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

Would You Let the I.R.S. Prepare Your Taxes?

nytimes.com

Post reply on HN
Print view View original

91–100 of 127 posts

Re: Would You Let the I.R.S. Prepare Your Taxes?

#91

Post by mannykannot »

pktgen wrote: post #56
mannykannot wrote: post #53

Earlier quoted context omitted.

The US individual tax reporting process is an annual reminder to voters of what they pay in taxes, that cannot be easily ignored. I am sure that fiscally conservative politicians see this as an advantage to their cause, though they are unlikely to publicly say so.

Why wouldn't an IRS-prepared return do the same? You'd still have to look at the numbers and handle your payment/refund.

If people were perfectly rational, this might be the case, but I don't think receiving a statement has the same emotional impact, and is not as attention-grabbing and drawn-out, as going through the process of preparing a return - especially if, as for many people, you get a refund.

My guess is that relatively few people, of those who currently prepare their own returns, would invest as much time and effort into verifying an IRS-prepared return as they do in preparing one. I would also guess that a majority of swing voters prepare their own returns (I know, that's a fair amount of supposition on my part...)

Re: Would You Let the I.R.S. Prepare Your Taxes?

#92

Post by mrsteveman1 »

acheron wrote: post #32
rayiner wrote: post #14

People saying "Intuit controls the government" are missing the forest for the trees. The IRS doesn't compute your taxes and send you a bill because then you'll forget you ever had the money in the first place. Lots of people want to make paying taxes painful, so once a year you have to spend hours facing the reality of how much money the government is taking from your paycheck.[1] Intuit just jumped on the bandwagon.…

I would contend that's the opposite of what happens: most people get their taxes automatically withheld so they never saw the money in the first place, and then get a small refund after filing. If "we" wanted people to actually see how much money they were paying in taxes, we'd end automatic withholding.

It's been my understanding that a significant portion (perhaps approaching > 90%?) of the funding for federal spending during a specific year comes from those "pay as you go" sources, i.e. withholding and quarterly estimated tax payments for those not subject to withholding.

If that's the case, wouldn't the end of withholding (and presumably also quarterly estimated payments since they serve the same purpose) leave the federal government with a serious inability to "pay the bills" throughout that tax year?

Re: Would You Let the I.R.S. Prepare Your Taxes?

#93

Post by vonmoltke »

dragonwriter wrote: post #73
vonmoltke wrote: post #51

Earlier quoted context omitted.

No, they don't. They don't know how much I paid in sales tax, property tax, or mortgage interest. They don't know how much I donated to various charities. They don't know how much I made from cash jobs. They don't know how much my small side business made or lost. There are a whole slew of variables the IRS doesn't know until I tell them, and that they take my word for until and unless I get audited.

They actually do know many of those things--e.g., mortgage interest you get in a 1098 is also filed with the IRS. There is no reason the IRS couldn't pre-prepare returns based on what is already required to be filled with them and precomputed taxes based on them, and still provide you the option of providing additional data. It would be easier for those work no additional info but also for those who needed to put som…

I used to be in an investment partnership and prepared the tax returns for said partnership. We filled the return out and sent it to the IRS in parallel with the members getting their K1 forms. The members actually got the forms before the IRS did. In order for the IRS to know what each member should have on their return the IRS would have to process the business' return first.

All those other forms are the same way. 1098s and 1099 are sent to the IRS at the same time they are sent to the taxpayers. The IRS takes who knows how long to process those forms from all the various generators, and it is highly likely that most people are done with their tax returns before the IRS gets to the forms submitted by the banks and brokerages. Same thing again for W2s.

So yes, the IRS has all this information. Eventually. They do not have it by the deadline they set for people to make their tax accounts right.

Re: Would You Let the I.R.S. Prepare Your Taxes?

#94

Post by vonmoltke »

Alphasite_ wrote: post #52
vonmoltke wrote: post #51

Earlier quoted context omitted.

No, they don't. They don't know how much I paid in sales tax, property tax, or mortgage interest. They don't know how much I donated to various charities. They don't know how much I made from cash jobs. They don't know how much my small side business made or lost. There are a whole slew of variables the IRS doesn't know until I tell them, and that they take my word for until and unless I get audited.

And thats why you can do it your self. Forcing everyone to perform a repetitive task which can be easly automated (for 90% of people) is not a sensible default to take.

According to another post by someone who actually worked tax prep[1], it's more like 30%. In light of that and the delay in the IRS receiving the information from other parties, it does seem like a reasonable default.

The real problem is that the US tax code is horribly, unnecessarily complicated.

[1] https://news.ycombinator.com/item?id=9381067

Re: Would You Let the I.R.S. Prepare Your Taxes?

