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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)

#121

Post by ryanianian »

stephengillie wrote: post #3

I'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 kin…

> The IRS have all the data

Not..entirely true.

My 2016 taxes were professionally done, but we somehow forgot to include one of the something-something-1099 forms from a brokerage firm. The brokerage reported some RSU stock-sells to the IRS but didn't report the cost-basis, and so the IRS assumed the cost-basis was $0 and thus taxed the full sale as income (effectively double-taxing all the RSUs). They just sent a tax bill for something like $20k plus a bunch of fees and interest.

It's an accounting-error so we won't owe much, but I doubt we would have seen this mistake if the IRS had just told us a total amount to pay. We have two tech-job incomes both of which are highly-dependent on equity, so we'd almost certainly end up getting a CPA to run all the numbers again anyway.

I'm a fan of reducing bureaucracy of double-reporting tax info, but I'm personally unwilling to trust that the IRS and various banks / brokerage systems are up to the task of generating trustworthy data (and/or erring on the side of the taxpayer in situations like this).

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#122

Post by icedchai »

stephengillie wrote: post #85
icedchai wrote: post #78

Earlier quoted context omitted.

This would be nice, but they may not actually have all of the data: itemized deductions being one major missing piece.

Doesn't the bank send the same tax documents to the IRS as they send to you? (Mortgage interest is a commonly itemized deduction.) Itemized deductions could be a "dispute" item, where you would login, switch from Standard to Itemized, then itemize your deductions. It could possibly recall this setting, and even the deductions, from the previous year's input.

For some, yes. However, in some cases, no. For example, I have a sole proprietor with a lot of 'business expenses' (web hosting, software licenses, etc.) Those get deducted.

It would be nice to get this streamlined! taxes are such a chore.

Too bad there's a multi billion dollar industry - tax preparation and accounting - supported by taxes. It will never happen.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#123

Post by mikeyouse »

SilasX wrote: post #105
xsmasher wrote: post #75

Earlier quoted context omitted.

Presumably in the "reduction or elimination of deductions and credits" - simplifying the tax code would require those kinds of changes.

Seriously? That's the basis of saying that the anti-tax pledge prohibits IRS tax prep? The number of deductions and credits is orthogonal to whether the IRS can save you the effort of collecting the information about what they think you owe.

Not the basis at all, just one example. Here's another good one that OP added at the end in an edit:

> It’s no secret that the IRS and big spenders in Washington, D.C. want to socialize all tax preparation in America. The (ironically-named) IRS Office of Taxpayer Advocate has been pushing for IRS preparation of tax returns for years. There’s only one reason proponents want to do this—tax revenues. If the IRS invites a conflict of interest by adding “tax preparer” to its role as “tax collector,” it’s a near-certainty that everyone’s taxes will rise. In fact, higher tax revenues are a major selling point of mandatory IRS-prepared tax returns.

...

> More importantly, it directs the IRS that it “shall not compete with the private sector in providing these services to taxpayers, nor acquire, develop, or deploy enabling systems to duplicate or replace private tax preparation services.”

> Never again would taxpayers have to worry about the IRS filling out a Form 1040 for them against their will.

These are unserious people that shouldn't be anywhere near the halls of power.

https://www.atr.org/taxpayer-advocates-issue-joint-free-file...

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#124

Post by Someguywhatever »

ljm wrote: post #103
kartan wrote: post #51

I have paid taxes in Sweden and Spain. In both countries, I get a preliminary tax form with all my data. If I don't want to change anything I just need to go online. Click Accept. And pay with my credit card the difference between what my employer pays to the government monthly and the total, around 100$. It is very efficient. I have the feeling that apart from lobbying USA loves to hate taxes. To make paying taxes o…

I was slightly bothered after moving to Spain from the UK because I had to submit the IRPF and similar. You never have to think of such a thing in the UK unless you see the wrong code on your payslip, and that is always in order to get a refund. People of the US won't trust a damn thing the government does, probably for pretty good reason, and the whole country suffers for it. IRS can adequately track and report your…

>People of the US won't trust a damn thing the government does, probably for pretty good reason, and the whole country suffers for it.

Lobbying by companies like Turbotax (Intuit) and others is largely behind this. I think many Americans would be ok with just paying a bill the government sends them which is based on information that they know the government already has.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#125

Post by jchw »

Coding_Cat wrote: post #92
volkk wrote: post #56

Earlier quoted context omitted.

