one employer, and confirmed that it was due to the above withholding anomaly. I sent that form and a couple months later they sent me a letter indicating that my original number was basically correct. for some reason they preferred a number that was lower by a few dollars and I really didn't care, so I happily cashed the refund check (which was for several $k (IIRC between $5-10k, which i did care about).
The next year I had to file an extra form - apparently FTB had held my refund for long enough that when they sent it back to me they also paid me interest on my refund, and I had to file for taxes on that interest...
I had slightly complicated taxes that year and actually called them and spoke to someone who helped narrow down the number of forms I needed to dig up and submit to just a single form from one employer, and confirmed that it was due to the above withholding anomaly. I sent that form and a couple months later they sent me a letter indicating that my original number was basically correct. for some reason they preferred a number that was lower by a few dollars and I really didn't care, so I happily cashed the refund check (which was for several $k (IIRC between $5-10k, which i did care about).
The next year I had to file an extra form - apparently FTB had held my refund for long enough that when they sent it back to me they also paid me interest on my refund, and I had to file for taxes on that interest...
Just to echo what the other OP said, my accountant is a wonderful person, but for the last couple years I get a second mini-refund months after my taxes have been paid.
Also, my 9 year old just read this whole thread and has this to say, "you people are just messing around and should get on with your lives" :)
Also, my 9 year old just read this whole thread and has this to say, "you people are just messing around and should get on with your lives" :)
Your 9 year old is a wise child.
So you are saying that in the majority of these cases the fraud is intentional and not accidental?
The point being the IRS can completely solve accidental mistakes but just telling everybody what they owe instead of forcing them to calculate it themselves.
The point being the IRS can completely solve accidental mistakes but just telling everybody what they owe instead of forcing them to calculate it themselves.
I assume a fair bit would be people claiming deductions they aren’t actually entitled to like expenses for driving to work.
Arborealist(3)
I would assume that there is at least some constant personnel or time cost per audit that the IRS incurs. I would also assume that even with recently increased funding, the IRS only the capacity to audit a small sampling of the taxpayer base.
In that case, from a revenue recovery point of view, going after the highest income / highest discrepancy taxpayers produces the greatest return on investment, with some randomness involved to keep everyone on their toes.
In that case, from a revenue recovery point of view, going after the highest income / highest discrepancy taxpayers produces the greatest return on investment, with some randomness involved to keep everyone on their toes.
There’s lots of “automated audits” where a letter is just generated and sent out.
It’s like being able to spam offenders of EITC to spend 25 cents to collect a few grand with a 99.99% collection rate. Versus spending hundreds of hours on a complex audit that may or may not yield any fines and has like 25/75 win rate.
It’s like being able to spam offenders of EITC to spend 25 cents to collect a few grand with a 99.99% collection rate. Versus spending hundreds of hours on a complex audit that may or may not yield any fines and has like 25/75 win rate.
In the Netherlands our IRS equivalent does prefill the majority of the requested information automatically as in many other countries, I noticed in other comments.
Obviously this means they are able to gather lots of data from different other government agencies (e.g. annual income is usually prefilled) and banks (so bank account / savings numbers are prefilled)
For the majority of people the convenience will probably prevail over any thoughts about the data collection going on in the background.
Also, for us, at least in the Netherlands and maybe also in many other countries, we are usually happy about all this data sharing, because it saves us filling in many forms / bureaucracy.
If you move to another city, you hardly have to do a thing, the old/new city will automatically inform many government agencies about your new address.
I personally also consider this as very convenient, I am pretty much accustomed to all this data sharing also because the data has to be provided to whomever needs it, and is legally accustomed to receive it, anyway.
However, after reading the linked article, it made me think.
I now wonder,are there people who read what happens in my country and who gets the shivers? E.g. from a privacy perspective?
Obviously this means they are able to gather lots of data from different other government agencies (e.g. annual income is usually prefilled) and banks (so bank account / savings numbers are prefilled)
For the majority of people the convenience will probably prevail over any thoughts about the data collection going on in the background.
Also, for us, at least in the Netherlands and maybe also in many other countries, we are usually happy about all this data sharing, because it saves us filling in many forms / bureaucracy.
If you move to another city, you hardly have to do a thing, the old/new city will automatically inform many government agencies about your new address.
I personally also consider this as very convenient, I am pretty much accustomed to all this data sharing also because the data has to be provided to whomever needs it, and is legally accustomed to receive it, anyway.
However, after reading the linked article, it made me think.
I now wonder,are there people who read what happens in my country and who gets the shivers? E.g. from a privacy perspective?
The IRS already has that information (and one could argue that they need it to enforce that tax is paid correctly, though that's a separate debate). Preventing them from using it for citizens' benefit doesn't improve those citizens' privacy at all, it just props up the tax prep industry.
This type of -- understandable -- confusion comes up every time there's a discussion about the American tax system.
The IRS already has all the same information that your country's tax authorities have. Employers, banks, investment firms, etc. are all required to report these sorts of income to the IRS.
Unfortunately, companies like Intuit (and other tax-prep juggernauts) have lobbied to bar the IRS from making it easier for people to do their taxes. And they've convinced a disturbing number of US citizens that this is right and correct, because if taxes were streamlined and easy to do, that sneaky, evil government would slip through even more taxes, and no one would even notice. Somehow, enough people buy this nonsense that nothing changes.
The IRS already has all the same information that your country's tax authorities have. Employers, banks, investment firms, etc. are all required to report these sorts of income to the IRS.
Unfortunately, companies like Intuit (and other tax-prep juggernauts) have lobbied to bar the IRS from making it easier for people to do their taxes. And they've convinced a disturbing number of US citizens that this is right and correct, because if taxes were streamlined and easy to do, that sneaky, evil government would slip through even more taxes, and no one would even notice. Somehow, enough people buy this nonsense that nothing changes.
Here (NL) the laws around data sharing are very strict about who can and can't access this data. Rest assured, it is very good here and sets a reasonable balance between privacy and necessary data sharing.
No shivers from me (an American). I think I'd prefer your way of doing it.
It also means you aren’t thinking about what you’re paying so often. Of course they do the magic work of taking your money from you, for you. People probably don’t even notice it, how nice.
Taxes, although necessary, should be painful to pay. Every last bit should be accounted for and legit.
If anything governments should send you a receipt detailing where all your tax money was spent.
Taxes, although necessary, should be painful to pay. Every last bit should be accounted for and legit.
If anything governments should send you a receipt detailing where all your tax money was spent.
Trust me, nobody's thinking about what they're paying for. More often, they're just stressed.
If you want to educate the taxpayer to be more well informed, there's way better mechanism than inflicting pointless bureaucratic misery and anxiety.
If you want to educate the taxpayer to be more well informed, there's way better mechanism than inflicting pointless bureaucratic misery and anxiety.
That's nonsense. It's amazing that Intuit and the others have been so effective at their propaganda that they can not only convince people that they are too stupid and lazy to notice when the government tries to add new taxes, but that it's their patriotic duty to make their lives harder in order to counter that stupidity and laziness.
I also suspect most people don't really realize how much tax they pay under the current system, since W-2 employees have the bulk of their taxes automatically deducted from their paychecks and paid throughout the year. Sure, the total number ends up on the tax return, but the number of focus is always either the amount due or amount to be refunded. People doing their taxes by hand, either on paper or by filling out the PDFs directly, may be more likely to realize these numbers, but anyone who uses TurboTax or goes to a mass-market accountant like H&R Block might not even notice.
Regardless, I would much prefer a system where the IRS sends me an email telling me my tax return is ready, and then I can read it over, edit it if there are things I don't agree with or deductions the IRS didn't know about, and then sign it and be on my way. If that sort of system causes people to ignore it and just approve it without reading it, that's on them, and I'm sick of the idea that I have to suffer (and spend money on a CPA[0]) because others might -- might! -- treat their tax returns like a click-through software license agreement.
[0] I use a CPA because I have enough income sources and line-items that doing it myself would be annoying, time-consuming, and error-prone. But everything that ends up on my tax return is still data the IRS already has, and I expect that if they were legally allowed to prepare my return for me, it would be accurate, and I wouldn't have to do much (if anything) in order to approve it.
I also suspect most people don't really realize how much tax they pay under the current system, since W-2 employees have the bulk of their taxes automatically deducted from their paychecks and paid throughout the year. Sure, the total number ends up on the tax return, but the number of focus is always either the amount due or amount to be refunded. People doing their taxes by hand, either on paper or by filling out the PDFs directly, may be more likely to realize these numbers, but anyone who uses TurboTax or goes to a mass-market accountant like H&R Block might not even notice.
Regardless, I would much prefer a system where the IRS sends me an email telling me my tax return is ready, and then I can read it over, edit it if there are things I don't agree with or deductions the IRS didn't know about, and then sign it and be on my way. If that sort of system causes people to ignore it and just approve it without reading it, that's on them, and I'm sick of the idea that I have to suffer (and spend money on a CPA[0]) because others might -- might! -- treat their tax returns like a click-through software license agreement.
[0] I use a CPA because I have enough income sources and line-items that doing it myself would be annoying, time-consuming, and error-prone. But everything that ends up on my tax return is still data the IRS already has, and I expect that if they were legally allowed to prepare my return for me, it would be accurate, and I wouldn't have to do much (if anything) in order to approve it.
This. Everyone should pay quarterlies and employers should not withhold. People should feel the visceral pain of having their money taken away and be inconvenienced by the complexity of the tax code. Then we can have real discussions about what is worth funding with taxes and how to structure them.
It occurred to me the other day that if someone owes unpaid taxes, it is probably cheaper to wait for the IRS to send you an unpaid bill than to pay Turbo Tax. According to the IRS collection procedure [1], the interest on the unpaid amount is only 3% and the penalty is 0.5% per month. Unless the owed amount is really high, exceeding 10,000$, the bill due is still less than what they would pay for service at Turbo Tax which costs over 100$ easily nowadays.
[1] https://www.irs.gov/faqs/irs-procedures/collection-procedura...
[1] https://www.irs.gov/faqs/irs-procedures/collection-procedura...
If you have a simple return with no forms or schedules, then you can file for free at Turbo Tax.
If you have a more complicated return that requires the paid Turbotax software, then when the IRS computes what you owe, it's likely to be a higher number than what you'd calculate with TurboTax, since the IRS isn't going to deduct itemized expenses, business expenses, etc from your income.
