Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

washingtonpost.com

Post reply on HN
Print view View original

541–550 of 589 posts

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

#541

Post by jcadam »

eh9 wrote: post #438
jcadam wrote: post #428

On the upside, if the tax-preparation industry is destroyed or severely diminished, it would make it easier to reform/simplify the tax code at a later date should a future government be so inclined. On the downside... no way would I use a tax preparation system provided by the IRS. It's bound to be a UX nightmare, like all government software, there's an obvious conflict of interest (the IRS has no reason to help fin…

I would. They already know how much I need to pay them/how much they owe me. It should be as simple as a text message I reply “y/n” to.

> It should be as simple as a text message I reply “y/n” to

I'm curious, what happens in your scenario if you reply 'no'?

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

#542

Post by phpisthebest »

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.

>>It will cost taxpayers billions of dollars.

Why on earth would, or should it cost that much? Unless they go full on "not invented here" and write it running on a IBM Mainframe running COBOL that they then pay an over priced consultant to somehow make web compatible

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

#543

Post by psxdude »

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 majority of high school graduates can probably easily file their taxes, since their income is likely entirely W-2.

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

#545

Post by TedDoesntTalk »

deanmoriarty wrote: post #531
whiplash451 wrote: post #496

Earlier quoted context omitted.

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.

It will absolutely cost more than a billion dollars. Have you seen the cost of other government web services?

And, like all software, it is not a one-time cost. Maintaining a system like this is an ongoing cost for decades to come. Well-spent money.

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

#546

Post by dylan604 »

wl wrote: post #510
RajT88 wrote: post #445

Earlier quoted context omitted.

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.

He's probably making the claim that his software, similar software, and tax preparers will find more deductions than the IRS system and cost taxpayers billions in lost refunds they're entitled to. Actually creating this system isn't going to cost billions of dollars.

that's being very generous, but i doubt that's what was truly meant. phrasing it that way would be a marketing statement on why to continue using their software over the free version from the gov't who would have a vested interest in you not using all of the deductions possible. those statements will absolutely be made soon. right now, they are only trying to get people to think it is a boondoggle that should be canceled like the superconducting super collider

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

#547

Post by phpisthebest »

seunosewa wrote: post #514
morning-coffee wrote: post #500

Earlier quoted context omitted.

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"

The complexity of the tax code is a result of negotiations between various political and commercial interests and lawmakers at the federal and state level. Simplifying it means changing a whole lot of laws touching taxation, which is practically impossible when the people negatively impacted by each change will be lobbying hard against. It's hard enough to get a single bill through congress. If they somehow achieved…

The complexity of the tax code is a result of the starting assumption that all income belongs to the government and anytime they exempt some kind or level of income that is a "cost" to the government that then has to be offset by other rules in the tax code

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

#548

Post by waterlilies »

This should have been started a decade ago. The in person tax preparation companies in particular have a shady pricing model and make their money off of two groups - People with more complex returns (to be expected), and helping themselves to a slice of welfare from Earned Income tax credit filers (not ok).

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

#549

Post by nulbyte »

bcraven wrote: post #479

The (fantastic) Reply All podcast episode #144, "Dark Pattern" covers tax returns.[0] In summary, the US government made a deal with private industry that as long as that industry offered a free tier of tax returns, the government would never create its own tax filing system. I wonder what has changed! [0] https://gimletmedia.com/shows/reply-all/6nhgol

Following controversy about the dark patterns tax preparers engaged in (thanks, ProPublica), the IRS negotiated a new agreement that eliminated the restriction on entering the tax prep software market themselves.

https://www.theverge.com/2020/1/1/21045779/irs-turbotax-free...

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

#550

Post by bradfa »

psxdude wrote: post #543
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 majority of high school graduates can probably easily file their taxes, since their income is likely entirely W-2.

If they're single, have only W-2 income, and have no children, then maybe... Just the child tax credit for 2022 requires filing an additional schedule 8812 (which is somehow referred to in some places as schedule 8) and in order to complete schedule 8812 you have to choose the correct worksheet and fill that in, but not file it. All of that results in a single credit value which is 1 line on the form 1040.

This is not simple: https://www.irs.gov/instructions/i1040s8

Post reply on HN