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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

#231

Post by jxramos »

danans wrote: post #197
jxramos wrote: post #168

Earlier quoted context omitted.

The thing people misunderstand with the government not being able to figure it out is because there's a huge variety of complexity that is truly individual based. Did you make a contribution to a tax deductible IRA? Did you make a retroactive payment to that account in the following tax calendar year? There's a ton of variables going on here, where the government doesn't have this all-seeing system where everything g…

> Needless to say all of this would be much more simple if we just pay a flat tax on all income for all people. Nothing simpler than that. That would be a highly regressive tax system that dramatically transfers even more wealth to the already wealthy. But sure, it's definitely simpler. That doesn't make it better.

The regression application here seems flawed, that assumes a fixed percentage is applied to a fixed amount, where that amount is invariant to income. That is not the case with a flat tax where a fixed percentage is applied to a variable amount. The flatness of the flat tax is on the percentage, the amount (income) is the variable portion that will be more or less based on the individual. The percents however will be equal. That's about as equal and fair as you can get as far as I can see, equal treatment for all, namely everyone pays the same percentage whatever that percentage is. It's a simple inequality too: p$XXXX(rich) > p$X(poor) so the rich still pay more right?

https://www.investopedia.com/terms/r/regressivetax.asp

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

#232

Post by SilasX »

nightski wrote: post #133
komali2 wrote: post #82

Earlier quoted context omitted.

It's pretty disgusting. Summed up in one of my favorite tweets, which went something like > Gov: you owe us money. It's called taxes > Ctzn: oh ok, how much do I owe you? > Gov: you have to figure it out > Ctzn: oh well, then I owe you 0 > Gov: no, no, we know how much you owe, you have to figure it out, and by the way if you get it wrong you go to jail

You don't go to jail for filing a wrong number accidentally. Only if you are intentionally lying/hiding income. I know people who didn't pay tax FOR THEIR BUSINESS for several years and they settled the debt for much less than they owed and definitely did not go to jail. This is just misinformation.

If that's true, then what's the point of paying business taxes? When the IRS finds out, you just pay less than you would otherwise, and much later.

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

#233

Post by rednerrus »

hanniabu wrote: post #185
aidenn0 wrote: post #178

Earlier quoted context omitted.

FWIW, The GOP control of the senate is clearly not due to gerrymandering, or at least not any gerrymandering that happened in the past 100 years. I think gerrymandering is an issue, but it's only a fraction of the reason why representation is not particularly proportional.

Of course, there's a long list of items that help rig the system including outdated electoral votes, accepting unlimited funding from big business, the removal of term limits in 1995, and now the rampant gaslighting and spread of false news where the louder voice wins instead of facts coming out on top.

I once had a PS professor that liked to say "The problem with our system is the people who vote."

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

#234

Post by jxramos »

kmonsen wrote: post #217
jxramos wrote: post #168

Earlier quoted context omitted.

The thing people misunderstand with the government not being able to figure it out is because there's a huge variety of complexity that is truly individual based. Did you make a contribution to a tax deductible IRA? Did you make a retroactive payment to that account in the following tax calendar year? There's a ton of variables going on here, where the government doesn't have this all-seeing system where everything g…

Flat taxes would not help at all, because the government still needs to know all your data. After that it is just computations which computers are pretty good at.

Maybe but the point is they'll need to know vastly less data than the smorgasbord of hyper-parameters in use today.

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

#235

Post by arcticbull »

jxramos wrote: post #168
komali2 wrote: post #82

Earlier quoted context omitted.

It's pretty disgusting. Summed up in one of my favorite tweets, which went something like > Gov: you owe us money. It's called taxes > Ctzn: oh ok, how much do I owe you? > Gov: you have to figure it out > Ctzn: oh well, then I owe you 0 > Gov: no, no, we know how much you owe, you have to figure it out, and by the way if you get it wrong you go to jail

The thing people misunderstand with the government not being able to figure it out is because there's a huge variety of complexity that is truly individual based. Did you make a contribution to a tax deductible IRA? Did you make a retroactive payment to that account in the following tax calendar year? There's a ton of variables going on here, where the government doesn't have this all-seeing system where everything g…

Literally all of that information is already being reported to the IRS by the relevant companies on forms 1098, 1099-whatever, W-2, W-4 and whatever other schedules apply. The IRS defines the rules, they built an engine to take all that into account to ensure you're not lying on your taxes. They just have to literally run it and send you the printout for verification with a remittance stub. The rest is regulatory capture and graft.