If you have a more complicated return that requires the paid Turbotax software, then when the IRS computes what you owe, it's likely to be a higher number than what you'd calculate with TurboTax, since the IRS isn't going to deduct itemized expenses, business expenses, etc from your income.
> If you have a simple return with no forms or schedules, then you can file for free at Turbo Tax.
If you owe more than $10,000, you probably aren't eligible for the free filing at Turbotax. [1]
[1] https://turbotax.intuit.com/modals/dynamic/?instance=c7YON5P...
If you owe more than $10,000, you probably aren't eligible for the free filing at Turbotax. [1]
[1] https://turbotax.intuit.com/modals/dynamic/?instance=c7YON5P...
If you need/want to file EITC or Child Tax credit, IIRC, you don't qualify for free-file through Turbotax. You don't have to owe anything .
No, you let the amount accumulate over a decade until it gets so high until you call one of those late night infomercials and end up settling with the IRS for 10% of the bill.
> the interest on the unpaid amount is only 3%
No it's 3% plus the federal short-term rate. It's 7% right now.
https://www.irs.gov/newsroom/interest-rates-remain-the-same-...
No it's 3% plus the federal short-term rate. It's 7% right now.
https://www.irs.gov/newsroom/interest-rates-remain-the-same-...
As others have said, it’s now 7%. I’ve also gotten the bill 2 YEARS LATER! That’s two years of interest added. It still took another year to resolve it bc it’s quite literally impossible to call the IRS and the only way I could communicate was over fax with months long delays lol. So trust me you don’t want to go that route. Btw why are people paying for turbo tax???? For years I’ve been using free services such as credit karma tax (now cash app) which allow me to file complex forms like schedule C and stuff all for free. If you’re paying for anything it better be a CPA not TurboTax lol.
they wait ages to bill you. I had a pretty minor mistake once and got billed two years (iirc) later so interest was high.
that's basically equivalent to the official option to have the IRS figure your tax (https://www.irs.gov/faqs/irs-procedures/general-procedural-q...), except your implementation also pays a bunch of penalties ("5% of the unpaid taxes for each month or part of a month that a tax return is late, [up to] 25% of your unpaid taxes").
File for an extension, then check the W-2s and 1099s they have. You can actually do this on the IRS website about a month or so after the deadline. That's what my accountant does.
What if u over inflate all the income numbers.
Basically increase you tax, they will fix it for you to be accurate ?
If you claimed you got USD 10 million in bribes, how would the IRS verify that you actually got the money? It isn’t like the people giving you bribes will claim that as an expense… actually I’m not sure how it works.
If you own a restaurant and let’s say you bought a kilogram of tomatoes for a dollar and it spoiled but you don’t claim it as a loss. How can the IRS know this automatically and refund you?
I mean I agree they can for simple people like me who just have a w2 though…
If you own a restaurant and let’s say you bought a kilogram of tomatoes for a dollar and it spoiled but you don’t claim it as a loss. How can the IRS know this automatically and refund you?
I mean I agree they can for simple people like me who just have a w2 though…
You might receive a letter about an odd amount on a return asking for documentation. A strange claim of millions would likely earn a human audit which would uncover the truth. Keep in mind you can be found guilty for intentionally false tax returns of any kind.
A small discrepancy like forgetting to note wastage would never be caught, assuming it didn’t make it to Quickbooks initially. There has to be some ability to detect and audit what happened in order to correct it. This is partly why restaurants have been historically useful for laundering and fronting criminal operations.
A small discrepancy like forgetting to note wastage would never be caught, assuming it didn’t make it to Quickbooks initially. There has to be some ability to detect and audit what happened in order to correct it. This is partly why restaurants have been historically useful for laundering and fronting criminal operations.
> the interest on the unpaid amount is only 3%
You might want to read that bit again.
You might want to read that bit again.
My employer multiple times misreported my w2 income to the IRS, claiming they paid me 1.2 and 1.8x what I actually received by sending an extra undisclosed w2. The w2 they gave me was accurate. They sent an extra one without telling me with extra pay they never gave me.
I only caught the mistake the following year when I performed my annual ssa.gov inspection.
In Singapore, they pull your taxes directly from your bank account. What happens if the gets the calculation wrong?
I only caught the mistake the following year when I performed my annual ssa.gov inspection.
In Singapore, they pull your taxes directly from your bank account. What happens if the gets the calculation wrong?
It can never be completely automatic, because people may want to add deductions etc. In australia the my process was just going to the mygov website, looking at all the prefilled numbers and clicking ok. I think thats a good balance between automated and me having to look for numbers the tax department already knows.
Why can't it be automatic, but you can manually apply deductions. To get a refund or have them take less.
Perhaps automatic after a cutoff date or something might work. Im just saying that forcing people to approve the tax departments figures by clicking a button before amounts start getting deducted from bank accounts seems like an easy and agreeable process.
Are you sure someone else didn't use your SSN? I suppose if it had the same employer on it, that's unlikely. But I'm surprised that there isn't more misuse of SSNs.
I had identity theft a few years ago, which is why I keep an eye on things now. The extra w2 came from my employer. They admitted fault and corrected it for me.
In Australia the ATO will pre-populate some amounts. Its your job to check and agree this is correct.
If incorrect, you update to the correct amount and submit. Feom there it's up to the tax office to choose to investigate further or not.
If something happens like you said its simple to match bank payments to confirm.
If incorrect, you update to the correct amount and submit. Feom there it's up to the tax office to choose to investigate further or not.
If something happens like you said its simple to match bank payments to confirm.
Why would your employer do that? Incompetence? Something nefarious?
Regardless, if the IRS pre-filled this for you, then you would have caught it at filing time, which sounds like an improvement, if I’m understanding correctly.
Regardless, if the IRS pre-filled this for you, then you would have caught it at filing time, which sounds like an improvement, if I’m understanding correctly.
Incompetence.
It really depends what the process would be. If I get to approve, appeal, or delay all tax statements before the filing deadline, then this probably is ok. K-1s might not be delivered until after the deadline, resulting in angel investors needing to file an extension every year.
[0] - https://learn.angellist.com/articles/schedule-k-1
It really depends what the process would be. If I get to approve, appeal, or delay all tax statements before the filing deadline, then this probably is ok. K-1s might not be delivered until after the deadline, resulting in angel investors needing to file an extension every year.
[0] - https://learn.angellist.com/articles/schedule-k-1
Germany does taxes automatically in many cases. If you are just a regular employee you don't have to do anything. You usually only fill out a tax form if you have some extra expenses to declare for which you would like to get some money back.
Finland too.
They even know that I bought apartment(shares for it). And I didn't report that to anyone.
I only went online added some deductions for using my home for remote work, half of the internet and some equipment I paid with my own money. About 5-10 minutes of work for some tax-money back.
I really see no reason why make life complicated for your average worker.
They even know that I bought apartment(shares for it). And I didn't report that to anyone.
I only went online added some deductions for using my home for remote work, half of the internet and some equipment I paid with my own money. About 5-10 minutes of work for some tax-money back.
I really see no reason why make life complicated for your average worker.
Same in Italy, tax report is actually not needed if you're a regular employee and don't have anything else to declare. If you do, each year you get a pre-filled form on which you only need to add your deductible expenses and/or additional income outside the regular employment.
>This isn’t a purely hypothetical proposal. Countries like Denmark, Belgium, Estonia, Chile, and Spain already offer such ”pre-populated returns” to their citizens.
Spain is the largest of these by far, with a little under 50 million people. Quick search says about 19 million households.
Did the researchers do their work in a way that could scale up to 60 million and beyond well? Just because the IRS has the data doesn't mean it's easy to do stuff with it. (Thinking about how the ATF has gun databases that are non-searchable.)
Spain is the largest of these by far, with a little under 50 million people. Quick search says about 19 million households.
Did the researchers do their work in a way that could scale up to 60 million and beyond well? Just because the IRS has the data doesn't mean it's easy to do stuff with it. (Thinking about how the ATF has gun databases that are non-searchable.)
Wouldn't the scaling often be favorable?
Like if you have a system and make an improvement that simplifies 10 million returns in a big country and 1 million returns in a small country, it's worth more in the big country.
Like if you have a system and make an improvement that simplifies 10 million returns in a big country and 1 million returns in a small country, it's worth more in the big country.
“ Thinking about how the ATF has gun databases that are non-searchable.”
That’s a bad example. As far as I know congress sabotaged them on purpose.
That’s a bad example. As far as I know congress sabotaged them on purpose.
My point was that just because the IRS has the data doesn't mean it can realistically use it.
I get the feeling they already do? My return was accepted in precisely 31 minutes this year. Not super complex but there were multiple things they had no idea about.
Definitely a intentional limit not a technical one.
Can we stop this scaling nonsense? I never understand why things like these wouldn't scale. And then they forget to go check bigger countries like India and China and how they do things. If those can scale, surely argument is always moot...
Does India do taxes for its citizens, is their taxing authority structured like the IRS, and is their tax law as complicated as ours?
Of course it can scale if the conditions are right, but certainly is an "if", unless you've got a lot of knowledge of the IRS's inner workings.
Of course it can scale if the conditions are right, but certainly is an "if", unless you've got a lot of knowledge of the IRS's inner workings.
They have the data and clearly can do things with it, as they do what are effectively automated audits, and send out notices if the numbers in the submitted returns don't match up with their data. It doesn't seem like much of a stretch to extend that system to automatically prepare the tax returns. As usual, it's just a matter of funding, programming, and continuing operational expenses. At worse, it would just take a while to generate all the returns, and maybe tax day would have to be pushed back a bit.
It would scale trivially.
When the GOP gleefully raised taxes on middle class citizens of New York, California, Massachusetts, etc, they made millions of people ineligible for most deductions. The biggest real barrier for automated returns would be which noncustodial parent gets to claim dependents.
When the GOP gleefully raised taxes on middle class citizens of New York, California, Massachusetts, etc, they made millions of people ineligible for most deductions. The biggest real barrier for automated returns would be which noncustodial parent gets to claim dependents.
This is not due to lobbying by Intuit. Their money isn't worth that much. What keeps this from happening in the US is Grover Norquist.
> This is not due to lobbying by Intuit.
Do you really believe this? There seems to have been quite a bit of lobbying by Intuit. https://en.m.wikipedia.org/wiki/CalFile
Do you really believe this? There seems to have been quite a bit of lobbying by Intuit. https://en.m.wikipedia.org/wiki/CalFile
> Do you really believe this?
