If an entire industry can be killed by a public service, it probably didn't deserve to exist in the first place.
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Free IRS-run tax filing pilot to be available in 13 states
21–30 of 350 posts
Re: Free IRS-run tax filing pilot to be available in 13 states
#22If an entire industry can be killed by a public service, it probably didn't deserve to exist in the first place.
I disagree. If anything, this will compel the tax preparation software companies to get even better than before, and offer an increased value proposition. Competition benefits the consumer, and for a long while there's been limited, mostly fixed competition (via Brand awareness mostly). FreeTaxUSA is amazing, and cheap, but it does not yet have the brand power the incumbents do. It's unlikely the IRS offering will be…
Then it doesn’t sound like you disagree, because you don’t see this killing the industry.
Re: Free IRS-run tax filing pilot to be available in 13 states
#23Earlier quoted context omitted.
That seems like an overly broad statement. If the companies producing tax filing software were solving a problem for their users then why shouldn't they exist. Even with this new option being offered by the IRS there is still likely room for private companies to solve the same problem (tax filing) in a way which is perceived as better by some users and so still justify their existence.
>If the companies producing tax filing software were solving a problem for their users then why shouldn't they exist Because the "problem" they're solving has been solved in other countries without a profitable middleman. Intuit's continued existence in this space is dependent on their lobbying team.
That's a slightly different issue though. Just saying that because the government has offered a solution to the problem of filing taxes doesn't automatically imply that no other organizations that are solving the same problem deserve to exist.
I suppose if you are arguing that the one and only reason that tax preparation software is needed is because of Intuit's lobbying then that could be true, but Intuit's lobbying is only part of what has led to a complex tax code.
Re: Free IRS-run tax filing pilot to be available in 13 states
#24If an entire industry can be killed by a public service, it probably didn't deserve to exist in the first place.
I disagree. If anything, this will compel the tax preparation software companies to get even better than before, and offer an increased value proposition. Competition benefits the consumer, and for a long while there's been limited, mostly fixed competition (via Brand awareness mostly). FreeTaxUSA is amazing, and cheap, but it does not yet have the brand power the incumbents do. It's unlikely the IRS offering will be…
Lobbying by the tax prep companies is a big part of how it got so byzantine in the first place.
Re: Free IRS-run tax filing pilot to be available in 13 states
#25If an entire industry can be killed by a public service, it probably didn't deserve to exist in the first place.
The government could theoretically make anything a public service; that standard doesn't distinguish between one industry and another. I support the IRS's new service, as a general matter (i.e., without knowing details), but you raise a serious issue.
Ehh I can see GP's point though, 'can' comprises public opinion, taxpayer money; you can (try to) nationalise internet service provision say, wiping out ISPs, but it'll be a political issue and need support.
Re: Free IRS-run tax filing pilot to be available in 13 states
#26I've been using FreeTaxUSA for a while now to do my taxes, and I like it very much. (If you use TurboTax or H&R Block or something, I strongly recommend giving FreeTaxUSA a look). I was sort of wondering if the IRS would just buy them wholesale and use that as the free file software, since it's already "finished" and making another one would be duplicated effort. But is there precedent for that, the government just b…
>is there precedent for that, the government just buying a private company for its IP?
The government's preference would probably be to contract with them and license it.
Re: Free IRS-run tax filing pilot to be available in 13 states
#27If an entire industry can be killed by a public service, it probably didn't deserve to exist in the first place.
I disagree. If anything, this will compel the tax preparation software companies to get even better than before, and offer an increased value proposition. Competition benefits the consumer, and for a long while there's been limited, mostly fixed competition (via Brand awareness mostly). FreeTaxUSA is amazing, and cheap, but it does not yet have the brand power the incumbents do. It's unlikely the IRS offering will be…
I don't think you are actually disagreeing - the GP was saying that if they can't differentiate themselves enough to make consumers choose to pay, then no real loss.
Re: Free IRS-run tax filing pilot to be available in 13 states
#28Earlier quoted context omitted.
The government could theoretically make anything a public service; that standard doesn't distinguish between one industry and another. I support the IRS's new service, as a general matter (i.e., without knowing details), but you raise a serious issue.
Here's a better / more nuanced standard: If an industry exists because of the government and it can be replaced by a public service, then it doesn't deserve to exist. FWIW, public defenders are a public service used to interact with a government-created system, but the private legal defense industry is alive and well. So, it's not like making a public service is sufficient to kill any government-created industry.
> If an industry exists because of the government and it can be replaced by a public service, then it doesn't deserve to exist.
It's a start, but I'd need to think of examples. I'd say if the government creates inefficiencies, such as for basic tax filing, it should remove them if possible regardless of the effect on businesses profiting from them.
Off the top if my head, there could be cases where government makes a change that shifts the demand from one industry to another (that donates more to politicians).
Re: Free IRS-run tax filing pilot to be available in 13 states
#29If an entire industry can be killed by a public service, it probably didn't deserve to exist in the first place.
Maybe. Or maybe a lot of people will leave refunds on the table because the software will be bad at helping people identify their deductions. Also, my wife paid a joint filing online under my SSN, and the system couldn't figure that out and claimed we were in arrears. I'm not hopeful.
A lot of these services offer a “if we can find a better refund, pay us; if not, no charge”.
That model could still exist and if you are right, these business will still continue to be useful.
Re: Free IRS-run tax filing pilot to be available in 13 states
#30Earlier quoted context omitted.
Maybe. Or maybe a lot of people will leave refunds on the table because the software will be bad at helping people identify their deductions. Also, my wife paid a joint filing online under my SSN, and the system couldn't figure that out and claimed we were in arrears. I'm not hopeful.
How will I know the software is properly optimizing my deductions without a 30 second animated progress bar with the words "Optimizing Deductions" flashing on screen, while also advertising to me that I could be leaving savings on the table unless I upgrade to the TurboTax Pro Ultimate package for no up-front cost* * cost of TurboTax Pro Ultimate will be deducted from your refund amount, plus interest.
Generally speaking, if you are in a position where deductions and credits matter (ie. not standard deduction), you really aught to seek a professional to review your filing before submission, or at a minimum use two different softwares to compute your taxes and look for any disagreement (in theory, they should have the same output).
Either way, the $49 to use the software is trivial (under this situation) and often is only paid if you use that software to submit your taxes (meaning you can "get a second opinion" for free).