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How the Maker of TurboTax Fought Free, Simple Tax Filing

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Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#111

Post by pc86 »

smsm42 wrote: post #99
MBCook wrote: post #51

Earlier quoted context omitted.

Ignore all the deductions and other stuff. It's a mess and should be fixed, but for this simple issue, it's not relevant. I get W2s, 1099s, 1099-Rs, 1099-INTs, THX-1178s, ABC-123s, etc. I have to manually copy the stuff from boxes 1-30 on each of those onto my returns. I'd file my taxes in January expect it takes weeks for all the various organizations I deal with to make those and send them through the mail. I shoul…

I don't think they were fighting against online access to IRS data. I think they fought against pre-filled 1040 forms becoming default return without you actually having to do almost anything. The former is innocent and useful, the latter may be a bit more controversial, since the incentive of the IRS is to maximize the taxes, having IRS create the returns may not provide the best option for the people who use it.

> the incentive of the IRS is to maximize the taxes

I'm not sure this is the case. IRS funding is not a static percentage of tax revenue. Sure, the tax money goes into one big pot, but IRS funding is not dependent upon the money they bring in.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#112

Post by niggler »

toomuchtodo wrote: post #73
toomuchtodo wrote: post #48

Earlier quoted context omitted.

Login to IRS website, be shown all your data. Is this correct? Yes. No. buttons. Workflow is present to deal with incorrect data. The data is already submitted electronically by employers, brokerage/retirement asset management companies, states, etc. Why should I have to pay a private company (I'm looking at you Intuit) when the IRS should have the ability to provide the same service FOR FREE.

Response to niggler: Yeah, I'm cool streaming them my business transactions via Yodlee/Mint/my bank if it streamlines the process. They can already get the data if they want it (audit, etc).

Have you been through an audit? They don't just arbitrarily ask for all your records; they have questions about a specific number or set of numbers on your tax return and they ask you to substantiate it.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#113

Post by velocityrapture »

ScottWhigham wrote: post #40

To those saying "We should be more like Sweden/Finland!", I'd ask whether those countries have a tax system that is also based on using tax credits and deductions to lower your tax due? I don't know the tax codes in those countries but my guess is that, because they use the tax entity-created system, they do not have such a complicated tax code as the US. In the US, you have two sides of this: (1) the IRS, and (2) CP…

"Do you trust the IRS to say, "It's okay if we lose $5000 - you're happy, right? That's what matters!"? Of course not. Having the separation works in the US for this clear conflict of interest."

I really think you misunderstand the intent and mentality of the IRS. You seem to be projecting a capitalist objective to their actions with the motive of obtaining the maximum amount of money. The IRS does not have any direct incentives for bringing in more money.

If you are audited and the auditor finds you missed deductions, they will tell you. I would hope that information should be enough force a change in your perspective.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#114

Post by yardie »

navait wrote: post #31
MatthewPhillips wrote: post #18

Earlier quoted context omitted.

The government is not bad at code because of lobbying, they're bad at code because of fluctuating budgets, low salaries, and ridiculous processes.

The IRS was recruiting for interns at my university recently, who could eventually become full time workers. However, I found that at best I could enter as a GS-9, and those were positions with 5 years of expirience. The best salary I could get from that was $53,000 in NYC. Even the lowest offers my friends were getting were $60k in a low-cost area. If the government was able to fund it's IT operations at market rate…

The GS salaries aren't the complete picture once you factor in benefits and the pension. Traditionally, gov't salaries have been below market rate with the understanding that you and your family would be looked after. But with the current administration and legislation I wouldn't depend on that agreement remaining in place for longer.

If you're young and job hopping I wouldn't look at a gov't job just yet. 35 with a family of 4? I would seriously consider it.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#115

Post by Lagged2Death »

MatthewPhillips wrote: post #45
theorique wrote: post #41

Earlier quoted context omitted.

some government programs have excellent customer service as compared to some corporate equivalents I am sure we could find counterexamples here.

Ever been to the DMV?

DMV offices in many states are actually run as private businesses under contract to the state, not by the state government directly.

In my state, actual government offices are generally less seedy looking, better staffed, and friendlier than the universally-privately-run DMV offices are.

