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

washingtonpost.com

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

#491

Post by ogig »

More and more I think the relative resilience of my country welfare has to be in big part caused by the excellent tax collection system we have. Hacienda, the Spanish IRS, website works perfectly with a national digital id certificate. You can solve any issues there, but for the majority of people there is nothing to think about, you receive a draft of the anual declaration and say yes. They will even go ahead and get information directly from some actors, like casinos and big corps, about who they are paying to, so you will get those automatically reflected in your declaration, or kindly be reminded they know about it. Big companies have strict requirements, in some cases daily declaration of transactions.

I can find obvious optimization flaws in every other branch of the government, but man, tax collection seems close to perfection here. Of course we could argue about this been a good or bad thing, but the engine is running perfectly tuned.

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

#492

Post by joshstrange »

smeagull wrote: post #456
mperham wrote: post #426

Earlier quoted context omitted.

It's NPR, gotta give both sides equal time.

That is the stupidest thing I have ever heard.

An yet I've watched NPR do exactly that many, many times. It's why I stopped listening to their podcasts. It's the whole "One side says it's raining the other side says it's not, more news at 11"-bullshit that I can't stand.

They present the facts better than most (CNN, Fox, MSNBC) but fall prey to the "both sides" bullshit time and time again trying to appear unbiased instead of living in reality.

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

#493

Post by ajmurmann »

bradfa wrote: post #486

If the federal government really wanted to save money on tax collection, improve the accuracy of tax collection, and drive the tax preparation industry out of business which would save every person and company significant money, then the federal government would just simplify the tax code. Any high school graduate should be smart enough to file their own taxes. That this is not true today is simply insane. For tax in…

The income bracket stuff is so crazy. It's just another way to redistribute wealth, but that's not palatable to the US public so it takes weird forms like this. It would be much more practical to abandon these piecemeal, market-distorting interventions and instead just do some smallish UBI. The money saved on overhead alone would probably be enormous.

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

#494

Post by prottog »

bradfa wrote: post #486

If the federal government really wanted to save money on tax collection, improve the accuracy of tax collection, and drive the tax preparation industry out of business which would save every person and company significant money, then the federal government would just simplify the tax code. Any high school graduate should be smart enough to file their own taxes. That this is not true today is simply insane. For tax in…

> Any high school graduate should be smart enough to file their own taxes. That this is not true today is simply insane.

The tax code is stupid, yes, but on the other hand one-fifth of high school graduates are functionally illiterate, and it would be hard for them to file their own taxes.

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

#496

Post by whiplash451 »

RajT88 wrote: post #445
rocketbop wrote: post #424

> A direct-to-IRS e-file system is wholly redundant and is nothing more than a solution in search of a problem," said Rick Heineman, a spokesman for Intuit, the company behind TurboTax. "That solution will unnecessarily cost taxpayers billions of dollars and especially harm the most vulnerable Americans." Extraordinary that he could say that sentence with what I assume was a straight face.

On some counts, he is not wrong. It will cost taxpayers billions of dollars. Those billions of dollars will be well spent, and may be a net 0 cost for taxpayers after the savings on eFiling. This is a revocation of the license to print money by the tax prep industry.

Billions of dollars is a massive overestimate.

It will indeed cost dozens of millions, but billions? Come on.

We're not building the F-35 here.

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

#497

Post by jjice »

bradfa wrote: post #486

If the federal government really wanted to save money on tax collection, improve the accuracy of tax collection, and drive the tax preparation industry out of business which would save every person and company significant money, then the federal government would just simplify the tax code. Any high school graduate should be smart enough to file their own taxes. That this is not true today is simply insane. For tax in…

I agree in concept for sure, but just simplifying our complex tax code is probably near impossible at this point unfortunately. Even for certain things like you mention with electric vehicle incentives, I don't believe you'd be able to pass saving on at purchase time because I believe for those (or maybe I'm think of solar or another green tax break), you need to own it for a period of time and savings come only with a certain amount of ownership. That stuff gets complicated immediately.

If it was simpler then these incentives would also be simpler, which would be great. It is a shame that so many regular W2 Americans will still have to run into some nonsense about an rollover IRA pro-rata rule or something that can cost you thousands of dollars if done wrong.

I guess what I'm trying to say is that it would be great, but not simplifying our existing tax code would be incredibly complex.

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

#498

Post by prottog »

ajmurmann wrote: post #493
bradfa wrote: post #486

If the federal government really wanted to save money on tax collection, improve the accuracy of tax collection, and drive the tax preparation industry out of business which would save every person and company significant money, then the federal government would just simplify the tax code. Any high school graduate should be smart enough to file their own taxes. That this is not true today is simply insane. For tax in…

The income bracket stuff is so crazy. It's just another way to redistribute wealth, but that's not palatable to the US public so it takes weird forms like this. It would be much more practical to abandon these piecemeal, market-distorting interventions and instead just do some smallish UBI. The money saved on overhead alone would probably be enormous.

> just do some smallish UBI

Smallish UBI is an oxymoron; I'm assuming by "smallish" you mean something that's insufficient to cover basic living expenses (the B in UBI).

I agree that we should do away with market-distorting interventions in places that aren't strategically critical to the nation as a whole (like food production), but politicians are woefully inadequate to the task of resisting the urge to meddle.

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

#499

Post by anonymouskimmer »

BigCryo wrote: post #473

[flagged]

Most government failures come about from too many people trying to add too many features for too many purposes. This is simply to file federal taxes. There might be some mission creep, but there can't be that much. Worse case scenario is that it's abandoned if the other party takes the Presidency.

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

#500

Post by morning-coffee »

RajT88 wrote: post #445
rocketbop wrote: post #424

> A direct-to-IRS e-file system is wholly redundant and is nothing more than a solution in search of a problem," said Rick Heineman, a spokesman for Intuit, the company behind TurboTax. "That solution will unnecessarily cost taxpayers billions of dollars and especially harm the most vulnerable Americans." Extraordinary that he could say that sentence with what I assume was a straight face.

On some counts, he is not wrong. It will cost taxpayers billions of dollars. Those billions of dollars will be well spent, and may be a net 0 cost for taxpayers after the savings on eFiling. This is a revocation of the license to print money by the tax prep industry.

One way for it not to cost tax payers billions of dollars to drastically simplify the tax code while they are at it. A big part of the cost is directly attributable to the complexity of the rules to be followed to figure out how much to pay based on your circumstances. Throw all that nonsense out and all that should be left is a relatively simple "You made X, so you owe X * rate"
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