I am really ignorant about taxes in general, but i do not have to fill taxes. My government (Argentina) tells me how much i owe them and that's it. I get public health care, schooling, police, etc.
I do not think the problem of the US is how many employees the IRS has.
IRS lost 40% of IT staff, 80% of tech leaders in 'efficiency' shakeup
141–150 of 180 posts
Re: IRS lost 40% of IT staff, 80% of tech leaders in 'efficiency' shakeup
#142Earlier quoted context omitted.
That “415:1” is misleading and manipulative. The target rate of recovery is ~10:1, which is roughly what the IRS actually achieves. Audits are not an infinite money glitch. I used to work for a Federal audit agency that also recovered ~10:1. The reason we target 10:1 recovery on audits is because the return on funding additional audits beyond that falls off very sharply. Furthermore, more aggressive auditing greatly…
I'll admit - the 415:1 was pulled from an article detailing information from 2024 but the main point isn't the actual value but the fact that it's more than 1:1. When the IRS receives more funding the US government gets more money than what it is budgeting - this doesn't scale to infinity, at some point you'll have nearly complete auditing capture and more budget will just be burning money but we're no where near tha…
There are substantial indirect costs not accounted for in that ratio. Anywhere close to 1:1 is a large net loss to the government. Your mental model of the cost effectiveness of audits completely ignores large second-order effects.
The Federal government has a century of empirical data on this. They set their targets accordingly, which as a heuristic is roughly optimal at around 10:1. This may not be intuitive to you. It wasn’t to me either until I worked at a Federal audit agency. Most of it actually makes sense once you understand the bigger picture.
Re: IRS lost 40% of IT staff, 80% of tech leaders in 'efficiency' shakeup
#143Earlier quoted context omitted.
Is that 415:1 the rate of return of an audit, or the expense:revenue ratio of the IRS as a whole? I remember hearing some time ago that the expense ratio was 11% for the IRS? But 415:1 is way way less than 11%.
Captured revenue : cost to capture (could be an audit, billing for interest/fees due, etc. lots of avenues to capture revenue that is being missed). The problem is these metrics aren't really scalable productivity metrics. If you doubled cost, it might go to 100:1, if you tripled cost, it might go to 0.5:1 Each dollar generally gets more expensive to capture.
A key point is that there are large indirect costs that scale up rapidly that are not accounted for in these direct costs. These costs show up on the balance sheet somewhere else in the government, which makes the ROI for the auditors look much better than it actually is.
This is well-understood by the Federal government. When they set their targets they fully account for the growth of indirect costs created by the audit activity that don’t show up in the ratio.
Re: IRS lost 40% of IT staff, 80% of tech leaders in 'efficiency' shakeup
#144Earlier quoted context omitted.
I'll admit - the 415:1 was pulled from an article detailing information from 2024 but the main point isn't the actual value but the fact that it's more than 1:1. When the IRS receives more funding the US government gets more money than what it is budgeting - this doesn't scale to infinity, at some point you'll have nearly complete auditing capture and more budget will just be burning money but we're no where near tha…
There are substantial indirect costs not accounted for in that ratio. Anywhere close to 1:1 is a large net loss to the government. Your mental model of the cost effectiveness of audits completely ignores large second-order effects. The Federal government has a century of empirical data on this. They set their targets accordingly, which as a heuristic is roughly optimal at around 10:1. This may not be intuitive to you…
Second order effects is where the real damage is done.
That extra tax specialist could have been an additional production line worker, which would have created volume, which would have lowered prices, which would have made inputs for other goods cheaper, etc.
It is really wild when you think at a macro level, how much value is destroyed, all due to indirect costs which are extremely difficult to estimate.
Re: IRS lost 40% of IT staff, 80% of tech leaders in 'efficiency' shakeup
#145That's a shame. We can do better. Let's get those numbers up even higher.
Re: IRS lost 40% of IT staff, 80% of tech leaders in 'efficiency' shakeup
#146I'm starting to realize that an LLM isn't gonna take my job, but it's beginning to make the job aggravating enough to quit anyhow. So many managers have decided they're going to have an AI Miracle and aren't interested in hearing otherwise, no matter what staff tells them.
An LLM may take the interesting parts of my job but the parts that suck (dealing with people) will never be taken over by an LLM.
Indeed. Uber Eats now makes you talk to an AI bot among other customer-hostile issues. I've largely abandoned them. The last straw was a driver leaving the food at some random house I could not even identify from the picture. It made me wait 5 minutes before I could do anything at all. Then it made me talk to a bot.
When I eventually got it to issue a refund I realized they kept the service fees and driver tip. For an order I didn't even receive!
If that's the best they can do I'll just go pick it up myself.
Re: IRS lost 40% of IT staff, 80% of tech leaders in 'efficiency' shakeup
#147The thing that makes me nervous is the statement that they plan to use AI. AI? The thing that is mathematically incapable of perfection, on finance information, for which perfection is table stakes? Not to mention all the privacy issues (although that boat has sailed).
There are two forces at work:
1. Rich cheats for whom complexity is the goal. Reduced enforcement benefits them without the guilt. They can construct nonsensical schemes but if no one ever audits them they get to feel like they are paying what they owe despite being freeloaders.
2. Strangle the baby types: they hate the federal government. They deliberately want to reduce its income to force cuts to government spending (programs and staff). If they can they will cut other parts of the government then use that to justify reducing taxes. Nothing else matters except shrinking the federal government as much as possible via any means possible. These types also enjoy taking any government service that works and people like and making it as terrible as possible to kill popular support thus making it easier to cut the program entirely.
Re: IRS lost 40% of IT staff, 80% of tech leaders in 'efficiency' shakeup
#148Earlier quoted context omitted.
They built IRS Direct File which was a huge improvement. Then the administration killed it to serve tax prep companies.
Already could file free with free tax usa. Not that impressive. I'd be more impressed we got rid of income tax on salaried people entirely, or permit families the same type of deductions that businesses get, and only tax my actual profit - I can't deduct my overpriced housing, or my utilities unless I have a home office for ny own business.
> I'd be more impressed we got rid of income tax on salaried people ...
All amazing ideas (I mean that seriously) but unfortunately not within the IRS's power to make happen.
Re: IRS lost 40% of IT staff, 80% of tech leaders in 'efficiency' shakeup
#149Earlier quoted context omitted.
They built IRS Direct File which was a huge improvement. Then the administration killed it to serve tax prep companies.
Already could file free with free tax usa. Not that impressive. I'd be more impressed we got rid of income tax on salaried people entirely, or permit families the same type of deductions that businesses get, and only tax my actual profit - I can't deduct my overpriced housing, or my utilities unless I have a home office for ny own business.
You know FreeTaxUSA uses Direct File on the backend, right?
Re: IRS lost 40% of IT staff, 80% of tech leaders in 'efficiency' shakeup
#150Earlier quoted context omitted.
Can you provide proof of this “loyalty and power” at the IRS to Biden mentioned? Because without proof, it sounds like a “deep state” conspiracy theory without evidence.
I can provide evidence that the IRS and the majority of its employees have good relationships with democrats. The equivalent question is can you provide proof that ICE provides power and is loyal to Trump? I don’t think you would say that’s a deep state conspiracy.
OP talks about policing high net-worth individuals and organizations, causing most of the taxation headaches.
You’re shifting the discussion to organizations being political, hoping it becomes a divisive topic.
A well-worn and sleazy playbook to dodge any discussion of a problem that has exceeded the tipping point.