Deputy Registrars are independent contractors and are selected on a competitive basis as described in the Ohio Administrative Code and RFP. Deputy Registrars receive service fees of $3.50 for each vehicle, driver license and ID card transaction; and $0.90 for each vision screening performed. All fees are established in accordance with the Ohio Revised Code. Contracts are generally for two or three years per Section 4503.03 of the Ohio Revised Code.

http://bmv.ohio.gov/rfp.stm

All that said, the private contractors do get the job done, but they do it in a way that's efficient with employee time, not in a way that's efficient with customer time.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#116

Post by pc86 »

paulyg wrote: post #109

Many in this thread seem to be glazing over one important detail. This system would be opt-in. Don't trust the IRS? Have a lot of complicated deductions? Hire a CPA or use Turbo Tax or fill out the paper yourself. Approx 13% of filers used a 1040ez last year. This system is perfect for them. I would venture a guess that 1/2 of 1040a filers could also use it. Again though it is your (hopefully informed) choice to do s…

This is the biggest thing.

There is literally no reason to do this if it's opt-in.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#117

Post by krschultz »

MatthewPhillips wrote: post #45
theorique wrote: post #41

Earlier quoted context omitted.

some government programs have excellent customer service as compared to some corporate equivalents I am sure we could find counterexamples here.

Ever been to the DMV?

DMV in New Jersey is great. It really is. Completely painless for everything I've done there including getting a license, buying/selling cars, trailer registration, etc.

DMV in Connecticut is horrific. One of the worse "customer service" experience.

Which says to me, all of the reflexive "DMV sucks" comments are missing the real question - why does it suck in some states and not others?

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#118

Post by DanielBMarkham »

Couple of notes.

1) The IRS itself gets most of the tax advice wrong that it gives out to taxpayers

2) Paying taxes is one of the few transactional relationships you have with your government. If you ask me, a government representative should come to your office and you should pay him in cash, not hide and automate taxes so that they disappear.

3) There is a difference between a simple tax system and a tax system that is simple to operate. Taxpayers deserve a simple tax system. Continuing to automate the byzantine monster we already have is a terrible, terrible idea. How would reform ever take place?

4) Think for a minute what this implies: that a government agency that is responsible for collecting money should also be the sole source for computing how much money is owed. Where else would you allow such a conflict of interest? Should the police come by your house to determine what crimes might have been committed? Would you want inspections by the local health department of your private cookout? Right now we have administrative courts and such, but the principle is fairly clear: reporting by the citizen, oversight and acceptance of reporting by the government, and the court system to sort out problems. You don't start putting everything in one bag under the name of ease-of-operation. That's whacked.

5) I do not believe these candidates campaigned on this. What I believe they said (or meant) was that the system should be simple enough to eliminate the burden on the taxpayer, not that compliance with a bad system should be automated.

As a side note, have any of these people ever created software or worked for a project inside the IRS? The guys I know that have could tell you horror stories. Testing alone should give anybody who knows programming and the IRS nightmares. This is a tremendously bad idea, both from an execution and a structural standpoint. When something doesn't work, the answer isn't to just do it harder or throw computers at it.

Having said all of that, having the IRS give you the information that's already been entered once so you don't ever have to re-enter things? Excellent idea.

ADD: Completing taxes is not hard because we don't have technology applied in the correct manner. It's hard because the tax code is a complex, unintelligible POS. The only people benefitting from continuing to hide the POS that the tax code is are those folks who made it complex in the first place (And will continue to add to its complexity the more that we ignore it)

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#119

Post by cullenking »

pc86 wrote: post #111
smsm42 wrote: post #99

Earlier quoted context omitted.

I don't think they were fighting against online access to IRS data. I think they fought against pre-filled 1040 forms becoming default return without you actually having to do almost anything. The former is innocent and useful, the latter may be a bit more controversial, since the incentive of the IRS is to maximize the taxes, having IRS create the returns may not provide the best option for the people who use it.

> the incentive of the IRS is to maximize the taxes I'm not sure this is the case. IRS funding is not a static percentage of tax revenue. Sure, the tax money goes into one big pot, but IRS funding is not dependent upon the money they bring in.

Yes, but penalties do so there is a big incentive to maximize income from penalties. I was hit by this recently, by not filing a no-income return, and not certified mailing another return that was lost, but I wasn't alerted until 2 years later when they levied $4k in late fees. It used to be easy to get out of these penalties, but there are several accounts from uppers at the IRS that they have been sitting in meetings discussing cracking down on fee collection, no longer waiving fees etc.

Re: How the Maker of TurboTax Fought Free, Simple Tax Filing

#120

Post by hnal943 »

sixothree wrote: post #97
frogpelt wrote: post #90

Frankly, anyone who does trust any government hasn't had very much experience with them. At best, governments are inefficient and incompetent. At worst, they are run by politicians absorbed with self-interest. There are already scads of people trusting too much to other entities rather than figuring it out on their own. These people leave their tax withholdings at default levels, then walk down to the local Wal-Mart…

Let me guess, we should trust corporations?

What? This post criticized corporations (Jackson-Hewitt in particular). The point was that people need to take individual responsibility for their tax liability.
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