> It's the worst kind of selective enforcement - random enforcement. Very similar to the way police behave w/ regards to speeding tickets. Set extremely low speeds that don't make sense on highways. Allow most people to go 10-15 above. But then also sometimes choose random people to screw over when it's the end of the month and they need to hit their quotas.

>Set extremely low speeds that don't make sense on highways. Allow most people to go 10-15 above. I doubt people really speed because the limits have been set too low and the people know better what is an ideal speed limit. I think people_think_ they know better what the speed limit is, and/or reason "well if 60mph is okay, 75 mph can't be that bad, I'm barely speeding and I'm in a rush". At least, that's the attitud…

Generally in my experience people drive around 70-75 mph regardless of the speed limit. At 50mph some people may lean lower, but it's generally usual to see people on 75mph highways going 75mph. There were some in Michigan.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#126

Post by greedo »

rb808 wrote: post #43
sologoub wrote: post #2

Colleagues 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!

Lower taxes? In France the bracket for a family for €104,120 to €279,132 is only 30%. Sure if you live in Oaklahoma you might pay less than that but CA/NY state taxes plus property taxes, plus fewer investment tax free options, I think US taxes are now similar or higher. Ie 28% federal + 10% state + 10% property taxes equals nearly 50%. Sure sales tax is lower. Plus - you still have to pay for your medical care, and…

10% property tax would spawn a rebellion. Mine is a bit over 2% and people complain about that.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#128

Post by zip1234 »

quasse wrote: post #109
Coding_Cat wrote: post #92

Earlier quoted context omitted.

>Set extremely low speeds that don't make sense on highways. Allow most people to go 10-15 above. I doubt people really speed because the limits have been set too low and the people know better what is an ideal speed limit. I think people_think_ they know better what the speed limit is, and/or reason "well if 60mph is okay, 75 mph can't be that bad, I'm barely speeding and I'm in a rush". At least, that's the attitud…

> If you were to raise the speed limit to 75mph, people would just use the same logic to drive 90mph instead. Luckily there are plenty of places that have done just that that we can learn from. WI just raised a lot of its highway speed limits to 70mph for example. Anecdotally, people used to drive in the 75mph range before the speed limit was raised and would deal with the occasional ticket for 10 over. In the genera…

Also in Michigan, they just raised the speed limit on some Michigan expressways to 75 from 70 because they found that was the speed most people went.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#129

Post by ada1981 »

JumpCrisscross wrote: post #90
ada1981 wrote: post #58

Earlier quoted context omitted.

Not exactly. >> Willful failure to file a tax return is a misdemeanor pursuant to IRC 7203. In cases where an overt act of evasion occurred, willful failure to file may be elevated to a felony under IRC 7201. <<

> Willful failure to file a tax return is a misdemeanor Carrying up to one year of jail time under federal law. States usually have penalties, too. > In cases where an overt act of evasion occurred, willful failure to file may be elevated to a felony OP is bragging about willfully failing to file on the Internet. Something tells me proving this wouldn't take a sleuth.

Overt acts of evasion aren’t simply not sending in your paperwork.

It would be actively doing things to hide, falsify documents, etc.

This seems to be mostly for businesses and folks doing a lot of cash transactions.

Sounds like OP isn’t making much money to begin with — is it really worth the IRS time or to prosecute him?

I imagine they’d tell him to pay and fine him.

Doubtful it’s a felony based on his description.

Re: Would You Let the I.R.S. Prepare Your Taxes? (2015)

#130

Post by packet_nerd »

Coding_Cat wrote: post #92
volkk wrote: post #56

Earlier quoted context omitted.

> It's the worst kind of selective enforcement - random enforcement. Very similar to the way police behave w/ regards to speeding tickets. Set extremely low speeds that don't make sense on highways. Allow most people to go 10-15 above. But then also sometimes choose random people to screw over when it's the end of the month and they need to hit their quotas.

>Set extremely low speeds that don't make sense on highways. Allow most people to go 10-15 above. I doubt people really speed because the limits have been set too low and the people know better what is an ideal speed limit. I think people_think_ they know better what the speed limit is, and/or reason "well if 60mph is okay, 75 mph can't be that bad, I'm barely speeding and I'm in a rush". At least, that's the attitud…

Just my observation, in my state the highway speed limit is 80 and people drive at right around 80, and drop down to 75 at night. Then, on a Texas road where it was 85, I was surprised to see most people still going about 80. And in a neighboring state where the speed limit is 70 for similar roads, people still drive right around 80. And once I drove through Chicago at night through a stretch where the speed limit was 45, and people were still going 75 - 80... not sure what the deal with 80 is, but it seems to be the sweet spot a lot of the time.
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