Congress Is About to Ban the US Government from Offering Free Online Tax Filing • Hacker News Board

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

#601

Post by conanbatt » Wed, Apr 10, 2019, 1:59 PM UTC

davemp wrote: post #592

rattlesnakedave wrote: post #377

Earlier quoted context omitted.

This is actually how things were done pre WW2. If people were able to budget for it then, why not now? The current system makes filing taxes and getting refunded seem like a reward, it should probably be a bit painful to do your taxes. Without the painful transparency, it becomes too easy for the government to nearly invisibly turn up the tax rate on individuals to pay for whatever boondoggle or foreign war they see…

> Without the painful transparency, it becomes too easy for the government to nearly invisibly turn up the tax rate on individuals to pay for whatever boondoggle or foreign war they see fit. Non-sequitur. Taxes are already seen on every pay stub and tax return. Even if taxes weren't explicitly state, simply having less money is painfully transparent.

If thats your argument, then you must agree to do away with witholding, there is no downside to the rational actor.

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

#602

Post by jason_slack » Wed, Apr 10, 2019, 1:59 PM UTC

cascom wrote: post #582

jason_slack wrote: post #506

I just filed my taxes this morning. I owe the government $4,600. I received an "underpayment penalty fee of $44" because I did not "pre-pay an estimated tax" each quarter. Something I have never done in the ~25 years I have been paying taxes. Not only do they want the $4,600 by 4/15 they also want an estimated $1,200 "pre-payment" for 2019 by the same date or I will incur this same fee of $44 next year.Plus 3 more pa…

Not saying I don’t commiserate - but it kind of makes sense - you underpaid us during the course of the year by $4,600, assuming you make the same again next year, we need you to pay us quarterly to make up the estimated shortfall - if it turns out you overpaid we’ll true you up (via a refund)

But again, if I am a person who see's a refund each year, why doesn't the government give me a refund up front and trust me to pay it back if my circumstances change?

You see, they expect me to accommodate them, when it is convenient for them, but they would not accommodate the reverse because it doesn't accommodate them.

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

#603

Post by conanbatt » Wed, Apr 10, 2019, 2:00 PM UTC

benj111 wrote: post #496

rattlesnakedave wrote: post #377

Earlier quoted context omitted.

This is actually how things were done pre WW2. If people were able to budget for it then, why not now? The current system makes filing taxes and getting refunded seem like a reward, it should probably be a bit painful to do your taxes. Without the painful transparency, it becomes too easy for the government to nearly invisibly turn up the tax rate on individuals to pay for whatever boondoggle or foreign war they see…

"becomes too easy for the government to nearly invisibly turn up the tax rate" Or not. Source. I live in a country where the vast majority have income taxes handled by their employer. It would still be front page news if income tax rates increased or decreased. Painful transparency is just pain.

How much are income taxes in your country compared to the US?

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

#604

Post by travisoneill1 » Wed, Apr 10, 2019, 2:17 PM UTC

lukeqsee wrote: post #510

jason_slack wrote: post #506

I just filed my taxes this morning. I owe the government $4,600. I received an "underpayment penalty fee of $44" because I did not "pre-pay an estimated tax" each quarter. Something I have never done in the ~25 years I have been paying taxes. Not only do they want the $4,600 by 4/15 they also want an estimated $1,200 "pre-payment" for 2019 by the same date or I will incur this same fee of $44 next year.Plus 3 more pa…

Strictly speaking, you're holding their money for a year without interest. The estimated payments are not prepayments—they are payments that match what most W2 employees would pay every paycheck, but isn't the case for 1099 (or otherwise self-employed) individuals, since they don't have taxes withheld from their paychecks.

And if you are due a refund they are holding yours, but good luck getting any interest on that!

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

#605

Post by basseq » Wed, Apr 10, 2019, 2:19 PM UTC

conanbatt wrote: post #595

ransom1538 wrote: post #580

Earlier quoted context omitted.

The US has the most idiotic tax system. Your employer, your mutual funds, your 401k, your bank -- everyone reports what you make to the government. The government already knows what you owe (excluding those that itemize). They should just print out a summary and hand over a bill / refund.

This is not done because the IRS doesn't have the power to enforce its tax system, and if it reported the information it had to the people, the people could know they can slip away with not paying anything that wasnt properly reported. First, a transparent system of the IRS would lower revenue. Second, the deductibles system is very complex for the IRS to pre-calculate it, so they are unable to do it.

You didn't cover the most important—and political—reason: it would delay refunds.

2019 deadlines for 1099-INT/DIV (i.e., the forms you get from your bank or brokerage) are April 1st. The IRS filing window opened January 29, with 90% of tax returns processed within 21 days. Since the IRS can't reliably pre-populate a tax return without all the required information, it would delay filing (and refunds) by 8 weeks.

As the tax refund check is the largest check many Americans receive every year, delaying that payout gets taxpayer advocacy groups up in arms and is tantamount to political suicide.

Incidentally, this same gap is where a bulk of tax return fraud happens—equalling billions of dollars. In short, if you file return before the IRS has all the information to validate that return is indeed correct, they'll usually shrug and accept it. By the time they get all the information they need, you've cashed out your refund debit card and are long gone.

I haven't seen any analysis that such a system would lower revenues (indeed, it would stop billions of dollars of fraud and tax evasion), or that the deductible system is too complex.