Yes. Go look up Grover Norquist. Intuit could give millions of dollars to the coffers of politicians and still not be anywhere even approaching the influence of Norquist.
Yes. Go look up Grover Norquist. Intuit could give millions of dollars to the coffers of politicians and still not be anywhere even approaching the influence of Norquist.
> Grover Norquist
This is the first time I've heard of this theory and Google doesn't seem to have heard of it either... can you expand? According to Wikipedia he's a flat-tax supporter.
This is the first time I've heard of this theory and Google doesn't seem to have heard of it either... can you expand? According to Wikipedia he's a flat-tax supporter.
From the guy himself https://www.huffpost.com/entry/grover-norquist-taxes_b_30056...
Tldr: conservatives who are anti tax want to make taxes painful to make citizens against them. They believe that simplifying taxes would make it easier for the govment to raise taxes, which they’re vehemently against.
Tldr: conservatives who are anti tax want to make taxes painful to make citizens against them. They believe that simplifying taxes would make it easier for the govment to raise taxes, which they’re vehemently against.
lettergram(6)
The majority of people who couldn’t be handled automatically currently are that way pretty much entirely due to corporate lobbying.
The vast majority of things that could be automatic aren’t, specifically due to legislation prohibiting it. For example stock trading companies provide all your trades to the IRS, banks provide info to the IRS, etc and yet the IRS is prohibited from using that to even just provide you a prefilled tax return.
The vast majority of things that could be automatic aren’t, specifically due to legislation prohibiting it. For example stock trading companies provide all your trades to the IRS, banks provide info to the IRS, etc and yet the IRS is prohibited from using that to even just provide you a prefilled tax return.
Its not corporate lobbying, it’s the complexity of the tax code.
So much information you need for a moderately complex return isnt sent to the IRS.
A good example is cost-basis for RSUs. I have to calculate that myself or i get taxed with a cost-basis of $0.
So much information you need for a moderately complex return isnt sent to the IRS.
A good example is cost-basis for RSUs. I have to calculate that myself or i get taxed with a cost-basis of $0.
Of course it’s lobbying.
If you are dealing with RSUs you are not part of the 60 million that could be done automatically.
If you are dealing with RSUs you are not part of the 60 million that could be done automatically.
All you have to do is look at the 1040 to see that it couldn't be done automatically for a lot of tax payers - hence lobbying may be a factor, but the tax code is a bigger issue because the government doesn't have the information it needs to complete the return.
Are you a dependent [see instructions for criteria]?
Are you blind?
List all dependents [see instructions for critera] and whether or not they qualify for Child Tax Credit.
Tip income not reported.
It goes on, and on and on. Unless you have the most basic return possible - W2 income and nothing else, the tax code requires information from the tax payer that the IRS does not have access to.
I've lived in countries that automatically complete tax returns for you. It works great because it's simple - all your income is added up, then you get a couple deductions based on information automatically shared with the government and that's it.
The US tax code would either: a) have to be radically simplified and/or b) more information would need to be collected by parties and shared with the government.
Are you a dependent [see instructions for criteria]?
Are you blind?
List all dependents [see instructions for critera] and whether or not they qualify for Child Tax Credit.
Tip income not reported.
It goes on, and on and on. Unless you have the most basic return possible - W2 income and nothing else, the tax code requires information from the tax payer that the IRS does not have access to.
I've lived in countries that automatically complete tax returns for you. It works great because it's simple - all your income is added up, then you get a couple deductions based on information automatically shared with the government and that's it.
The US tax code would either: a) have to be radically simplified and/or b) more information would need to be collected by parties and shared with the government.
Simplified tax form:
1. How much money did you make last year? ______ 2. Send it all in.
1. How much money did you make last year? ______ 2. Send it all in.
I mean that's basically what it's doing: giving an accurate answer as a single value here requires you go through the same work. A lot of the extra is classifying what type of "earn" you did to reduce the tax burden. Simpler tax systems tend to basically reduce the options for you futzing with what "type" of income it is.
For example, the US apparently includes deductions to compensate for money spent on special classes of medication (based on comments in these threads), but in countries with functional healthcare systems that's handled by virtue of you paying a discounted price for the state funded meds (or nothing at all).
My very vague impression is that a lot of the tax differences are because rather than simply subsidizing some things, or paying for them directly, the US gov lets you reduce your taxes at the end of year instead. There are many problems with this (and this policy is applied to things other than just medication) approach where "make this manageable" is wrapped up into tax returns rather than just being handled at PoS. But to be clear this is a very general impression I've developed, and it's certainly not something I'd be willing to say "this is absolutely there state of the world" about, as I left NZ before I really had professional (e.g. not near zero :D) income and I've not personally had any medication, treatment, etc the the US gov has carve outs for.
For example, the US apparently includes deductions to compensate for money spent on special classes of medication (based on comments in these threads), but in countries with functional healthcare systems that's handled by virtue of you paying a discounted price for the state funded meds (or nothing at all).
My very vague impression is that a lot of the tax differences are because rather than simply subsidizing some things, or paying for them directly, the US gov lets you reduce your taxes at the end of year instead. There are many problems with this (and this policy is applied to things other than just medication) approach where "make this manageable" is wrapped up into tax returns rather than just being handled at PoS. But to be clear this is a very general impression I've developed, and it's certainly not something I'd be willing to say "this is absolutely there state of the world" about, as I left NZ before I really had professional (e.g. not near zero :D) income and I've not personally had any medication, treatment, etc the the US gov has carve outs for.
Sure, but these sorts of questions are a one- or two-page web form that people could fill out on the IRS's web site, click Submit, and wait a few seconds for that information to be used (along with all the rest of the info the IRS has) to fill in their return.
For some of this stuff (like number of dependents or being blind), it would remember what you said last year, pre-fill, and let you edit (like if you had another kid, or if one aged out of being a dependent).
And this is the thing that annoys the shit out of me about all the naysayers like yourself about automating this stuff. It does not have to be 100% automated! Even 50% would be valuable, but for the majority of taxpayers I expect it would be close to 100%, with the average level of automation in the 80%-range (or even better; I'm being conservative with my guesses here). That would save people so much time and so much money, and it would absolutely destroy the revenue of the greedy, make-work tax-prep industry, which is fantastic.
You mention looking at 1040 to make this determination, but I look at it from looking at the TurboTax or TaxAct prompts. The vast majority of what I'd have to do on TurboAct (I use a CPA now, but used to use TaxAct) is either a) verifying that last year's information hasn't changed, or b) uploading or manually typing in data from documents that the IRS already has. I would gladly let the IRS do that all for me, and give me the opportunity to do the 10% or 20% of the work that the IRS can't automate. I wouldn't need a CPA anymore, for one thing, and I could knock out my taxes in under an hour, and feel confident that they're correct, much more so than if I were to try to do them 100% myself now.
For some of this stuff (like number of dependents or being blind), it would remember what you said last year, pre-fill, and let you edit (like if you had another kid, or if one aged out of being a dependent).
And this is the thing that annoys the shit out of me about all the naysayers like yourself about automating this stuff. It does not have to be 100% automated! Even 50% would be valuable, but for the majority of taxpayers I expect it would be close to 100%, with the average level of automation in the 80%-range (or even better; I'm being conservative with my guesses here). That would save people so much time and so much money, and it would absolutely destroy the revenue of the greedy, make-work tax-prep industry, which is fantastic.
You mention looking at 1040 to make this determination, but I look at it from looking at the TurboTax or TaxAct prompts. The vast majority of what I'd have to do on TurboAct (I use a CPA now, but used to use TaxAct) is either a) verifying that last year's information hasn't changed, or b) uploading or manually typing in data from documents that the IRS already has. I would gladly let the IRS do that all for me, and give me the opportunity to do the 10% or 20% of the work that the IRS can't automate. I wouldn't need a CPA anymore, for one thing, and I could knock out my taxes in under an hour, and feel confident that they're correct, much more so than if I were to try to do them 100% myself now.
OK, so now take all those examples I gave and multiple them by 10 if you have an even slightly complex tax return. Calculate your own RSU tax basis, track whether or not you're eligible for a Roth IRA contribution based on a 5-factor test, etc, etc.
Kinda sounds like what I'm already doing now. Sure, a nice slick government interface instead of TurboTax would be nice, but let's not kid ourselves that the work load would suddenly drop to something negligible.
You say I'm a "naysayer", I say I'm just being realistic based on how complex the tax code is.
Kinda sounds like what I'm already doing now. Sure, a nice slick government interface instead of TurboTax would be nice, but let's not kid ourselves that the work load would suddenly drop to something negligible.
You say I'm a "naysayer", I say I'm just being realistic based on how complex the tax code is.
> The majority of people who couldn’t be handled automatically currently are that way pretty much entirely due to corporate lobbying.
You're replying to the wrong comment. This is about the people who are not in that 60 million.
You're replying to the wrong comment. This is about the people who are not in that 60 million.
No, when your RSUs are granted the trading company is told the effective cost basis, which is included in the tax docs they provide you and the IRS.
But yes, the US tax code is absurdly complicated. A significant part of that is the result of lobbying by the likes of H&R Block, etc - because their business model depends on people being functionally forced to use tax prep companies.
But yes, the US tax code is absurdly complicated. A significant part of that is the result of lobbying by the likes of H&R Block, etc - because their business model depends on people being functionally forced to use tax prep companies.
I don't think that's always correct. Quoting from the cost basis portion of one of my combined 1099 packets:
> Note: This information is not reported to the IRS. It may assist you in tax return preparation.
They give me a 1099B that's all zero cost basis, then in a different part of the paperwork bearing that disclaimer give me a "supplemental" 1099B that includes cost basis. Dunno why, but the CPA I asked said it was all above-board and to calculate cost basis off of the supplemental info.
> Note: This information is not reported to the IRS. It may assist you in tax return preparation.
They give me a 1099B that's all zero cost basis, then in a different part of the paperwork bearing that disclaimer give me a "supplemental" 1099B that includes cost basis. Dunno why, but the CPA I asked said it was all above-board and to calculate cost basis off of the supplemental info.
The cost basis for my RSUs is not reported to the IRS.
There was no corporate lobbying behind that, just bad tax code that doesn't force brokers to report it.
