5 ms·

Could we not start a non-profit that builds software as good as H&R block and allows people to file their own taxes?

by atonse 10y ago

goda90 10y ago
Their response would be to lobby for a more complicated tax code so that competitor's struggle to keep up to date. It could become an arms race.
- imgabe 10y ago
  I'm as cynical as the next person, but seriously, how successful could they be approaching legislators with the idea "Make the tax code even more needlessly complicated to support our business"? Short of outright bribery I don't see any benefit to a politician for supporting something like that. There are a lot of complications in the tax code because with 300 million people there are a lot of special cases to account for. Adding additional complexity just for the sake of complexity seems like a non-starter.
  - briandear 10y ago
    Actually Milton Friedman gave a speech on that very topic -- the tax code is intentionally complicated because it provides political power.
    - WillyOnWheels 10y ago
      Milton Friedman partly invented automatic withholding of SSI taxes. Conservatives want taxes to be as painful as possible, to highlight the fact that the tax exists.
Spivak 10y ago
Sure, but there wouldn't really be a meaningful difference between that and the existing players since non-profits still need revenue to operate.
- Retric 10y ago
  At scale a non profit could be advertising supported on the login page. Jumping from 1,000 users to 100 million does not have massive cost increases. As soon as that non profit hit's critical mass the for profits are going to be stuck and thus stop lobbying for more complex rules. At which point the IRS can just automate the process for 95% of people.
silveira 10y ago
There are more than one change per day in the tax code [1]. This implies that at least every day, a tax specialist would need to evaluate, describe requirements, a developer would need to translate that into code, including testing, regression test, etc. The code base also only increases, which makes it increasingly difficult to change if not designed carefully. It's technically feasible, but such endeavor would require a substantial effort. This non-profit would need a lot of donations to support that. 1. http://www.huffingtonpost.com/2013/04/13/us-tax-code-has-changed-m_n_3070183.html http://www.huffingtonpost.com/2013/04/13/us-tax-code-has-cha...
- zhte415 10y ago
  Class action.
mabbo 10y ago
A lot of what H&R Block sells is experience in filing taxes, not just knowledge of how to do it. I have complex multi-country taxes to file (Canadian living in Canada, but with some income the IRS says is American income). H&R Block have a guy who has handled this exact kind of tax filing hundreds of times before. If I make any mis-steps in filing, the IRS is going to demand I give them thousands of dollars. I'm not paying H&R Block $600 (CAD) to fill out a piece of paper, I'm paying for the time and experience of someone who won't screw it up and knows how to fight back if the IRS has a problem with it. The root cause is that our tax system is overly complex and it doesn't need to be. We need to address that rather than build software to help make the complexity continue.
- atonse 10y ago
  Yes but you wouldn't benefit much by this simplified filing system anyway. The point is there are millions of people that just have 1 or 2 W-2 incomes and don't itemize, and can file a straight up 1040 which is what H&R block is fighting. In addition to you, people like me (S-corp owner) have complicated taxes and that's fine. We'll always pay. But doesn't mean there isn't a class of people who wouldn't benefit from this.
- kbenson 10y ago
  Yes. Taxes are complex enough in many situations that it incentivizes paying someone to take that complexity load. The simplest and most sure way to do this is to simplify taxes, but assuming the IRS will be able to to just do it all correctly for you seems naive to me. Depending on your tax situation, there's lots of information the IRS doesn't have (such as almost all deductions you might try). Having the IRS auto-fill forms for you seems like it's putting effort in the wrong place. If they can auto-fill forms for you, your taxes are probably pretty simple, but even then the forms may be complex enough that checking them may require most people use a tax preparer/checker of some sort. The real gains are from simplifying the taxes themselves, not just automating the form entry in the already simple cases. Making taxes simpler reduced the incentives for using a tax preparer, which is the right way to go about this.
- __david__ 10y ago
  > Canadian living in Canada, but with some income the IRS says is American income… So in that case, I'm curious what the penalty is for not paying. Presumably the IRS doesn't have the power to garnish wages from Canadian banks…
wyattjoh 10y ago
Up in Canada this little company made SimpleTax. Our family + friends used to use other paid solutions, but this was actually free. Great to see people helping other people =D https://simpletax.ca/ https://simpletax.ca/
- parthdesai 10y ago
  Looks pretty neat! I contacted the person i usually file my taxes through today. Could have saved 50 bucks :(

Could we not start a non-profit that builds software as good as H&R block and allows people to file their own taxes?

by atonse 10y ago

Could we not start a non-profit that builds software as good as H&R block and allows people to file their own taxes?