I wonder if I could FOIA myself my tax return from the IRS for the coming year haha.

Flat tax is totally unrelated and a conversation worth having. It's regressive, disproportionately impacts those least well off (the poor) and doesn't make sense when you index the taxes paid to the marginal utility of money. For someone who makes 10K/yr, 10% is 1K and may be the difference between rent and homelessness. For someone who makes 1M/yr 10% is 100K leaving them 900K to futz with. 1K to a poor person ls worth way way more than 100K to a rich person. That's why we don't do it. That's why almost nobody does it.

Flat tax is "simple" in the way it's always easier to re-write something from scratch: what you're left with tends to be a bastardization followed by a long and expensive lesson in how it got that way in the first place.

(For an example of what it might look like, the Canada Revenue Agency offers this already: https://www.canada.ca/en/revenue-agency/services/e-services/...)

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

#236

Post by kevin_thibedeau »

zchrykng wrote: post #206
alistairSH wrote: post #145

Earlier quoted context omitted.

The majority (~70%) of tax-payers don't have $12k/$24k (single/married) worth of things to deduct. Yet, ~90% of tax-payers use either a CPA (~50%) or tax software (30%) to file. Between overly complex rules, heavy advertising, and lobbying, the tax prep companies have us all convinced we'll go jail if we don't pay $40-$400+ for prep services.

I'm a CPA, and I pay another CPA specialized in taxes to do mine. Our tax code is far too complex. Basically no one can just sit down and do their taxes and be sure that they are paying the minimum amount they owe.

I do it every year. I have nothing to deduct so it makes no sense to pay someone else to fill in numbers I already have.

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

#238

Post by phonon »

jandrese wrote: post #138
rdtsc wrote: post #23

Earlier quoted context omitted.

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.

As an average Joe it seems like it can be pretty much impossible to figure out the rules in any number of corner cases. For example. I'm considering installing Solar Panels on my house. The entirety of the official IRS guidance (in the manuals) is this: "Qualified solar electric property costs are costs for property that uses solar energy to generate electricity for use in your home located in the United States. No c…

You can in fact request a private letter ruling from the IRS. They are not obligated to respond to it, but typically do.

E.g. For §25D

https://www.irs.gov/pub/irs-wd/201809003.pdf

https://www.irs.gov/pub/irs-wd/1130003.pdf

You also apparently did not review

https://www.irs.gov/pub/irs-drop/n-13-70.pdf

(Which even has a contact phone number for the author; call it! Worse that can happen is they point you somewhere else.)

If you google "IRC §25D" you'll find a wide variety of resources. In reality, what you'd likely do is a read a bit, and try to come to reasonable conclusion. If the tax amount at issue is substantial, try to find someone with expertise in the topic. Also try to take ideas to their logical conclusion. If 25% of your roof is solar panels, do you think the credit should apply to the cost of an entire new roof as well? It's a credit to encourage energy efficiency, not regular upkeep.

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

#239

Post by caro_douglos »

ksdale wrote: post #189
astura wrote: post #111

Earlier quoted context omitted.

It's also anti-tax activist like Grover Norquist’s Americans for Tax Reform who hate automatic filing and prefilled forms too. Their reasoning is if taxes are "too easy" then somehow Americans will blindly accept tax increases so they actually want to keep tax filing as difficult as possible.

I am definitely not a Grover Norquist fan, but I do taxes for a living and a lot of people are VERY surprised at the amount that is withheld from their paychecks, but they never notice how much it is unless something happens and they are required to write a check. A couple illustrations: It's very common for people to owe tax at a lower rate than they did the year before, but be upset because they have to write a che…

I think this is where things get unfair. As a system we are more comfortable taking advantage of these people’s ignorance than teaching them. As your said even savvy people don’t get this concept because it means understanding the whole system not just when they get their checks.

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

#240

Post by TheTrotters »

joshstrange wrote: post #202
aidenn0 wrote: post #178

Earlier quoted context omitted.

FWIW, The GOP control of the senate is clearly not due to gerrymandering, or at least not any gerrymandering that happened in the past 100 years. I think gerrymandering is an issue, but it's only a fraction of the reason why representation is not particularly proportional.

> or at least not any gerrymandering that happened in the past 100 years. This is the /very/ important distinction. Our entire country was gerrymandered when they gave every state 2 votes in the senate. It's truly crazy how few Americans can sway the makeup of the senate/house/EC. Edit: removed "(and 3 base in the house)" because that's not correct, I was mixing it up with the EC in my head.

Every state has at least one representative in the House, not three.
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