There was no corporate lobbying behind that, just bad tax code that doesn't force brokers to report it.
Huh, I'm fairly sure the IRS isn't just blindly trusting what people report as the cost basis, but maybe that only comes up during audits.
But you understand that a lot of the documented reasons the tax code is bad, is lobbying by the tax prep industry, right? Their business model is built on it being more dangerous to do taxes yourself, than to pay them $50+, so they lobby against simplifications to the tax system, and similarly lobby to support laws that increase penalties, and ensure that new reductions aren't automatic.
But you understand that a lot of the documented reasons the tax code is bad, is lobbying by the tax prep industry, right? Their business model is built on it being more dangerous to do taxes yourself, than to pay them $50+, so they lobby against simplifications to the tax system, and similarly lobby to support laws that increase penalties, and ensure that new reductions aren't automatic.
The IRS does trust your cost basis, but I have no doubt there is some backend check that flags things that are wildly off of what is expected.
But I don't think the tax prep industry lobbied for how RSUs cost-basis is captured. That's just a byproduct of the US tax code and requirements for reporting on 1099s from brokerages.
But I don't think the tax prep industry lobbied for how RSUs cost-basis is captured. That's just a byproduct of the US tax code and requirements for reporting on 1099s from brokerages.
> A good example is cost-basis for RSUs. I have to calculate that myself or i get taxed with a cost-basis of $0.
I've often wondered why this is the case. My brokerage that handled the RSU grant knows the FMV of the shares on the vest dates. They even provide separate documents listing them all. Why don't they just set the cost basis properly? I assume there's some legal reason, but laws can be changed.
But I think you vastly overestimate the number of people in the US who are in this boat. And even for those of us who have been in that boat, getting 80% of my taxes automated would be very valuable to me, even if I still had to manually adjust those cost bases.
And the reason I can't have that is absolutely due to corporate lobbying and Grover Norquist.
I've often wondered why this is the case. My brokerage that handled the RSU grant knows the FMV of the shares on the vest dates. They even provide separate documents listing them all. Why don't they just set the cost basis properly? I assume there's some legal reason, but laws can be changed.
But I think you vastly overestimate the number of people in the US who are in this boat. And even for those of us who have been in that boat, getting 80% of my taxes automated would be very valuable to me, even if I still had to manually adjust those cost bases.
And the reason I can't have that is absolutely due to corporate lobbying and Grover Norquist.
Where do you think that complexity comes from? Everyone loves a tax exemption for their industry.
Yeah... no. Corporations didn't lobby the IRS to make the 1099B cost-basis wrong on employee stock options. They didn't lobby the IRS to make ISO/AMT calculus practically impossible.
There a LOT of things that are enormously difficult through the neglect or apathy of the tax authorities, not because some faceless corporation demanded it.
There a LOT of things that are enormously difficult through the neglect or apathy of the tax authorities, not because some faceless corporation demanded it.
> Corporations didn't lobby the IRS to make the 1099B cost-basis wrong on employee stock options. They didn't lobby the IRS to make ISO/AMT calculus practically impossible.
They absolutely did. The reason that stuff is so complex is companies want to be able to give stock options at artificially low values so that their employees can defer or avoid paying taxes on them.
They absolutely did. The reason that stuff is so complex is companies want to be able to give stock options at artificially low values so that their employees can defer or avoid paying taxes on them.
I think "corporations" there is referring to the tax-prep lobby, not to random companies who want to give their employees equity comp in tax-advantaged ways.
I don't think Intuit and their ilk specifically lobbied to make it so brokerage firms didn't have to report adjusted/correct cost bases to the IRS for these sorts of things. But they have certainly lobbied to keep the IRS from doing our taxes for us. They're not the only problem in that regard, but they're a significant one.
I don't think Intuit and their ilk specifically lobbied to make it so brokerage firms didn't have to report adjusted/correct cost bases to the IRS for these sorts of things. But they have certainly lobbied to keep the IRS from doing our taxes for us. They're not the only problem in that regard, but they're a significant one.
The first year I lived in Ireland I was baffled that I could do my taxes by going online and clicking a single button. I was paranoid I was missing something.
Nope. It was that simple.
Nope. It was that simple.
There are also Americans whose taxes are so complicated that not even the most expensive accountants know what the answers are. The system is broken on both ends.
Doesn't Australia do it automatically for most of the people, you just have to check the numbers and if they are correct just submit.
Yep, log onto govt website, check what they've prefilled (based on reporting requirements by your employer, which covers the vast majority of people), put in any deductions, submit. I was shocked to learn this isn't the norm.
Yeah the real work is trying to make a line ball debt into a either a zero bill or slight positive. The e-tax prefill doesn't do any deductions so if you're lazy it's a great way for the government to scrape a few extra dollars back.
Same in Chile
yep. same in UK i believe.
No, in the UK the vast majority of individuals never fill in a tax form in their whole life, not even a pre filled one.
The UK uses the PAYE (Pay as you earn) system whereby the employer withholds tax from your wage on your behalf and pays it to the government automatically. There’s no “pre filled form” to check. It’s just paid already. At the end of each tax year you get a P60 slip telling you how much you earned and paid in total. Sometimes HMRC writes to you tell you oops you paid too much, here’s a refund.
If you have more complex tax affairs you can request to do Self Assessment and fill in a form each year.
The UK uses the PAYE (Pay as you earn) system whereby the employer withholds tax from your wage on your behalf and pays it to the government automatically. There’s no “pre filled form” to check. It’s just paid already. At the end of each tax year you get a P60 slip telling you how much you earned and paid in total. Sometimes HMRC writes to you tell you oops you paid too much, here’s a refund.
If you have more complex tax affairs you can request to do Self Assessment and fill in a form each year.
Yeah this is one of the things the UK actually gets right. If you end up overpaying for the year it ends up getting sent back to you automatically as a cheque or bank transfer about 6 months after the end of the tax year. Some people aren’t happy that you have to wait that long though e.g a year and a half if you overpay tax in the first month of the tax year.
South Africa also uses PAYE. The South African Revenue Service (SARS) is one of the best run government agencies, so it works pretty well whether it's automatic or if you do self assessment.
i stand corrected. this is still 100x better than what we do in the U.S.
More than once I've had the IRS settle up years later. Either checks or bills. They 100% know the correct amount. We just go through the song & dance due to Intuit's presence.
Someone should organize a movement where these 60 million Americans refuse to file taxes in protest so lawmakers and the IRS are forced to update the law. The way taxes should work is you get a letter with your tax information for verification, and you mail it back as confirmation. Death to paperwork and the TurboTax industry stranglehold. Automate this bullshit away.
I've been reading about how crappy our government is my entire life and barely anything changes or improves. Realistically, things are getting worse, more expensive, and I don't see anyone who really votes for things not on an emotional level so we don't ever address real problems. I don't think anything will change about this for another 20 years.
Well if you read https://peterturchin.com/cliodynamica/ he is saying that we are in the "Turbulent Twenties" and compared to the recent past there is significant political and social upheaval. Essentially the US is in a "chaotic period" where a spark could start a civil war or government collapse.
But on an absolute scale, though, I guess this trend is easy to miss. The riots have only involved a few thousand people, and they haven't been incredibly violent or anything, a few people dead but not a lot. If you don't follow the news closely you could probably miss everything but the Capitol riot.
But on an absolute scale, though, I guess this trend is easy to miss. The riots have only involved a few thousand people, and they haven't been incredibly violent or anything, a few people dead but not a lot. If you don't follow the news closely you could probably miss everything but the Capitol riot.
> [The riots] haven't been incredibly violent or anything, a few people dead but not a lot.
This is unimaginable to me. I can only speak for Germany here, but there was a single death[1] in the last 25 years on a protests. I'm so sorry for everyone living in America.
[1] https://de.wikipedia.org/wiki/Liste_von_Todesopfern_bei_Demo... ( excluding accidents )
This is unimaginable to me. I can only speak for Germany here, but there was a single death[1] in the last 25 years on a protests. I'm so sorry for everyone living in America.
[1] https://de.wikipedia.org/wiki/Liste_von_Todesopfern_bei_Demo... ( excluding accidents )
99.9% of people won't do anything so long as the tele and McDonalds is available.
We've actually known this for decades and Intuit has hard lobbied and prevented sensible laws being passed and killed (so far) a "government option" tax filing website.
I've always thought they were on borrowed time for TurboTax but here we are 10-15 years later and nothing at all has changed.
I've always thought they were on borrowed time for TurboTax but here we are 10-15 years later and nothing at all has changed.
Taxes have not improved, not because the IRS hasn't had the budget, but because H&R Block, TurboTax, et. al. have successfully lobbied against improving it over and over. They were supposed to make it easier for everyone to file taxes, and instead.. we have what we have today.
Isn’t the IRS doing everyone’s taxes automatically, or they’d not know if people try cheating?
It's statistical. They are not calculating everyones taxes, they are saying "well you act like a duck and quack like a duck earning this much, is what your paid/what you purchased within some confidence interval of normal?" No? audit.
Do you have actual knowledge that it's statistical, or are you just guessing? Because the IRS absolutely does have all the data they need to perfectly fill in most people's tax returns. Sure, having that data doesn't mean they've done the work to be able to do things with that data, but it's not hard to imagine they have a system to calculate everyone's taxes, given the data at hand.
Where is the IRS getting data on my purchases?
real estate property, form 8300 (say for car purchases in cash)
unclear to me if 1099-k could be used to track purchases. I'd guess if you're audited perhaps credit card records.
unclear to me if 1099-k could be used to track purchases. I'd guess if you're audited perhaps credit card records.
In the future, from FedNow maybe, a federal payment processor proposal, meaning they could track everything. (gotta feed the big government tumor?)
https://www.federalreserve.gov/newsevents/pressreleases/othe...
https://www.federalreserve.gov/newsevents/pressreleases/othe...
But gov won't tell you the correct number, they only tell you when you do it wrong and they want to fine you. lol
Right, that's kind of the point of the article. The government should tell us that number with a pre-filled form. Then we can either accept it as is, or make whatever corrections are necessary.
In Taiwan, this is how it currently works. It used to be like US and you need to fill everything manually. But now you only need auth your id card into gov website, fill additional reduction that is not on list and click accept. Probably just a 15 min task.
I guess it is also possible for US to do this if they are ever willing to?
I guess it is also possible for US to do this if they are ever willing to?
