Would You Let the I.R.S. Prepare Your Taxes? (2015)
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Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)
#2Colleagues from the EU countries who relocate to the US generally tend to have a two-fold reaction - excitement at the lower tax rates and dismay at the filing complexities.
Would be amazing to have the cake and eat it too - lower taxes and a simple filing system!
Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)
#3I'm annoyed that there is no simple system for the IRS to tell me what I owe, and let me pay or dispute.
Instead, we play this game where the IRS provides a bunch of complicated documents, I guess which ones to fill out and submit, then wait 3 years to see if I was randomly chosen to see if I was correct. So it's very easy to make a mistake for dozens of years, then suddenly be penalized at random. It's the worst kind of selective enforcement - random enforcement.
And this is to help H&R Block and others sell "tax insurance", just in case you're randomly selected for audit and H&R Block was also wrong about which tax documents to submit.
The IRS have all the data - from employers, banks, Social Security, unemployment, and other government services. I might have most or all of the data, and could verify or contest items they have on file. Edit: So the IRS may not always have all of the data, and would still need a way for us to submit documents in some edge cases.
Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)
#4It's not that simple. Depending on how you spend your money you can have access to some tax saving measures. You can also make money cash that you have to declare when filing your taxes.
Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)
#5Having lived in New Zealand where the IRD does this, yes. Yes I would.
If they owe you money, you can file. If you owe them money because they screwed up, you don’t need to do anything. This assumes pay as you earn, standard employee status, not entrepreneurial revenue. Easy for the common case.
Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)
#6“Your taxes” is such an overloaded term that it’s almost comical to refer to it as if it means the same thing for everyone.
There is basically one straight-forward case where the IRS preparing taxes makes sense: that of full time employees whose only income is from their job which issues W2s.
For everyone else — which includes:
- People working multiple part time jobs
- People with non-standard investment portfolios or real estate holdings
- Contractors, with or without an LLC
- Full time employees who are also contractors
- Dual residents
- Small retail businesses
- Small internet businesses
- Megacorps
— there is a different set of requirements. The idea that the IRS would be able to optimize everybody’s return so they pay the least amount of tax, is absurd. And that’s not even considering the moral hazard of misaligned incentives, i.e. the IRS has no incentive to make sure you deduct as much as legally possible from your return.
Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)
#7I would absolutely let the IRS prepare my taxes... if this workflow or one like it is followed:
Jan, I get a 1040 form, prefilled out.
If I don't agree that it states my financial position correctly, I can correct it & send it back by Mar 1st.
If I do agree, I place it in my file cabinet.
But as patio11 noted, at least once, the IRS enforces taxes to the amount Americans will tolerate. What he did not say, but I have heard elsewhere, is that tax evasion is enormous, and pervasive in the cash economy.
which is part of why I favor abolishing cash. :-)
Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)
#8They already do prepare your taxes. They just make you do the same work twice.
Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)
#913 million in lobbying over five years to prevent more efficient tax filing for an entire nation and protect your business model. Sounds like an amazing deal for a company with 5 billion in revenue. I'm consistently amazed at just how little money it takes to buy off the government effectively.
Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)
#10I stopped filing my taxes starting in 2011 for 2010. I had always hated the process, but in 2010 I had switched jobs several times, and had misplaced one of the stubs mailed by an employer.
I have almost always worked as an employee, not a contractor or business, so I did not owe money--they probably owed me.
I decided that rather than get the couple hundred bucks I would receive as my return, I will forgo the stupid process altogether.
I have yet to hear from anyone about it, and I have become a little bit happier by not having to deal with that crap.
In 2014, I gave up income altogether, so I am no longer required to file. Before then, I guess you could call it civil disobedience.