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Congress Is About to Ban the US Government from Offering Free Online Tax Filing

propublica.org

11–20 of 717 posts

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#11

Headline is a bit misleading: The IRS does not currently offer free online tax filing, and bipartisan Congressional leaders are seeking to codify this status quo.

I am very confused - last night I filed my taxes in an hour flat on freefillableforms or whatever that terribly named piece of software is. I thought this was a service provided by the IRS?

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#13
post #8

This is pure anecdote, but... A NOAA employee told me about the time their boss caught holy hell from a Senator because the NWS had the gall to update a particular weather product they offered by adding color to the map. Evidently someone had a business essentially downloading the free NOAA data and improving it by coloring the maps and selling that as a product. When NOAA made it free, they called their Senator in a…

Michael Lewis wrote about the NOAA and this exact type of thing in his last book. In essence the NOAA spends lots of tax payer money to collect weather data but can’t do much with it other than give it away exclusively to a handful of entities that can repackage and sell it.

The eventual dystopian end state could be where the NOAA can’t alert people to tornados and only those subscribing to a weather service would be alerted to get to safety.

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#14

This is deeply frustrating. I can not tell you how many people I see paying $200-300 for some random "tax preparer" set up in a corner mall or the front of a WalMart simply because they do not understand there are a number of free resources that would prepare their 1040EZ for them at their income/complexity level. These same people get back a $1500 "return" so they think they are getting a good deal. Its pure greed a…

1040EZ no longer exists. It went away with the 1040 redesign this year.

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#15

This is deeply frustrating. I can not tell you how many people I see paying $200-300 for some random "tax preparer" set up in a corner mall or the front of a WalMart simply because they do not understand there are a number of free resources that would prepare their 1040EZ for them at their income/complexity level. These same people get back a $1500 "return" so they think they are getting a good deal. Its pure greed a…

Apparently the $150 is worth it to these people over using their agency to google how they could file for free.

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#16
> The Free File Alliance, a private industry group, says 70% of American taxpayers are eligible to file for free. Those taxpayers, who must make less than $66,000, have access to free tax software provided by the companies. But just 3% of eligible U.S. taxpayers actually use the free program each year. Critics of the program say that companies use it as a cross-marketing tool to upsell paid products, that they have deliberately underpromoted the free option and that it leaves consumer data open to privacy breaches.

During the years I was eligible for this program, I used TurboTax for free through it and it worked fine. It was a basic version that didn’t support complex transactions such as capital gains but for most people making under 66k it would have worked fine.

Very interesting to see only 3% use it. It would probably work well for a lot more of those 70%.

The paper forms are also easy enough to do manually, but can’t be e-filed and so the refund comes slower.

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#17
post #15

This is deeply frustrating. I can not tell you how many people I see paying $200-300 for some random "tax preparer" set up in a corner mall or the front of a WalMart simply because they do not understand there are a number of free resources that would prepare their 1040EZ for them at their income/complexity level. These same people get back a $1500 "return" so they think they are getting a good deal. Its pure greed a…

Apparently the $150 is worth it to these people over using their agency to google how they could file for free.

We can’t assume rational agents.

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#18
post #10
post #7

What propublica left out: To be clear the Intuit’s of the world are not acting altruistically, however they’ve created an odd alliance with anti-tax advocates who 1. Think that any government provided system will favor the government over tax-payers and make it easier to sneak in stealth tax changes and 2. The anti-tax lobby cynically (and correctly) understands that in order to keep taxes unpopular, making them pain…

>sneak in stealth tax changes I don't think we exist in a world where this is possible.

> I don't think we exist in a world where this is possible.

The majority of people are pretty ignorant. Look at all the news articles from early in 2019 talking about the size of tax refunds, and people thinking they didn’t get a tax cut because their refund this year was smaller than the one they got last year. In reality, almost everyone got a tax cut (>90% of taxpayers) but that doesn’t necessarily mean a larger refund.

Theoretically, filling out the tax forms would help people understand their tax liability. In practice I think a lot of people just tune out numbers beyond the size of their refund.

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#19
post #11

Headline is a bit misleading: The IRS does not currently offer free online tax filing, and bipartisan Congressional leaders are seeking to codify this status quo.

I am very confused - last night I filed my taxes in an hour flat on freefillableforms or whatever that terribly named piece of software is. I thought this was a service provided by the IRS?

I think freefillableforms.com -- maintained by the Free File Alliance -- is an example of what the article complains about:

> The Free File Alliance, a private industry group, says 70% of American taxpayers are eligible to file for free. Those taxpayers, who must make less than $66,000, have access to free tax software provided by the companies. But just 3% of eligible U.S. taxpayers actually use the free program each year. Critics of the program say that companies use it as a cross-marketing tool to upsell paid products, that they have deliberately underpromoted the free option and that it leaves consumer data open to privacy breaches.

I've never used it so I wouldn't know if it's chockful of upsell adverts. It's certainly very hard (I couldn't do it, at least not in the past 5 minutes) to find a reference to the Free File Alliance on freefillableforms.com. But this is what is buried on IRS.gov:

https://www.irs.gov/e-file-providers/about-the-free-file-all...

> Free File offers a multi-year agreement between IRS and the Free File Alliance to provide free service(s) to more taxpayers. Previously, free offerings were not consistently available and were subject to modification or discontinuation from year-to-year. With Free File, taxpayers have easy access to IRS.gov, which offers a list of all free offerings on a single web page. Under our agreement, Free File Alliance companies offer both free preparation and free e-filing services. There is no cost to qualifying taxpayers.

> Note: We do not endorse any individual Free File Alliance company. While the IRS manages the content of the Free File pages accessible on IRS.gov, it does not retain any taxpayer information entered on the Free File site.

Re: Congress Is About to Ban the US Government from Offering Free Online Tax Filing

#20
post #10
post #7

What propublica left out: To be clear the Intuit’s of the world are not acting altruistically, however they’ve created an odd alliance with anti-tax advocates who 1. Think that any government provided system will favor the government over tax-payers and make it easier to sneak in stealth tax changes and 2. The anti-tax lobby cynically (and correctly) understands that in order to keep taxes unpopular, making them pain…

>sneak in stealth tax changes I don't think we exist in a world where this is possible.

Poor phrasing on my part - I’m not implying they would insert new taxes on the sly, but rather that in areas where tax payers have some discretion, the government software would default to the least favorable treatment for the tax payer, the effect being a higher net tax...
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