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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

#171

Post by crazy1van »

nmcfarl wrote: post #155
ajross wrote: post #122

Earlier quoted context omitted.

No one pays penalties for simple mistakes. That's what FOX news tells you, but it's not true. We've made five-figure goofs on taxes in the past and a simple letter explaining the mistake (assuming it's an explainable mistake and you didn't get caught in actual attempted fraud) is enough to get the penalty waved.

Interestingly - my experience, on innocent mistakes, has been varied. I got hammered owing 6 or 8 hundred dollars for a $200 mistake when I was 10 years old and making money off of my paper route. (No, my parents didn't cover the bill nor do my taxes.) And I made $10,000 mistake five years ago and they said "Oh - whoops, pay your bill and be more careful next time" and then called it a day.

We've become a nation of men instead of a nation of laws.

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

#173

Post by jcr »

> The following month, an ad in The Sacramento Bee, paid for by the CCIA, cautioned "Taxpayers beware" and said ReadyReturn "could be very harmful to taxpayers." The ad pointed to a now-defunct website, taxthreat.com, opposing ReadyReturn.

Well, they won't be doing that again!

http://taxthreat.com

http://taxthreat.info

http://taxthreat.org

http://taxthreat.us

(Note To Self: Eventually, I might regret this.)

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

#175

Post by Domenic_S »

ajross wrote: post #153
chime wrote: post #148

Earlier quoted context omitted.

The penalty is in interest on the taxes. We had an incorrect entry in our 2010 return and had to pay about 12% in addition to the deficient amount. That would've been zero if they just verified it in 2011 and told us that there was an error. That is a penalty as far as I am concerned because I didn't get to choose the rate, I didn't get to fight it, and I didn't get to decide when it was due. It was an error on our p…

No. The current IRS interest rate for unpaid tax is 4%. You apparently paid almost three years late, which is getting pretty far afield from "explainable mistake" or "charge you a giant penalty for !=". Hell, if you had "cheated" and put that money in a mutual fund you'd have made a profit.

> You apparently paid almost three years late

Well that's the thing, the IRS can wait 3 years (or 6 if the error was bad enough), then look at your taxes, and pound you with 4%/year, instead of setting up a job to look at everything right away.

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

#176

Post by Hannan »

zieski wrote: post #132
Hannan wrote: post #110

Earlier quoted context omitted.

>> If less tax was paid than required you have to pay that + interest...which really isn't that unreasonable. If I pay too much, do I get interest back on the overage?

If you made the mistake of paying too much, why would the government be liable for the interest on that error?

It's not so much of a mistake, per se, but a function of dealing with estimated tax payments as a self-employed person with fluctuating income. I could very easily pay the amounts required, and then suffer a bad Q4 and have a much lower tax obligation than what I've paid in, all while meeting the mandatory minimums that the IRS requires me to pay quarterly.

Of course, I'm not allowed to just pay the full amount when due, which would solve the problem (for me, but potentially cause much larger problems for people and the government w.r.t. those who don't/can't budget appropriately).

It is nice to hear (from fotbr) that in the case of an actual mistake on behalf of the IRS that they actually pay interest... I did not know that, and wouldn't have expected it.

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

#177

Post by jebblue »

mjn wrote: post #66
jimmaswell wrote: post #53

Earlier quoted context omitted.

I've been to the DMV to get an ID and it wasn't bad at all. The worst I've seen happen to other people is a long line. What are the big problems people apparently have with the DMV all the time? I'm from NY if that makes a difference.

Most Texas DMVs are hugely understaffed, I assume deliberately because they don't want to fund more staff, so the wait is generally long, like 2-3 hours long, and the facilities you're waiting in are old and poorly maintained. However, that's pretty TX-specific; TX generally underprovisions government services. The CA DMV is much nicer, and you can even book a specific time online!

You can renew your license in Texas online every other cycle, the only reason it's every other is they want you to come in to refresh you photo every decade, so make an appointment.

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

#178

Post by mpyne »

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…

> If the government was able to fund it's IT operations at market rates, or pay outside the GS we'd all be much better off.

I can't speak to market rates but the Federal government does indeed have alternate pay schedules that they can use (in theory) for IT expertise. E.g. scientists and researches have their own specific pay grades for their work, "hourly" workers have FWS pay instead of GS, etc.

You're right that the government workers are generally underpaid in my experience though. I struggle with the same thing here in DC, except that I'm trying to fill GS-5 positions to do work which involves knowing lots of policies, manual interpretation of individualized orders, and having to do all of that in a "customer service" environment.

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

#179

Post by chime »

ajross wrote: post #122
noonespecial wrote: post #42

Earlier quoted context omitted.

You forgot the part about when == is != they get to charge you a giant penalty. That's no accident.

No one pays penalties for simple mistakes. That's what FOX news tells you, but it's not true. We've made five-figure goofs on taxes in the past and a simple letter explaining the mistake (assuming it's an explainable mistake and you didn't get caught in actual attempted fraud) is enough to get the penalty waved.

Since I can't reply to you in the other comment:

Like I said, it was an error on our part. I don't disagree that at all. I have absolutely no qualms in paying what I owed. But I wouldn't have paid a dollar over the amount owed if they had adequate systems in place to catch my typos and immediately notified me to fix it. But a lack of proper processes on their part meant it took them 2+ years to find an error and now I owe them taxes + interest. Whether I would've made or lost money if I had invested in mutual funds, stock market, or horse races is not the question. The problem is by making a mistake, I am now at their mercy for an unspecified length of time.

Also the error could not have been avoided by us. My wife was in school and we took the American Opportunity Tax Credit since it was higher than Lifetime Learning Credit. But turns out my wife's estranged stepdad had years ago, unbeknownst to my wife, taken Hope Credit for her by claiming her as a dependent. Long story short, we owed some taxes + interest after filing a correction.

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

#180

Post by ilaksh »

jdminhbg wrote: post #152
ilaksh wrote: post #136

This seems an easy to grasp example of how the free market actually benefits the wealthy disproportionately. I think its an over-simplified concept. Yes, we definitely need to remain free and diverse, but we need to figure out how to factor more actual science, especially science related to human needs, into our decision-making systems. Right now its just whoever manages to collect the most money buys the policies. I…

> This seems an easy to grasp example of how the free market... I can't even begin to grasp what part of lobbying the government to prop up your business via threats of penalties and imprisonment you are interpreting to be "the free market."

You aren't going to get something that works better without altering the fundamental structures. The way things are set up you can't take lobbying, money, and special interests out of government. Because every politician needs money for everything and there is one number tied to your bank account that goes up or down on the basis of how much people give you, with little to no accounting for what you did to get it.

What I am saying is that we need more variables. There needs to be some math equations and technology that actually support and automatically enforce the market ideal. Because making laws and relying on people to do the right thing just isn't adding up, since there is no money in doing the right thing. We need to improve the nature of money so that doing the right thing adds up.

This is an oft-repeated conversation but I just don't believe that fair and free market ideal ever actually existed.

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