Work both ways: last year I got a letter notifying me I was wrong about my taxes, and that a refund to me is due.
[deleted]
I wonder why only 60MM?
In France where this is the norm I guess that 90% of people do not modify they pre-filled declaration.
Starting from this year, if you do not do anything the taxes are automatically filed for you.
In France where this is the norm I guess that 90% of people do not modify they pre-filled declaration.
Starting from this year, if you do not do anything the taxes are automatically filed for you.
Similar in Poland. It's not automatic, but there is a neat and modern webapp and you confirm with 4-5 clicks (including login).
Since the app is mobile friendly, me and my friends did our yearly taxes during a party recently, while discussing how awesome their ux is - took each one of us literally 2 minutes :)
Since the app is mobile friendly, me and my friends did our yearly taxes during a party recently, while discussing how awesome their ux is - took each one of us literally 2 minutes :)
The article clarifies later this is not 60 million people, but "62 million tax units, could have accurate returns pre-prepared by the IRS in this fashion. (A tax unit could be a single person, a single parent-headed family, a married couple and their offspring, etc. — whoever’s represented by the tax return.)"
So, quite a bit more than 60 million people.
So, quite a bit more than 60 million people.
Ah, thank you for the clarification.
This is still twice less than in France (relatively), I wonder if the "reference" payer is different (a normal job, simple family - the kind of situation easy to pre-fill in the system).
This is still twice less than in France (relatively), I wonder if the "reference" payer is different (a normal job, simple family - the kind of situation easy to pre-fill in the system).
I'm no tax expert but I think the Australian tax department automates much of the tax collection and companies are obligated to meet fairly stringent payment requirements as they go. All of which maximises tax receipts. Seems odd that the Americans leave much of it as a self service system.
Most salaried employees do almost nothing to manage their tax.
Most salaried employees do almost nothing to manage their tax.
This is how it's done in many countries - if you like 80% of the population, you don't need to file taxes as your HR essentially has done that for you. Or if you are retired and like 80% of the other retired people, you don't have to file taxes either.
I just don't understand why some president hasn't done this. It would be hugely popular.
A presidential candidate once tried to simplify the tax system so much that it can be explained in one sentence: 9% flat personal income tax, 9% federal sales tax, 9% corporate income tax.
I didn't even agree with the candidate's rest of the policies but it was refreshing.
I didn't even agree with the candidate's rest of the policies but it was refreshing.
Shhhh. Dont let intuit see this post. They will go apeshit.
This feels like such a no brainer in terms of reducing resource burden on the IRS, it's shocking that it hasn't yet been done.
[deleted]
If you want to ease into UBI a good place to start is just eliminating all income taxes below a certain income, say $40k to start.
This is from 2022, almost a full year ago.
The tax code will change to take care of that 60m! (So it can’t be done automatically)
Intuit: over my dead body!
I'm struggling to see the profit potential in this.
I wouldn't call it a profit, but the IRS has little to no incentive to minimize the tax burden on the tax payer, so there is a potential for them to reduce deductions and increase their collections.
Private tax preparation companies lobby to keep the IRS from doing it automatically.
https://www.propublica.org/article/inside-turbotax-20-year-f...
This is a common misconception. The mission of the IRS is to collect taxes and enforce the tax code. They don't make the rules and cannot make you pay more than you legally owe. An audit can just as well prove that you paid too much tax as you paid too little. It just so happens that there are far more people looking to skirt their full tax liability then people who mistakenly overpay. I did the latter once and got a check in the mail a few months later for the overage.
Where is the incentive for the IRS to help you to reduce the total amount owed during the filing process?
There's a difference between just asking, "Does your business have any expenses? Okay, what are those?" and actively pursuing the deductions a tax payer may be eligible for.
A tax preparer has every incentive to help a tax payer find the correct and legal deductions. Nowhere in my comment did I say anything about changing the rules or paying more than someone owes. Not sure why this bad faith reading of the comment is so prevalent?
There's a difference between just asking, "Does your business have any expenses? Okay, what are those?" and actively pursuing the deductions a tax payer may be eligible for.
A tax preparer has every incentive to help a tax payer find the correct and legal deductions. Nowhere in my comment did I say anything about changing the rules or paying more than someone owes. Not sure why this bad faith reading of the comment is so prevalent?
Wow, that never occurred to me and I hope most civil servants genuinely do not think in terms of trying to line the pockets of the federal government as if it exists as a separate entity in its own right and not merely a means to make a functional country of which Americans, presumably including most civil servants, are citizens and theoretically would like it to be an economically healthy country that can pay government employees, cover the cost of services etc but there really shouldn't be a profit motive.
It probably didn't occur to you because it's a bit of an absurd idea. IRS employees have zero incentive to somehow twist the tax code into getting you to pay more than you owe. They don't get commissions or bonuses based on collecting more taxes or penalties.
Regardless, I think the GP poster doesn't understand what the IRS is empowered to do. They just enforce the tax code; they aren't allowed to change it.
Regardless, I think the GP poster doesn't understand what the IRS is empowered to do. They just enforce the tax code; they aren't allowed to change it.
From working and talking to folks at the IRS, the have much more first hand knowledge of how the federal government fails in spectacular ways (try going through the hiring process). They lament the government and it’s problems more than any other population in America.
There's a false dichotomy here. The claim isn't that IRS officers would individually increase collections via incentives like a commissioned salesman. It is that tax accountants do have an incentive to reduce their client's overall tax burden. I hope you can appreciate this distinction. Take care.
[deleted]
But then, what would instill the fear of government authority in them?
All taxes are so simple as to be computational and therefore susceptible to automation
Anyone who says otherwise is corrupt
Anyone who says otherwise is corrupt
I am not corrupt and I say otherwise. The US tax code has a massive amount of complexity and tons of corner cases and grey areas. I wish that were not the case but politics being politics, here we are.
"Susceptible to automation" doesn't mean that it's required that it's done without a manual fixup and approval step. You can absolutely automate the US tax code, and generate perfectly-correct tax returns for a majority of the people who have to file. Automation doesn't have to be perfect for everyone, though, in order to be worhtwhile; it just has to reduce the work people have to do.
Even if it couldn't produce a perfect tax return for me, it would still be much easier if all I had to do was (for example), click a few buttons to upload a few tax-deductible donation receipts, enter in the amounts, read through the rest of the return, and click "Accept".
Even if it couldn't produce a perfect tax return for me, it would still be much easier if all I had to do was (for example), click a few buttons to upload a few tax-deductible donation receipts, enter in the amounts, read through the rest of the return, and click "Accept".
It is true, however, when you are an employee and don't have any side dealings (like freelancing or trading stocks).
Oh absolutely – it just does not extend to every single taxpayer.
Sure, but the vast majority of taxpayers just have W-2 income, and that's it. Even for many of those who have more, it still can be done automatically (1099nec, 1099misc, 1099r, 1099b, 1099div, 1099int, etc. are all filed with the IRS already).
Even if 20% of taxpayers still had to do their own returns from scratch -- which almost certainly would not be the case; virtually no one would have to do them from scratch -- automating it for the 80% would still be incredibly valuable. Even with a manual check/amend/approve step. It would save taxpayers tons of time and billions of dollars of tax-prep fees.
Even if 20% of taxpayers still had to do their own returns from scratch -- which almost certainly would not be the case; virtually no one would have to do them from scratch -- automating it for the 80% would still be incredibly valuable. Even with a manual check/amend/approve step. It would save taxpayers tons of time and billions of dollars of tax-prep fees.
Did you know you can deduct sales tax. Even on cash transactions. How would you automate sales tax deductions for cash transactions? I always deduct sales tax, because it saves me hundreds of dollars. I always pay cash and ask for receipts from small businesses because paying cash helps them avoid the VISA fee and helps pad their margin. This is one of a dozen things I do on my taxes that I don't see any path forward for automation.
It's not that it's impossible to automate, but do we really want virtually every transaction going to at least 1 state and the federal government. Do we really want every transaction to have both parties identified? I'd rather keep the option of financial privacy open and just do a few hours of paper work every year.
It's not that it's impossible to automate, but do we really want virtually every transaction going to at least 1 state and the federal government. Do we really want every transaction to have both parties identified? I'd rather keep the option of financial privacy open and just do a few hours of paper work every year.
Ok, so the very small percentage of people who take sales tax deduction would have to do that manually, but the rest of their tax return would still be filled in automatically, saving them time and money.
(At any rate, the sales tax deduction is much less useful now with the $10k SALT deduction cap, as well as the increase in the standard deduction. Even if you manage to deduct $10k in sales+property taxes -- deducting state income taxes is disallowed if you deduct state sales tax -- you still need another $2k of deductions to make pass the standard deduction threshold... and that's if you're not married. It's even less useful if you file jointly. Annoyingly, the SALT cap isn't doubled for joint filers. I really hope it expires without extension in 2025...)
(At any rate, the sales tax deduction is much less useful now with the $10k SALT deduction cap, as well as the increase in the standard deduction. Even if you manage to deduct $10k in sales+property taxes -- deducting state income taxes is disallowed if you deduct state sales tax -- you still need another $2k of deductions to make pass the standard deduction threshold... and that's if you're not married. It's even less useful if you file jointly. Annoyingly, the SALT cap isn't doubled for joint filers. I really hope it expires without extension in 2025...)
(This relates to US taxes only)
This very likely does not make a difference on your total tax bill, especially now that other deductions are limited (like mortgage interest).
Also, even if sales tax paid did make a difference on your tax paid, there is a simple calculator that estimates your sales tax paid that you can use instead of summing sales tax over all transactions.
If you want to play around with different scenarios, I recommend you try the tool "Excel1040" [1]. It is free but consider a donation. Works great in LibreOffice Calc but pay attention to the loading instructions.
[1] https://sites.google.com/site/excel1040/home
This very likely does not make a difference on your total tax bill, especially now that other deductions are limited (like mortgage interest).
Also, even if sales tax paid did make a difference on your tax paid, there is a simple calculator that estimates your sales tax paid that you can use instead of summing sales tax over all transactions.
If you want to play around with different scenarios, I recommend you try the tool "Excel1040" [1]. It is free but consider a donation. Works great in LibreOffice Calc but pay attention to the loading instructions.
[1] https://sites.google.com/site/excel1040/home
AFAIK you can only deduct sales tax or state income tax, not both. For most folks, income tax is typically higher.
