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

nytimes.com

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

#241

Post by slededit »

gruez wrote: post #107
slededit wrote: post #38

Earlier quoted context omitted.

Canada sends you an assessment after you file letting you know their initial thoughts on how much you owe. You can still get audited to see if there were any omissions or factual errors - e.g. Your home office isn't really an office.

but don't you still have to fill out a tax form? in that case, isn't that the same as in US?.

Yes, but you have a much better idea of whether it was actually done correctly and matches CRA's information. I don't claim its better in every way, just this one specific issue has a solution.

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

#242

Post by philwelch »

pratheekrebala wrote: post #140
ryanianian wrote: post #121

Earlier quoted context omitted.

> 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 ta…

I don't think this would prevent you from using a CPA or Itemizing your return. However, this system could be very beneficial for the 68.5% of the population that doesn't itemize[1]. [1] https://taxfoundation.org/who-itemizes-deductions/

Itemizing deductions is totally different from reporting cost basis on a stock sale.

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

#243

Post by chatmasta »

elefanten wrote: post #44
chatmasta wrote: post #29

Earlier quoted context omitted.

What happens when the IRS gets it wrong and the impoverished recipient has nobody to review it for them? (Still I suppose that may be an improvement over the status quo)

The truly impoverished recipient won't owe much in taxes to begin with.

Right, the IRS will actually owe the resident money, i.e. a refund. Trouble is, the IRS often has access to only a subset of deductions and/or circumstantial life information, so it’s likely they would undercalculate the refund owed to an impoverished resident.

The status quo is that residents must either (a) do nothing and receive a fine, or (b) file their taxes, explicitly opting in to any refund programs they qualify for. Whereas the implication of this change would necessitate the impoverished resident to either (a) do nothing and likely miss an underreported refund, or (b) file their taxes, basically, explicitly opting into any refund programs that were missed.

It basically hides the penalty of not filing in savings missed.

It certainly changes the calculus of the question of morality. Which case is better for the impoverished resident? It’s not a simple question.

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

#244

Post by philwelch »

ryanianian wrote: post #121
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 ta…

This is a very common issue, but I'd rather the IRS did 95% of my tax return, sent it to me, and gave me the opportunity to say, "actually, here's my cost basis on that 1099" before me approving it.

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

#245

Post by anonymous5133 »

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 reason it is like that is because the IRS does NOT have all the data. They want to make sure you are reporting everything as you should be.

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

#246

Post by SquirrelOnFire »

recursive wrote: post #227
eftychis wrote: post #214

Earlier quoted context omitted.

Irrational feeling people have with tax refunds. If you receive a high refund you should be crying. That is money you lost. Nobody is giving you free money. With a really pessimistic 5% return, you ended up paying $5 more per $100 of refund...

That's assuming you had all the money at the beginning of the year.

And that you had the discipline not to spend it.

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

#248

Post by philwelch »

ryanianian wrote: post #150
pratheekrebala wrote: post #140

Earlier quoted context omitted.

I don't think this would prevent you from using a CPA or Itemizing your return. However, this system could be very beneficial for the 68.5% of the population that doesn't itemize[1]. [1] https://taxfoundation.org/who-itemizes-deductions/

I think it would still happen with standard/non-itemized deductions. This particular case was mis-reported income. But agreed that my case (and really any cases that involve capital-gains) are probably in the vast minority.

Lots of people receive RSU's, and the cost basis issue is extremely common.

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

#249

Post by philwelch »

pilom wrote: post #164
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.

Starting for 2018 taxes, the standard deduction was doubled to $12,000 for a single filer and $24,000 for a married couple. Combine that with no longer being able to deduct state income taxes and there will be fewer people than ever actually itemizing deductions this year.

The state and local income tax deduction was capped, but not abolished.

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

#250

Post by kmkemp »

curiousgeorgio wrote: post #206
MaysonL wrote: post #193

Earlier quoted context omitted.

Lobbying + campaign contributions. + the knowledge that as long as they don't change the situation, they'll be able to expect future campaign contributions.

I agree that may be a factor in more controversial issues where siding with lobbyists doesn't come at the cost of alienating a huge majority of your constituents. This seems different. Almost everyone (from what I understand) agrees, so it's a pretty clear case where we should be able to call out those lawmakers and say "you're obviously only doing this for the money/job security - you can't even pretend to be agains…

There are many issues that are in similar spots. The go to strategy to deal with those has been to either:

(1) ignore it completely if it's not getting sufficient media coverage to cause outrage or (2) control the coverage by making it seem as if the public is divided, typically using various forms of poor (but effective) arguments, statistically invalid polling, and research that only gets published if it produces the desired result

I'd say this falls into the first category.

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