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IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

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Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#31

Post by lokar »

rb808 wrote: post #25
jjeaff wrote: post #11

There is no reason the IRS shouldn't have a simple, online fillable 1099EZ that makes the calculations and validations for you. And while their at it, match the SSN to the w2 info that they have on file. This would take care of 80% of the population. Just don't outsource it. I'm sure USDS could have it ready in less than a year.

What about States? Should the IRS make a online form that will do your state tax too?

They could provide an API to the states that makes doing the state return (once federal is done) very easy. And provide a link, etc.

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#32

Post by sct202 »

ppseafield wrote: post #14
zymhan wrote: post #5

Earlier quoted context omitted.

The idea was lots of people could file for free using a private online service. Not many people at all ended up using it, since it wasn't in the company's interest to have people not pay them.

More accurate: Intuit told the federal government they would absolutely offer a free e-file tax service next to their pay service, and then they used several lies and manipulative techniques so that folks could not find it or even discover its existence.

Or if you do find it, you get intermodals with dark patterns upselling the paid service, and once you upgrade you can't downgrade back to the free-file version.

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#33

Post by neolefty »

Wow I would love to hear the inside story on this one.

I think we're all motivated by both survival and doing good, and I see an overall trend towards more doing good, as survival gets easier. Is this a case of that? Who drove it? What internal processes allowed public service to overcome corrupt lobbying pressure?

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#34

Post by BHSPitMonkey »

jjeaff wrote: post #11

There is no reason the IRS shouldn't have a simple, online fillable 1099EZ that makes the calculations and validations for you. And while their at it, match the SSN to the w2 info that they have on file. This would take care of 80% of the population. Just don't outsource it. I'm sure USDS could have it ready in less than a year.

I assume you mean 1040EZ, as most people aren't in the habit of issuing 1099's. But you're absolutely right; hopefully this news is a precursor to further undoing of the tax prep lobby's efforts.

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#35

Post by coldpie »

rdtsc wrote: post #23
jjeaff wrote: post #11

There is no reason the IRS shouldn't have a simple, online fillable 1099EZ that makes the calculations and validations for you. And while their at it, match the SSN to the w2 info that they have on file. This would take care of 80% of the population. Just don't outsource it. I'm sure USDS could have it ready in less than a year.

100% agree. To me they seem to be playing this perverse game of knowing how much you owe based on your W-2s then not telling you, waiting for you to file and guess how much you owe just right. If you guess wrong tough luck, you get penalties years later.

Have you actually gotten a penalty? The IRS is just interested in gathering its taxes, it has no interest in punishing you. You have to mess up pretty hard and/or deliberately to get the IRS on your case.

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#36

Post by sokoloff »

privateSFacct wrote: post #8

Fantastic news! Now let's have the IRS start building out their free e-file program and IDEALLY put some pressure or at least summarize what parts of the tax code are the most complex so they can be simplified. A lot of the tax code complexity comes from congress messing with the logic of taxing folks on their income. And yes, simplifying the tax code would get rid of loopholes like deduction that can exceed the cost…

Do you have a reference for the deduction greater than basis loophole? I spent a few minutes looking for it on google and couldn’t find a reference. It does seem non-sensical on the face, but I’d like to read more.

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#37

Post by throwaheyy »

rdtsc wrote: post #23
jjeaff wrote: post #11

There is no reason the IRS shouldn't have a simple, online fillable 1099EZ that makes the calculations and validations for you. And while their at it, match the SSN to the w2 info that they have on file. This would take care of 80% of the population. Just don't outsource it. I'm sure USDS could have it ready in less than a year.

100% agree. To me they seem to be playing this perverse game of knowing how much you owe based on your W-2s then not telling you, waiting for you to file and guess how much you owe just right. If you guess wrong tough luck, you get penalties years later.

I'm not an American but I've been doing US taxes for 10+ years. There's never been any guessing involved. What were you trying to guess?

I've underpaid precisely once, when I didn't know about qurterly reporting, and the so-called "penalty" was nothing unfair -- just the interest the money earned in my account instead of the IRS's.

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#38

Post by xtracto »

This USA tax thing has always baffled me... it is the exact definition of why we pay taxes: for the government to provide services that are common to the country´s citizens.

There´s nothing more common than tax collection: rich, middle class or poor. Why wouldn't citizens demand a public tax filing process? Even in Mexico we have an automagical tax filing process that makes:

a) The great majority of the population who perceives a salary not needing to file taxes.

b) For the rest of the people, those who don't do anything fancy, just click one button in a portal to do the filing, and everything is calculated by the tax authority.

c) For the small percentage that do more complex things (I'll say it is between 5% and 10% of the population) still can do it in the portal for free, or hire an accountant.

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#39

Post by Waterluvian »

So in Canada I pay about $15 CAD to file for my household. It takes 20 mins and is submitted digitally.

Is this the equivalent of the issue in the USA or is it more expensive or something? I get that free filing is kind of obvious as a right, but the online service really does give me $15 of value so I've never thought to be upset by it.

Re: IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

#40

Post by lykr0n »

rb808 wrote: post #25
jjeaff wrote: post #11

There is no reason the IRS shouldn't have a simple, online fillable 1099EZ that makes the calculations and validations for you. And while their at it, match the SSN to the w2 info that they have on file. This would take care of 80% of the population. Just don't outsource it. I'm sure USDS could have it ready in less than a year.

What about States? Should the IRS make a online form that will do your state tax too?

The states can do their own application. If you're issued a W2, the issuing party will usually send a copy to the IRS and your state's tax office.
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