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IRS tests free e-filing system that could compete with tax prep giants

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Re: IRS tests free e-filing system that could compete with tax prep giants

#231

Post by lazide »

alistairSH wrote: post #216
bityard wrote: post #193

Earlier quoted context omitted.

I'm not saying it's a GOOD reason, but the main reason the government doesn't just send you a tax bill and say, "here, now pay up" is because there are lots of things which are taxed but the government doesn't "see" because they are not (or cannot reliably be) reported. This goes for certain credits and deductions as well. So the only real leverage they have is to tell everyone to get it right or face the possibility…

Those deductions and credits (mostly) apply to people itemizing their deductions. About 30% of households itemize - the remaining 70% take the standard deduction. [EDIT - since the tax changes in 2018, the numbers are closer to 10% itemize/90% standard deduction] And most of the common items are known to the IRS... mortgage and mortgage interest, property taxes, state taxes, education credits, retirement savings. Com…

Most of the economy (as in cash flow) is through businesses, and what you’re saying doesn’t apply to them.

Re: IRS tests free e-filing system that could compete with tax prep giants

#232

Post by jabroni_salad »

ShadowBanThis01 wrote: post #5

It is WAY past time for this. It's absurd that we have to regurgitate tax information that has already been reported to the government. But it's even more absurd that the government gives us no way to do so electronically. And then there's the disgusting shell game that IS the entire U.S. tax system, which is the root of the whole problem. But... didn't Congress pass some corrupt legislation years ago that made it il…

It was California ReadyReturn that got murdered.

Imagine building a tax collection product that attains a 99% satisfaction rating from the people that pay those taxes and then having it get killed by legalized highwaymen. Even today the top google results return dubious totally-not-funded-by-intuit sources such as "the tax foundation".

Re: IRS tests free e-filing system that could compete with tax prep giants

#233

Post by jerrygenser »

ShadowBanThis01 wrote: post #5

It is WAY past time for this. It's absurd that we have to regurgitate tax information that has already been reported to the government. But it's even more absurd that the government gives us no way to do so electronically. And then there's the disgusting shell game that IS the entire U.S. tax system, which is the root of the whole problem. But... didn't Congress pass some corrupt legislation years ago that made it il…

It's not absurd. It's because these tax prep companies spend a lot of money lobbying and putting those congresspeople in office.

Re: IRS tests free e-filing system that could compete with tax prep giants

#234

Post by lazide »

shadowgovt wrote: post #227
bityard wrote: post #193

Earlier quoted context omitted.

I'm not saying it's a GOOD reason, but the main reason the government doesn't just send you a tax bill and say, "here, now pay up" is because there are lots of things which are taxed but the government doesn't "see" because they are not (or cannot reliably be) reported. This goes for certain credits and deductions as well. So the only real leverage they have is to tell everyone to get it right or face the possibility…

Other countries just calculate up an estimated bill and it seems to work for them. Is there something about US taxes that makes that solution intractable?

There is a large percentage of the US economy is dependent on them being inscrutable for various reasons.

Re: IRS tests free e-filing system that could compete with tax prep giants

#235

Post by jcranmer »

elicash wrote: post #77
macinjosh wrote: post #56

The fact that we have to report anything about our personal finances to the Federal Government is a violation of the 5th Amendment. The fact that they've forced employers to be their snitches is even more gruesome. Isn't it a sure sign of fascism when corporations and government work hand in glove?

The 16th Amendment allows for an income tax: > The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

Actually, it doesn't: Congress already had the power to levy income taxes. The power to levy an income tax predates the 16th Amendment. What the 16th Amendment did was to explicitly overturn the Pollock SCOTUS decision, which said that a tax on rental income is basically a tax on property, and a tax on property is a direct tax which requires specifically apportionment among the states per the Constitution.

Re: IRS tests free e-filing system that could compete with tax prep giants

#236

Post by lazide »

jsty wrote: post #172
thelittleone wrote: post #155

Earlier quoted context omitted.

You could establish a corporation in a UAE freezone with visa and not even need to keep books. Of course assuming your laws allow it.

> Of course assuming your laws allow it. The spherical cow of the accounting world

Also a bit of a Heisenbergs cat!

A lot of things are ‘legal’ as long as you don’t get audited.

Re: IRS tests free e-filing system that could compete with tax prep giants

#237

Post by andrewla »

The steelman case for opposing "auto-filing" or having the IRS provide tax preparation is that the intention of requiring everyone to file is that all citizens should be directly aware of the amount of taxes being assessed and the complexity of the tax code itself, with the objective of making people oppose legislative increases in the complexity of the tax code, and to make tax increases more intrusive so that legislators cannot increase taxes without people noticing.

I think, though, that this philosophy does not accomplish its ends -- people are mad at the IRS for making them do this work, not at the legislators for creating and maintaining a byzantine tax code. Ideally we would all choose politicians that favored removing complexity and reducing the amount of taxes, but the reality is that this is not usually a politically viable strategy.

Re: IRS tests free e-filing system that could compete with tax prep giants

#238

Post by _8j50 »

ShadowBanThis01 wrote: post #5

It is WAY past time for this. It's absurd that we have to regurgitate tax information that has already been reported to the government. But it's even more absurd that the government gives us no way to do so electronically. And then there's the disgusting shell game that IS the entire U.S. tax system, which is the root of the whole problem. But... didn't Congress pass some corrupt legislation years ago that made it il…

> regurgitate tax information that has already been reported to the government

How does the government know my non-compensated travel and moving cost, wfh expenses, cash charity donations,etc...?

If people like you get the option to file directly with the IRS, fine by me so long as you don't make the rest of us pay more by losing the ability to play the game and save money.

Re: IRS tests free e-filing system that could compete with tax prep giants

#239

Post by jghn »

rapht wrote: post #224
lr1970 wrote: post #210

Earlier quoted context omitted.

> Yeah the American system absurd. “We have all the data but you still need to figure it out yourself and if you get it wrong you’ll get in trouble”. IRS knows all the income data only in simple cases like salaried employees with W-2 forms. If you are business owner or contractor the things can be more complicated and what IRS really knows is a guessing game. IRS is posturing and bluffing that they know everything an…

> IRS knows all the income data only in simple cases like salaried employees with W-2 forms. If you are business owner or contractor the things can be more complicated If you already can avoid the trouble for 50% (?) of the people who are in the standard case, it's already a massive win.

Exactly. Doing custom taxes could be opt-in. "Here's what we're going to charge you. If you think you owe less due to details we don't have, feel free to file the old way"

Re: IRS tests free e-filing system that could compete with tax prep giants

#240

Post by alistairSH »

elicash wrote: post #144
cstoner wrote: post #74

Earlier quoted context omitted.

The vast majority of people take the standard deduction, so offering a "here's what we think you owe, but if you disagree feel free to do the full return" form would be a huge efficiency gain. Your comment seems like a prime case of perfect being the enemy of good.

I know I'm likely better off with the standard deduction, but I still have to check both ways to know for sure that's the case for me. So standard deduction never actually saves me time even though post Trump tax reform I generally take it.

But surely, you're on the cusp of itemizing. Or have dramatically changing circumstances year to year. Otherwise, you're just wasting time.

FWIW, we are in the "on the cusp" boat. Another year or two and our mortgage interest vs principle equation will put us in the standard deduction range. And short of massive changes to either tax law or our income, we'll remain there.

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