#95

Post by ern »

“It was a huge signal to politicians everywhere how much Intuit cares about this,” Mr. Bankman said. “People in other states who had been interested in it started saying, ‘We just don’t want to pick a fight with Intuit.’”

Intuit is not a human being. It is a corporation. A legal fiction. It doesn't "care" about anything, nor does it have fights picked with "it". It can't autonomously decide to spend millions on lobbying. There are executives who make decisions to keep the tax system complex through lobbying, so that they can extract wealth from the rest of us and enjoy it for themselves and their families.

I understand that this is a standard reporting convention, but reporters need to call the executives who make these decisions to account. They shouldn't go to corporate PR to do this.

Once the media and public refuse to buy into corporate person-hood, we could see corporations behaving better.

Re: Would You Let the I.R.S. Prepare Your Taxes?

#96

Post by JoeAltmaier »

ern wrote: post #95

“It was a huge signal to politicians everywhere how much Intuit cares about this,” Mr. Bankman said. “People in other states who had been interested in it started saying, ‘We just don’t want to pick a fight with Intuit.’” Intuit is not a human being. It is a corporation. A legal fiction. It doesn't "care" about anything, nor does it have fights picked with "it". It can't autonomously decide to spend millions on lobby…

Agreed. My litmus test is, unless you can name a person, then the statement of intent is meaningless. E.g. when I get emails from 'corporate HR' I delete them without reading them.

Re: Would You Let the I.R.S. Prepare Your Taxes?

#97

Post by mannykannot »

onion2k wrote: post #17
1971genocide wrote: post #6

As an non-american this baffles me. Why is there so much distrust towards the government, police, and military in US ? Isn't the US the oldest democracy ? Society is built on trust - once that doesn't exist then nothing gets done.

Isn't the US the oldest democracy? No. Not by about 2500 years in ancient Greece.

Ancient Greek democracies were slave-holding states - as was the US, initially.

Re: Would You Let the I.R.S. Prepare Your Taxes?

#98

Post by harryh »

rayiner wrote: post #83
harryh wrote: post #66

Earlier quoted context omitted.

I don't think the marriage penalty is patriarchal bullshit. It's just recognition that couples have lower combined expenses than two single people and hence have more income available to pay for taxes.

The tax code does not allow you to deduct cost of living expenses, as a general principle. So someone making $200k in Iowa has more disposable income than someone making $200k in NYC, but the Fed. Gov. taxes them the same. To me, it follows that the tax code shouldn't impose an extra burden because of an inference about your living expenses made from your marital status.

Why does it have to follow in that direction? Maybe because of the marriage penalty it follows that the tax code should take into account cost of living based on your zip code.

You've said several times that the tax code is set up to tax increases in wealth.

Re: Would You Let the I.R.S. Prepare Your Taxes?

#99

Post by harryh »

mrsteveman1 wrote: post #92
acheron wrote: post #32

Earlier quoted context omitted.

I would contend that's the opposite of what happens: most people get their taxes automatically withheld so they never saw the money in the first place, and then get a small refund after filing. If "we" wanted people to actually see how much money they were paying in taxes, we'd end automatic withholding.

It's been my understanding that a significant portion (perhaps approaching > 90%?) of the funding for federal spending during a specific year comes from those "pay as you go" sources, i.e. withholding and quarterly estimated tax payments for those not subject to withholding. If that's the case, wouldn't the end of withholding (and presumably also quarterly estimated payments since they serve the same purpose) leave t…

No. The gov't would just borrow against the expected revenue windfall in April.

The problem is that people wouldn't save enough money to pay their taxes and wouldn't be able to pay. It's the same reason your landlord expects you to pay monthly and won't let you pay yearly.

Re: Would You Let the I.R.S. Prepare Your Taxes?

#100

Post by dragonwriter »

vonmoltke wrote: post #93
dragonwriter wrote: post #73

Earlier quoted context omitted.

They actually do know many of those things--e.g., mortgage interest you get in a 1098 is also filed with the IRS. There is no reason the IRS couldn't pre-prepare returns based on what is already required to be filled with them and precomputed taxes based on them, and still provide you the option of providing additional data. It would be easier for those work no additional info but also for those who needed to put som…

I used to be in an investment partnership and prepared the tax returns for said partnership. We filled the return out and sent it to the IRS in parallel with the members getting their K1 forms. The members actually got the forms before the IRS did. In order for the IRS to know what each member should have on their return the IRS would have to process the business' return first. All those other forms are the same way.…

> So yes, the IRS has all this information. Eventually. They do not have it by the deadline they set for people to make their tax accounts right.

To the extent that is true for some information simply due to filing and delivery deadlines and processing times for various forms, the policy changes necessary to rectify it are fairly trivial to implement alongside any provision allowing IRS precomputation.

Post reply on HN