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

#606

Post by pas » Wed, Apr 10, 2019, 2:19 PM UTC

dosy wrote: post #459

kristopolous wrote: post #453

Earlier quoted context omitted.

Free market dogma is a scam: an intellectual framework invented to rationalize a position. There's a long history of people doing these things such as with monarchist theory or eugenics for colonialism and slavery. People have theories and frameworks to justify misogyny, child abuse and being harsh to homeless people. In this case it's an ability to do whatever you want to make money without any oversight, laws, rest…

I definitely agree that the intentions of the ruling elite will be formalized into nice-sounding theories, irrespective of their faithfulness to reality or their utility outside of supporting the system of rule. Marxism for example and you can replace ruling elite, with people who want to be that. Then you get notions like identity politics, feminism, cultural Marxism, misandry, racism. There's an interesting second…

is there anybody, really anyone, who doesn't want to be the "elite"?

every human wants self-determination, the power shape their own future, to be in control of their fate.

yet not every one of them are or become racist.

furthermore, there are theories (eg feminism) that are built on fairness (as in A Theory of Justice by Rawls), and there are those that are very much not (eg racism).

the others are simply too vague to simply deal with.

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

#607

Post by mattferderer » Wed, Apr 10, 2019, 2:23 PM UTC

freddie_mercury wrote: post #293

mattferderer wrote: post #265

If I read this right, you can still use the free service the IRS provides if you make less than $66,000. Has anyone used Turbo Tax or H&R "free" versions to file? I can't use them & last time I tried they charged you to submit your taxes electronically but otherwise it was simple & easy. I also know many cities offer services to help people file simple taxes for free. I believe this bill also states the IRS cannot se…

> I don't expect the IRS to make software for complicated taxes as that's a very difficult challenge. The IRS already has this software. They are literally the best placed people in the world to make this software. How do you think they check taxes for 300,000,000 people + businesses? And their software is already pre-populated with data from employers, banks, brokerages, and all the other places that automatically f…

To my (very limited) understanding, I'm under the impression their main way of verifying taxes is by comparing what you reported vs what everyone else who reported a tax form on you sent in.

I 100% agree that the IRS should handle the majority of simple taxes. I just don't think it's reasonable to expect them to find all the possible deductions or suggest complex strategies for you. They could offer common suggestions & try to remind you of common deductions though.

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

#608

Post by gambler » Wed, Apr 10, 2019, 2:27 PM UTC

vonmoltke wrote: post #563

gambler wrote: post #78

Earlier quoted context omitted.

>The question I have is whether a government provided automatic filing would actually be cheaper (or more effective) than say, Turbotax. The question is valid, but the numbers do not add up. TT asks ~$50 for federal return. If everyone in US used the service, the cost would amount to over 16 billion dollars. That is more than the entire IRS budget[1] right now. [1] https://www.irs.gov/statistics/irs-budget-and-workfo…

Every single living person does not file a tax return. You can't just multiply the cost of preparing a return by the population.

It's an order-of-magnitude estimation. Turbo Tax offers multiple products with different prices. Even if you plug in more exact numbers and use the cheapest product you get a hefty sum of 9 billion (150M individual returns * $60). IRS total budget is 11.5 billion and they do way more than just process returns.

There is no way an e-File system run by IRS would costs additional 9 billion dollars per year. They already do most of the calculation internally.

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

#609

Post by SilasX » Wed, Apr 10, 2019, 2:28 PM UTC

pishpash wrote: post #430

SilasX wrote: post #189

Earlier quoted context omitted.

Can someone explain how rayiner's argument goes against the idea of IRS-prepared taxes itself rather than the UX of the implementation? It sounds like he’s just trying to be devil’s advocate (to put it nicely).

Why are Norquist types inclined to impose even more burden on what the tax burden actually is? Even if the IRS calculated your taxes, you'd still get the bill to pay it. That's already more than could be said for payroll withholding, which is the primary "unseen" tax.

I don't know! I actually strongly lean toward the Norquist "taxes suck and need to be lower" approach. But for me, that was about making sure people are aware of the rate and amount. Making it painful to file is just sadistic (as I might have suggested before).

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

#610

Post by mattferderer » Wed, Apr 10, 2019, 2:29 PM UTC

arkades wrote: post #273

mattferderer wrote: post #265

If I read this right, you can still use the free service the IRS provides if you make less than $66,000. Has anyone used Turbo Tax or H&R "free" versions to file? I can't use them & last time I tried they charged you to submit your taxes electronically but otherwise it was simple & easy. I also know many cities offer services to help people file simple taxes for free. I believe this bill also states the IRS cannot se…

> If I read this right, you can still use the free service the IRS provides if you make less than $66,000. You did not. You can contact the private companies such as H&R Block and request Their free service if you make less than 66k - and subject yourself to their upselling and scam artistry, to try and get you to pay anything more than "free." > I don't expect the IRS to make software for complicated taxes as that's…

I 100% agree with you that simple taxes should be easier to submit. The IRS could & should send you a pre-filled simple tax form that you have the option to sign & send back or agree to online. No "competing" software solution required.

I don't think the IRS should build software for complex taxes & strategies is all I'm saying. That's what accountants are for.

I do understand the argument that a simple pre-done tax solution would mean some people would miss out on deductions. But if you calculate the time & cost it currently takes to submit your taxes, it probably equals out.