Their response would be to lobby for a more complicated tax code so that competitor's struggle to keep up to date. It could become an arms race.

imgabe 10y ago
I'm as cynical as the next person, but seriously, how successful could they be approaching legislators with the idea "Make the tax code even more needlessly complicated to support our business"? Short of outright bribery I don't see any benefit to a politician for supporting something like that. There are a lot of complications in the tax code because with 300 million people there are a lot of special cases to account for. Adding additional complexity just for the sake of complexity seems like a non-starter.
- briandear 10y ago
  Actually Milton Friedman gave a speech on that very topic -- the tax code is intentionally complicated because it provides political power.
  - WillyOnWheels 10y ago
    Milton Friedman partly invented automatic withholding of SSI taxes. Conservatives want taxes to be as painful as possible, to highlight the fact that the tax exists.

Spivak 10y ago

Sure, but there wouldn't really be a meaningful difference between that and the existing players since non-profits still need revenue to operate.

Retric 10y ago
At scale a non profit could be advertising supported on the login page. Jumping from 1,000 users to 100 million does not have massive cost increases. As soon as that non profit hit's critical mass the for profits are going to be stuck and thus stop lobbying for more complex rules. At which point the IRS can just automate the process for 95% of people.

silveira 10y ago

There are more than one change per day in the tax code [1]. This implies that at least every day, a tax specialist would need to evaluate, describe requirements, a developer would need to translate that into code, including testing, regression test, etc. The code base also only increases, which makes it increasingly difficult to change if not designed carefully. It's technically feasible, but such endeavor would require a substantial effort. This non-profit would need a lot of donations to support that. 1. http://www.huffingtonpost.com/2013/04/13/us-tax-code-has-changed-m_n_3070183.html http://www.huffingtonpost.com/2013/04/13/us-tax-code-has-cha...

zhte415 10y ago
Class action.

mabbo 10y ago

A lot of what H&R Block sells is experience in filing taxes, not just knowledge of how to do it. I have complex multi-country taxes to file (Canadian living in Canada, but with some income the IRS says is American income). H&R Block have a guy who has handled this exact kind of tax filing hundreds of times before. If I make any mis-steps in filing, the IRS is going to demand I give them thousands of dollars. I'm not paying H&R Block $600 (CAD) to fill out a piece of paper, I'm paying for the time and experience of someone who won't screw it up and knows how to fight back if the IRS has a problem with it. The root cause is that our tax system is overly complex and it doesn't need to be. We need to address that rather than build software to help make the complexity continue.

atonse 10y ago
Yes but you wouldn't benefit much by this simplified filing system anyway. The point is there are millions of people that just have 1 or 2 W-2 incomes and don't itemize, and can file a straight up 1040 which is what H&R block is fighting. In addition to you, people like me (S-corp owner) have complicated taxes and that's fine. We'll always pay. But doesn't mean there isn't a class of people who wouldn't benefit from this.
kbenson 10y ago
Yes. Taxes are complex enough in many situations that it incentivizes paying someone to take that complexity load. The simplest and most sure way to do this is to simplify taxes, but assuming the IRS will be able to to just do it all correctly for you seems naive to me. Depending on your tax situation, there's lots of information the IRS doesn't have (such as almost all deductions you might try). Having the IRS auto-fill forms for you seems like it's putting effort in the wrong place. If they can auto-fill forms for you, your taxes are probably pretty simple, but even then the forms may be complex enough that checking them may require most people use a tax preparer/checker of some sort. The real gains are from simplifying the taxes themselves, not just automating the form entry in the already simple cases. Making taxes simpler reduced the incentives for using a tax preparer, which is the right way to go about this.
__david__ 10y ago
> Canadian living in Canada, but with some income the IRS says is American income… So in that case, I'm curious what the penalty is for not paying. Presumably the IRS doesn't have the power to garnish wages from Canadian banks…

wyattjoh 10y ago

Up in Canada this little company made SimpleTax. Our family + friends used to use other paid solutions, but this was actually free. Great to see people helping other people =D https://simpletax.ca/ https://simpletax.ca/

parthdesai 10y ago
Looks pretty neat! I contacted the person i usually file my taxes through today. Could have saved 50 bucks :(