Except for people that live in Florida or Texas which doesn't have state income tax. Two of the most populous states. Or 8 other states. It's not uncommon.
what is 'deduct sales tax' mean?
sorry, i am new to taxes. can you add more info?
is it something an individual can use?
Yes, in the US at least, you can deduct state and local taxes from your taxable income. Most people use it to deduct state/local income and property taxes, but you can also deduct the amount of any sales tax paid. (Since 2017, though, there's a $10,000 cap on the total amount of state and local taxes you can deduct. This cap will fortunately expire in 2025 if -- fingers crossed -- it's not renewed.)
The caveat is that if you deduct sales tax, you are then not allowed to deduct state/local income tax. And of course it can be quite a bit more work to keep track of all the sales tax you pay in a year, vs. income tax.
The caveat is that if you deduct sales tax, you are then not allowed to deduct state/local income tax. And of course it can be quite a bit more work to keep track of all the sales tax you pay in a year, vs. income tax.
What about itemized deductions? How can you automate that?
Some of them you can. Tax-exempt orgs that take tax-deductible donations will usually give you a donation receipt. It wouldn't be unreasonable to require that they also fire off a copy (well, in a standardized form) to the IRS as well. Mortgage lenders already send a standardized form 1098 for the mortgage interest deduction.
Things like out-of-pocket medical expenses and business expenses would have to be done manually. But that's fine! Automating 80% of the work is still better than automating none of it. And it would be 100% for the people who don't itemize (which, as I understand it, is the vast majority).
Things like out-of-pocket medical expenses and business expenses would have to be done manually. But that's fine! Automating 80% of the work is still better than automating none of it. And it would be 100% for the people who don't itemize (which, as I understand it, is the vast majority).
The number of people that itemize has dropped significantly after the 2017 tax changes. A quick search shows that it used to be around 30% of filers itemized, now it's 11%.
It would be easy for the government to send you its automatic, non-itemized calculations and give you the option of itemizing.
It would be easy for the government to send you its automatic, non-itemized calculations and give you the option of itemizing.
1101010010(1)
Uh oh.
Lobbyists begin chipping away at Biden’s $80B IRS overhaul - https://news.ycombinator.com/item?id=35381701 - March 2023 (214 comments)
Intuit pouring money into lobbying amid push for free government-run tax filing - https://news.ycombinator.com/item?id=34840039 - Feb 2023 (178 comments)
IRS builds task force to explore running its own free e-file system - https://news.ycombinator.com/item?id=34764952 - Feb 2023 (199 comments)
IRS Free File: Do Your Taxes for Free - https://news.ycombinator.com/item?id=34462122 - Jan 2023 (247 comments)
IRS will look into setting up a free e-filing system - https://news.ycombinator.com/item?id=32753099 - Sept 2022 (408 comments)
The IRS could be on the verge of changing the way Americans file their taxes - https://news.ycombinator.com/item?id=32550841 - Aug 2022 (17 comments)
IRS will study free tax filing options - https://news.ycombinator.com/item?id=32502321 - Aug 2022 (25 comments)
TurboTax’s fight against free tax filing - https://news.ycombinator.com/item?id=31072202 - April 2022 (394 comments)
Filing taxes could be free & simple. H&R Block & Intuit lobby against it (2017) - https://news.ycombinator.com/item?id=30856968 - March 2022 (114 comments)
FTC sues Intuit for its deceptive TurboTax “free” filing campaign - https://news.ycombinator.com/item?id=30846071 - March 2022 (587 comments)
Ask HN: How does TurboTax get away with dark patterns? - https://news.ycombinator.com/item?id=30409523 - Feb 2022 (122 comments)
Why do Americans have to pay much to file their tax returns when the IRS knows? - https://news.ycombinator.com/item?id=30267361 - Feb 2022 (22 comments)
Filing Taxes Could Be Free and Simple. But H&R Block and Intuit Lobby Against It (2017) - https://news.ycombinator.com/item?id=30185484 - Feb 2022 (18 comments)
California tried to save the nation from tax filing, then Intuit stepped in - https://news.ycombinator.com/item?id=28944200 - Oct 2021 (283 comments)
The IRS has a big opportunity to fix the way Americans file taxes - https://news.ycombinator.com/item?id=28177289 - Aug 2021 (12 comments)
UsTaxes – open-source tax filing web application - https://news.ycombinator.com/item?id=27998452 - July 2021 (53 comments)
Good Riddance, TurboTax. Americans Need a Real ‘Free File’ Program - https://news.ycombinator.com/item?id=27902380 - July 2021 (248 comments)
Intuit will no longer be a part of IRS Free File program - https://news.ycombinator.com/item?id=27865625 - July 2021 (140 comments)
Killing TurboTax - https://news.ycombinator.com/item?id=26330584 - March 2021 (662 comments)
Show HN: ustaxes.org – open-source tax filing webapp - https://news.ycombinator.com/item?id=26138446 - Feb 2021 (219 comments)
TurboTax Tricked You into Paying to File Your Taxes (2019) - https://news.ycombinator.com/item?id=26102695 - Feb 2021 (306 comments)
TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free (2019) - https://news.ycombinator.com/item?id=26060414 - Feb 2021 (199 comments)
FTC Is Investigating Intuit over TurboTax Practices - https://news.ycombinator.com/item?id=24409093 - Sept 2020 (194 comments)
IRS stops firms like TurboTax from hiding free tax-filing products in searches - https://news.ycombinator.com/item?id=21948935 - Jan 2020 (25 comments)
IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax - https://news.ycombinator.com/item?id=21923220 - Dec 2019 (448 comments)
IRS Tried to Hide Emails That Show Tax Industry Influence over Free File Program - https://news.ycombinator.com/item?id=21393758 - Oct 2019 (188 comments)
TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free - https://news.ycombinator.com/item?id=21281411 - Oct 2019 (447 comments)
TurboTax to charge more lower-income customers - https://news.ycombinator.com/item?id=20461169 - July 2019 (81 comments)
Congress Scraps Provision to Restrict IRS from Competing with TurboTax - https://news.ycombinator.com/item?id=20119916 - June 2019 (18 comments)
TurboTax Uses a “Military Discount” to Trick Troops into Paying to File Taxes - https://news.ycombinator.com/item?id=19994118 - May 2019 (42 comments)
Listen to TurboTax Lie to Get Out of Refunding Overcharged Customers - https://news.ycombinator.com/item?id=19870242 - May 2019 (44 comments)
TurboTax and H&R Block Saw Free Tax Filing as a Threat - https://news.ycombinator.com/item?id=19810981 - May 2019 (143 comments)
TurboTax Hides Its Free File Page from Search Engines - https://news.ycombinator.com/item?id=19758126 - April 2019 (262 comments)
TurboTax Uses Dark Patterns to Trick You into Paying to File Your Taxes - https://news.ycombinator.com/item?id=19718284 - April 2019 (274 comments)
Congress Is About to Ban the US Government from Offering Free Online Tax Filing - https://news.ycombinator.com/item?id=19613725 - April 2019 (696 comments)
Filing Your Taxes Is an Expensive Time Sink. That’s Not an Accident - https://news.ycombinator.com/item?id=19572917 - April 2019 (155 comments)
How the Maker of TurboTax Fought Free, Simple Tax Filing (2013) - https://news.ycombinator.com/item?id=19392673 - March 2019 (253 comments)
H&R Block and Intuit Lobby Against Free and Simple Tax Filing (2017) - https://news.ycombinator.com/item?id=18956883 - Jan 2019 (190 comments)
Would You Let the I.R.S. Prepare Your Taxes? (2015) - https://news.ycombinator.com/item?id=17751383 - Aug 2018 (424 comments)
IRS electronic filing system breaks down hours before midnight deadline - https://news.ycombinator.com/item?id=16860086 - April 2018 (97 comments)
Why I'm boycotting TurboTax this year - https://news.ycombinator.com/item?id=16844458 - April 2018 (23 comments)
H&R Block and Intuit Lobbying Against Simpler Tax Filing (2017) - https://news.ycombinator.com/item?id=16841449 - April 2018 (232 comments)
Stanford Professor Loses Political Battle To Simplify Tax Filing Process - https://news.ycombinator.com/item?id=13990391 - March 2017 (386 comments)
H&R Block and Intuit Are Lobbying Against Making Tax Filling Free and Easy - https://news.ycombinator.com/item?id=13922482 - March 2017 (234 comments)
How the Maker of TurboTax Fought Free, Simple Tax Filing (2013) - https://news.ycombinator.com/item?id=13853150 - March 2017 (439 comments)
US Senator Warren Introduces Bill to Simplify Tax Filing - https://news.ycombinator.com/item?id=11492025 - April 2016 (155 comments)
TurboTax Takes Aim at Smaller Rival in Fight for Filers - https://news.ycombinator.com/item?id=11150694 - Feb 2016 (87 comments)
Would You Let the I.R.S. Prepare Your Taxes? - https://news.ycombinator.com/item?id=9381437 - April 2015 (150 comments)
Would You Let the I.R.S. Prepare Your Taxes? - https://news.ycombinator.com/item?id=9380232 - April 2015 (124 comments)
TurboTax Maker Intuit Funnels Millions to Lobby Against Easier Tax Returns - https://news.ycombinator.com/item?id=7595440 - April 2014 (182 comments)
Filing taxes: It shouldn't be so hard - https://news.ycombinator.com/item?id=5488084 - April 2013 (56 comments)
How the Maker of TurboTax Fought Free, Simple Tax Filing - https://news.ycombinator.com/item?id=5443203 - March 2013 (330 comments)
Intuit lobbies against California's free tax filing service - https://news.ycombinator.com/item?id=1569169 - Aug 2010 (29 comments)
Lobbyists begin chipping away at Biden’s $80B IRS overhaul - https://news.ycombinator.com/item?id=35381701 - March 2023 (214 comments)
Intuit pouring money into lobbying amid push for free government-run tax filing - https://news.ycombinator.com/item?id=34840039 - Feb 2023 (178 comments)
IRS builds task force to explore running its own free e-file system - https://news.ycombinator.com/item?id=34764952 - Feb 2023 (199 comments)
IRS Free File: Do Your Taxes for Free - https://news.ycombinator.com/item?id=34462122 - Jan 2023 (247 comments)
IRS will look into setting up a free e-filing system - https://news.ycombinator.com/item?id=32753099 - Sept 2022 (408 comments)
The IRS could be on the verge of changing the way Americans file their taxes - https://news.ycombinator.com/item?id=32550841 - Aug 2022 (17 comments)
IRS will study free tax filing options - https://news.ycombinator.com/item?id=32502321 - Aug 2022 (25 comments)
TurboTax’s fight against free tax filing - https://news.ycombinator.com/item?id=31072202 - April 2022 (394 comments)
Filing taxes could be free & simple. H&R Block & Intuit lobby against it (2017) - https://news.ycombinator.com/item?id=30856968 - March 2022 (114 comments)
FTC sues Intuit for its deceptive TurboTax “free” filing campaign - https://news.ycombinator.com/item?id=30846071 - March 2022 (587 comments)
Ask HN: How does TurboTax get away with dark patterns? - https://news.ycombinator.com/item?id=30409523 - Feb 2022 (122 comments)
Why do Americans have to pay much to file their tax returns when the IRS knows? - https://news.ycombinator.com/item?id=30267361 - Feb 2022 (22 comments)
Filing Taxes Could Be Free and Simple. But H&R Block and Intuit Lobby Against It (2017) - https://news.ycombinator.com/item?id=30185484 - Feb 2022 (18 comments)
California tried to save the nation from tax filing, then Intuit stepped in - https://news.ycombinator.com/item?id=28944200 - Oct 2021 (283 comments)
The IRS has a big opportunity to fix the way Americans file taxes - https://news.ycombinator.com/item?id=28177289 - Aug 2021 (12 comments)
UsTaxes – open-source tax filing web application - https://news.ycombinator.com/item?id=27998452 - July 2021 (53 comments)
Good Riddance, TurboTax. Americans Need a Real ‘Free File’ Program - https://news.ycombinator.com/item?id=27902380 - July 2021 (248 comments)
Intuit will no longer be a part of IRS Free File program - https://news.ycombinator.com/item?id=27865625 - July 2021 (140 comments)
Killing TurboTax - https://news.ycombinator.com/item?id=26330584 - March 2021 (662 comments)
Show HN: ustaxes.org – open-source tax filing webapp - https://news.ycombinator.com/item?id=26138446 - Feb 2021 (219 comments)
TurboTax Tricked You into Paying to File Your Taxes (2019) - https://news.ycombinator.com/item?id=26102695 - Feb 2021 (306 comments)
TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free (2019) - https://news.ycombinator.com/item?id=26060414 - Feb 2021 (199 comments)
FTC Is Investigating Intuit over TurboTax Practices - https://news.ycombinator.com/item?id=24409093 - Sept 2020 (194 comments)
IRS stops firms like TurboTax from hiding free tax-filing products in searches - https://news.ycombinator.com/item?id=21948935 - Jan 2020 (25 comments)
IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax - https://news.ycombinator.com/item?id=21923220 - Dec 2019 (448 comments)
IRS Tried to Hide Emails That Show Tax Industry Influence over Free File Program - https://news.ycombinator.com/item?id=21393758 - Oct 2019 (188 comments)
TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free - https://news.ycombinator.com/item?id=21281411 - Oct 2019 (447 comments)
TurboTax to charge more lower-income customers - https://news.ycombinator.com/item?id=20461169 - July 2019 (81 comments)
Congress Scraps Provision to Restrict IRS from Competing with TurboTax - https://news.ycombinator.com/item?id=20119916 - June 2019 (18 comments)
TurboTax Uses a “Military Discount” to Trick Troops into Paying to File Taxes - https://news.ycombinator.com/item?id=19994118 - May 2019 (42 comments)
Listen to TurboTax Lie to Get Out of Refunding Overcharged Customers - https://news.ycombinator.com/item?id=19870242 - May 2019 (44 comments)
TurboTax and H&R Block Saw Free Tax Filing as a Threat - https://news.ycombinator.com/item?id=19810981 - May 2019 (143 comments)
TurboTax Hides Its Free File Page from Search Engines - https://news.ycombinator.com/item?id=19758126 - April 2019 (262 comments)
TurboTax Uses Dark Patterns to Trick You into Paying to File Your Taxes - https://news.ycombinator.com/item?id=19718284 - April 2019 (274 comments)
Congress Is About to Ban the US Government from Offering Free Online Tax Filing - https://news.ycombinator.com/item?id=19613725 - April 2019 (696 comments)
Filing Your Taxes Is an Expensive Time Sink. That’s Not an Accident - https://news.ycombinator.com/item?id=19572917 - April 2019 (155 comments)
How the Maker of TurboTax Fought Free, Simple Tax Filing (2013) - https://news.ycombinator.com/item?id=19392673 - March 2019 (253 comments)
H&R Block and Intuit Lobby Against Free and Simple Tax Filing (2017) - https://news.ycombinator.com/item?id=18956883 - Jan 2019 (190 comments)
Would You Let the I.R.S. Prepare Your Taxes? (2015) - https://news.ycombinator.com/item?id=17751383 - Aug 2018 (424 comments)
IRS electronic filing system breaks down hours before midnight deadline - https://news.ycombinator.com/item?id=16860086 - April 2018 (97 comments)
Why I'm boycotting TurboTax this year - https://news.ycombinator.com/item?id=16844458 - April 2018 (23 comments)
H&R Block and Intuit Lobbying Against Simpler Tax Filing (2017) - https://news.ycombinator.com/item?id=16841449 - April 2018 (232 comments)
Stanford Professor Loses Political Battle To Simplify Tax Filing Process - https://news.ycombinator.com/item?id=13990391 - March 2017 (386 comments)
H&R Block and Intuit Are Lobbying Against Making Tax Filling Free and Easy - https://news.ycombinator.com/item?id=13922482 - March 2017 (234 comments)
How the Maker of TurboTax Fought Free, Simple Tax Filing (2013) - https://news.ycombinator.com/item?id=13853150 - March 2017 (439 comments)
US Senator Warren Introduces Bill to Simplify Tax Filing - https://news.ycombinator.com/item?id=11492025 - April 2016 (155 comments)
TurboTax Takes Aim at Smaller Rival in Fight for Filers - https://news.ycombinator.com/item?id=11150694 - Feb 2016 (87 comments)
Would You Let the I.R.S. Prepare Your Taxes? - https://news.ycombinator.com/item?id=9381437 - April 2015 (150 comments)
Would You Let the I.R.S. Prepare Your Taxes? - https://news.ycombinator.com/item?id=9380232 - April 2015 (124 comments)
TurboTax Maker Intuit Funnels Millions to Lobby Against Easier Tax Returns - https://news.ycombinator.com/item?id=7595440 - April 2014 (182 comments)
Filing taxes: It shouldn't be so hard - https://news.ycombinator.com/item?id=5488084 - April 2013 (56 comments)
How the Maker of TurboTax Fought Free, Simple Tax Filing - https://news.ycombinator.com/item?id=5443203 - March 2013 (330 comments)
Intuit lobbies against California's free tax filing service - https://news.ycombinator.com/item?id=1569169 - Aug 2010 (29 comments)
Why "uh oh"?
And ... how do you compile that? Or is there a saved-and-updated list that you keep handy?
And ... how do you compile that? Or is there a saved-and-updated list that you keep handy?
"Uh oh" because as I said in another comment, tax season is tax lobby rage season. The topic isn't unimportant but it probably gets more coverage than it deserves on HN.
Once I've built a list that long I tend to trust it as the tail, and then go searching for more recent cases to cons onto the head. I don't keep any of them handy, I just rely on HN Search to keep them handy for me.
Once I've built a list that long I tend to trust it as the tail, and then go searching for more recent cases to cons onto the head. I don't keep any of them handy, I just rely on HN Search to keep them handy for me.
Thanks.
So, HN search as in you find the most recent version in your own comment history, then update it for the current thread, is my read. I ... do that myself a fair bit.
I know it's a perennial, but I'd argue that the story is getting too little attention until its mooted by the change it advocates for.
So, HN search as in you find the most recent version in your own comment history, then update it for the current thread, is my read. I ... do that myself a fair bit.
I know it's a perennial, but I'd argue that the story is getting too little attention until its mooted by the change it advocates for.
lettergram(1)
I other words, 18% of the population.
This also means 82% do not fall under this category.
Obviously 60M sounds better than 18%, but horrible misrepresented title.
This also means 82% do not fall under this category.
Obviously 60M sounds better than 18%, but horrible misrepresented title.
It's 62 million households, not people.
41% of households. And that's their conservative estimate.
41% of households. And that's their conservative estimate.
Correct. The article’s title is horribly written though. After reading it, I had the same skepticism as the parent commenter.
The article does have the important facts that you summarized. Somebody screwed up with that terrible terrible title.
The article does have the important facts that you summarized. Somebody screwed up with that terrible terrible title.
It gets worse, the numbers on article’s summary of the paper do not even match the paper’s abstract. Not off by much, but these people are writing as if numbers are subject to stylistic reinterpretation.
You know what's horribly written? The tax law in America so that rent seeking entities like Intuit and HR Block can take advantage of people.
Let's overlook the terribly written article for a second here and focus on the real issue.
Let's overlook the terribly written article for a second here and focus on the real issue.
Read the title.
If you check out the article, it has some interesting stats about that. Turns out not everyone files taxes, and many people file together, so it's actually closer to half than 18%!
Filing taxes is good because it’s a reminder you pay taxes. Everyone who earns money should gave to go through this if only to remind you to hold government accountable. It’s not that taxes are bad, but that they should be justified.
A government that just does them for you might sound nice but in the end just makes people even more complacent and subdued. Every tax paying person should be conscious of this. A paycheck withholdings isn’t enough. It’s internalized too much. The yearly reckoning (and massive bill in a year you managed to have sone luck) is a great bit of clear headedness.
A government that just does them for you might sound nice but in the end just makes people even more complacent and subdued. Every tax paying person should be conscious of this. A paycheck withholdings isn’t enough. It’s internalized too much. The yearly reckoning (and massive bill in a year you managed to have sone luck) is a great bit of clear headedness.
"This annoyance which could be avoided by automation is necessary because suffering is good" is, to me, a very weak argument. I can look at my weekly paycheck to see taxes. If the IRS sent people a summary of their taxes with an option for amendments, people would see their taxes.
While this may be frowned on by HN rules, I don't believe any politician ever believed this rhetoric. At "best," they want to exacerbate the pain of taxes. It's the difference between pointing to a wound and shoving a finger in it.
While this may be frowned on by HN rules, I don't believe any politician ever believed this rhetoric. At "best," they want to exacerbate the pain of taxes. It's the difference between pointing to a wound and shoving a finger in it.
You still have to pay your taxes, including writing a check or getting a return at the end of the process. This just cuts out the billions of wasted hours of busywork along with the billions of dollars spent on unnecessary tax prep.
Plus, most people end up with a return, and many think they are getting money back from the government. Doesn't that counter your reminder/pain of actually filling out the forms?
Plus, most people end up with a return, and many think they are getting money back from the government. Doesn't that counter your reminder/pain of actually filling out the forms?
No because the day will come when each individual is not getting a return. I have more than a couple friends that were very pro taxes until the day came they were real payers. Their attitudes changed very quickly.
Okay, did they change their attitudes because they owed money or because they spent 20 hours filing their taxes?
My attitude changed a lot more once I had a kid. I was never a big tax fan, but once you have a kid and realize
1) You pay the daycare
2) You pay the birth
3) You pay the food
4) You pay the healthcare
....
basically the list goes on, and all along society tells you to get fucked. Society isn't there unless maybe you let your kid walk alone to the park so they can have the slightest shred of confidence and then they arrest you for "neglect." It's not "we're a society we'll work together" -- no its "on your own you dumb fucker, by the way dont abort or you'll be in jail for murder." As soon as you raise the kid, suddenly society says "Look we need to take 30% of the kids stuff, including for retirement of everyone else" no matter that society straight up told you to get fucked for the costs of raising the child up to become someone who can pay the taxes.
It's that way with everything in the US. We pour money straight into Israel and get nothing in return. Blow up brown kids with drones only to have the world hate us.
Taxes are theft. I'd rather live with McScrooge evilCo that requires a toll every time I enter the road than this fucking dystopia where my tax money goes to blowing up innocent people around the world and the world's highest prison rate.
1) You pay the daycare
2) You pay the birth
3) You pay the food
4) You pay the healthcare
....
basically the list goes on, and all along society tells you to get fucked. Society isn't there unless maybe you let your kid walk alone to the park so they can have the slightest shred of confidence and then they arrest you for "neglect." It's not "we're a society we'll work together" -- no its "on your own you dumb fucker, by the way dont abort or you'll be in jail for murder." As soon as you raise the kid, suddenly society says "Look we need to take 30% of the kids stuff, including for retirement of everyone else" no matter that society straight up told you to get fucked for the costs of raising the child up to become someone who can pay the taxes.
It's that way with everything in the US. We pour money straight into Israel and get nothing in return. Blow up brown kids with drones only to have the world hate us.
Taxes are theft. I'd rather live with McScrooge evilCo that requires a toll every time I enter the road than this fucking dystopia where my tax money goes to blowing up innocent people around the world and the world's highest prison rate.
This is a fine example of the slippery-slope fallacy.
Ugh, not this nonsense again.
I am not interested in increasing my annoyance and expenses around tax preparation just because some people might -- might! -- be too lazy or complacent to read over an automatically-prepared tax return in order to make sure everything is in order.
I "internalize" my tax burden just fine on my own, thank you. I also suspect that the number of people in the US who look at their tax return and then go and "hold government accountable" is a number approaching zero.
It's really an amazing coup that the tax-prep industry has managed to convince a lot of people that they are stupid, lazy, and complacent, and it's their patriotic duty to suffer and waste time and money in order to make up for it.
Find a new, better argument than this tired old trope.
I am not interested in increasing my annoyance and expenses around tax preparation just because some people might -- might! -- be too lazy or complacent to read over an automatically-prepared tax return in order to make sure everything is in order.
I "internalize" my tax burden just fine on my own, thank you. I also suspect that the number of people in the US who look at their tax return and then go and "hold government accountable" is a number approaching zero.
It's really an amazing coup that the tax-prep industry has managed to convince a lot of people that they are stupid, lazy, and complacent, and it's their patriotic duty to suffer and waste time and money in order to make up for it.
Find a new, better argument than this tired old trope.
I'm pretty sure I would still manage to be reminded that I pay taxes if the government sent me a bill.
Great, now do the part where i do not trust the federal government to do them correctly. see previous successes as: social security, Medicare, Medicaid, transit, and any other items that get obfuscated.
That's exactly the propaganda that the likes of TurboTax/H1B spread, and you're falling for it. Here's a thought, what if you could decide to do them yourself? That's basically how it works elsewhere in the world, the government sends you your taxes and you return them signed if you agree. If you disagree or don't trust the government, then shred them and do it yourself.
So if you have even a moderately complex tax return, what you're saying is you'd be stupid not to do your taxes yourself and compare to what the government autofilled in the form?
So basically it would just say me the time of typing in some numbers but otherwise all the work is the same?
So basically it would just say me the time of typing in some numbers but otherwise all the work is the same?
No, you'd read the pre-filled return, verify that it has everything on it that you expect, and accept or amend it.
Sure, if you were excessively paranoid, you'd want to make sure all the numbers matched and added up to the same things, but... well, I suspect most people aren't like that. I don't see why we should all suffer just because some people are paranoid.
Sure, if you were excessively paranoid, you'd want to make sure all the numbers matched and added up to the same things, but... well, I suspect most people aren't like that. I don't see why we should all suffer just because some people are paranoid.
"Excessively paranoid"?
The numbers that are pre-filled come from the government, which come from your employer. If you're confident your employer would never make a mistake, then you have way more trust in HR than I do.
I've lived in a country where it's all pre-filled in, and you can bet I double checked the numbers. I actually found an error that I had to go back and get HR to fix (they had claimed less was put into a retirement account than actually was).
It was much easier, but not so much because the numbers were filled in, but because the tax code was so simple. You just punch in: a) total wages, b) any kids, c) any donations, d) any money you put in a retirement account. That's it.
In the US it can be super simple if you have W2 income and that's it. Throw in even basic stuff like interest, owning your own home, even a Roth IRA and the math gets complex enough because of the rules around eligibility, or the fact that critical numbers aren't shared with the IRS.
So it wasn't hard for me to just eyeball the total wages and retirement contributions because they are the same each month. No doubt it's more convenient, but you'd be nuts not to double check all the numbers.
The numbers that are pre-filled come from the government, which come from your employer. If you're confident your employer would never make a mistake, then you have way more trust in HR than I do.
I've lived in a country where it's all pre-filled in, and you can bet I double checked the numbers. I actually found an error that I had to go back and get HR to fix (they had claimed less was put into a retirement account than actually was).
It was much easier, but not so much because the numbers were filled in, but because the tax code was so simple. You just punch in: a) total wages, b) any kids, c) any donations, d) any money you put in a retirement account. That's it.
In the US it can be super simple if you have W2 income and that's it. Throw in even basic stuff like interest, owning your own home, even a Roth IRA and the math gets complex enough because of the rules around eligibility, or the fact that critical numbers aren't shared with the IRS.
So it wasn't hard for me to just eyeball the total wages and retirement contributions because they are the same each month. No doubt it's more convenient, but you'd be nuts not to double check all the numbers.
Here's the thing: if you believe that the extra effort is warranted then, great, put in the extra effort.
Why that means that the rest of us have to be forced to do the same is beyond me.
Why that means that the rest of us have to be forced to do the same is beyond me.
They already do them for the people in question. Then when the people file the IRS compares what the person filed to what the IRS expected, and if they differ the IRS tells the person that the person made a mistake.
The near completely lack of anyone complaining that the IRS was mistaken when telling the filer that the filter had a made a mistake provides strong evidence that the IRS does in fact computes people's taxes correctly.
The near completely lack of anyone complaining that the IRS was mistaken when telling the filer that the filter had a made a mistake provides strong evidence that the IRS does in fact computes people's taxes correctly.
I made a mistake on my tax return some years ago (in the amount of a few hundred $, I just messed up a calculation) and the IRS were very pleasant to deal with - though this was before they became so understaffed that it became impossible to get someone on the phone.
That's been my experience. I got a letter from them a couple of years ago about some claimed deductions. This is my best recollection of the call, verbatim:
Agent: You claimed healthcare expenses of $4,500. Can you prove that?
Me: Ma'am, I have 4 kids. I always max out my insurance deductible.
Agent: Hahaha, me too! I understand. OK, that's reasonable. Moving on...
It was truly that straightforward and humane. The (fortunately) few times I've ever talked to an agent, they've been pleasant, competent, and empowered to use good judgment.
Agent: You claimed healthcare expenses of $4,500. Can you prove that?
Me: Ma'am, I have 4 kids. I always max out my insurance deductible.
Agent: Hahaha, me too! I understand. OK, that's reasonable. Moving on...
It was truly that straightforward and humane. The (fortunately) few times I've ever talked to an agent, they've been pleasant, competent, and empowered to use good judgment.
what do you mean? outside of the US, this is the standard operating model.
Gov says we think you owe this much, you say "sure" or you do your own from prefill.
are you guys ok?
Gov says we think you owe this much, you say "sure" or you do your own from prefill.
are you guys ok?
God, no, we aren't.
Ah of course! Let’s get the private sector to make solutions to problems we shouldn’t even have.
You're already at the mercy of the federal government to do them correctly. If they decide you owe more than you put down on your return, they'll send you a bill. Sure, you can appeal it. But that's no different than if they did your taxes for you, you disagreed, and had to appeal it.
In two separate years (that I remember), I did something wrong. One of the years the IRS sent me a bill to fix my mistake, the other time my error was in the other direction and they sent me a refund. So clearly the IRS is already doing my taxes for me. Just they're not allowed to show me their work before I show them mine.
In two separate years (that I remember), I did something wrong. One of the years the IRS sent me a bill to fix my mistake, the other time my error was in the other direction and they sent me a refund. So clearly the IRS is already doing my taxes for me. Just they're not allowed to show me their work before I show them mine.
What, is your monthly social security check less than you’re owed?
Does your Medicare insurance not actually provide the benefits they claim?
Come on dude
Does your Medicare insurance not actually provide the benefits they claim?
Come on dude
Much hay is made about how Intuit et al prevent this stuff from happening, and that's true, but the government itself has a very real incentive here. This is the easiest money they can get, as evidenced by the fact it's what the IRS goes after when it's "chronically underfunded."
Why would they willingly give it up by making compliance easier?