4 ms·

Why does the IRS not distribute the tax-filing workload across the whole year? Having everyone trying to complete their taxes on the same day seems wildly ineff

by jes 9y ago

Why does the IRS not distribute the tax-filing workload across the whole year? Having everyone trying to complete their taxes on the same day seems wildly inefficient and wasteful.

yohann305 9y ago
because people are people... Enough people will wait till the last day, no matter how much time you give them, enough to create a huge server spike
- mtrpcic 9y ago
  The point is that the "last day" is x/365 instead of x/1 (in the case that your taxes must be filed by your birth day for the given year, for example). You're right that there will ALWAYS be people waiting until the last minute, what he's proposing is that there are different "last minutes" for different people throughout the year so it's not an absurd number at one time.
ericcumbee 9y ago
Good point, in Georgia at least, Motor Vehicle Registration renewals (a form of tax) is done by the birth month of the vehicle’s registered owner.
throwaway9d0 9y ago
We don’t do that because it doesn’t make sense. How would that even work? Use the 2017 tax year as an example. You obviously can’t compute 2017’s taxes until the year is over. So how do you stagger? Is my deadline in January? That’s not really fair to me if someone else has a deadline in May.
- magduf 9y ago
  Well you wouldn't have the same tax year for everyone, because you'd have to give everyone the same amount of time to file to be fair. So, you could give everyone a different tax year. The forms already allow you to have a different tax year, though few people make use of that (I have no idea what qualifies people to have a different fiscal year, it might just be for companies, I don't know). Of course, this would be a giant mess because all the other entities that are tied to the standard tax year, namely everyone who communicates info to the IRS about you and files 1099-xyz forms about you and sends copies to you: your employer, your bank, your IRA/401k company, etc. I don't see how it'd be workable at all. Here's what would work much better: simplify the tax code (eliminating a lot of deductions), and make filing automatic for regular W-2 wage-earners, like they do in western European nations, where they just send you a pre-filled form, you make any corrections to it (to account for income they didn't know about), and then send it back if there's changes (otherwise they just go with what they already know about you). We don't do this in the US because we're corrupt: the tax-filing companies have bought off the politicians so they won't let the IRS do this.
  - dragonwriter 9y ago
    > The forms already allow you to have a different tax year, though few people make use of that (I have no idea what qualifies people to have a different fiscal year, it might just be for companies, I don't know) It's mostly for businesses (which includes individual tax payers as sole proprietorships), and the things looked to for non-automatic approvals are things like what your actual cycle of business is like. (For individual tax payers, the only automatically allowed changes are, IIRC, change back to a calendar year as tax yesr and changes to align with a spouses tax year with certain conditions.)
  - fma 9y ago
    For what it's worth...taxes for C-corp are due March 15th. https://turbotax.intuit.com/tax-tips/small-business-taxes/s-corp-federal-tax-filing-dates/L1U6tYGMt https://turbotax.intuit.com/tax-tips/small-business-taxes/s-...
clintonb 9y ago
How do you determine when an entity—person or company—needs to file? If the filing date is based on employer, what happens if I work for multiple employers or change jobs? If the filing is date is based on the filing entity, every employer now needs to keep track of my filing date. I got married. Do I need a new filing date, or does my household now need two returns instead of one? Sure, computers could solve this problem, but the human cost—changing accounting systems, communicating new dates, etc.—is not negligible. A simpler (and probably cheaper) solution might be to update the IRS systems to scale better for the week before and after tax day.
- tedunangst 9y ago
  Anyone mailing you tax forms in January already has your birthday, so it wouldn't be any more trouble for them to mail you that month.
  - clintonb 9y ago
    Problem extends beyond mailing forms. Everything linked to the tax year is now broken in this world. FSAs, employer-provided insurance, even general budgeting all have to change. Such changes will have an effect on the economy at the $100M scale, if not $1B. Why? Because the government couldn’t rent more server space? Buying a new data center would probably be cheaper than moving away from a single tax day. The proposed treatment is far worse than the disease.
slavik81 9y ago
Individuals can already change their tax year if they specifically request to do so, though it's contingent on IRS approval. I have no idea how likely the IRS is to grant approval, but clearly there are existing rules to handle non-calendar years. https://en.wikipedia.org/wiki/Fiscal_year#Tax_year https://en.wikipedia.org/wiki/Fiscal_year#Tax_year
- Y7ZCQtNo39 9y ago
  How does this work if you get something like a W2, which is issued for the calendar year? Let's say your "personal" tax year starts and ends July 1 of each year. Are you supposed to split your W2 in half and count each for each year? Sounds quite complex. I'm surprised they permit it.
dragonwriter 9y ago
> Why does the IRS not distribute the tax-filing workload across the whole year? Because IRS doesn't write the law, that’s Congress's job, and the tax filing deadlines (and the other deadlines that are coordinated relative to them, like the deadline for filing and supplying to taxpayers W-2s, 1099s, etc.) are set in law. As to why Congress doesn't do it, well, the fact that their are coordinated deadlines for multiple linked processes that different parties have to comply with would produce chaos if 1/12 of taxpayers had a tax deadline each month, and all the linked forms for those taxpayers, and the applicable tax years, had similarly staggered dates. OTOH, if you just gave some taxpayers longer after the availability of forms and end of the (single, consistent) tax year to file, there would be substantial fairness issues.
hinkley 9y ago
Companies can pick their own fiscal year, which helps spread out accountant “traffic” across the year. But be careful what you wish for. The IRS could decide you have to pay your taxes by midnight on your birthday (because it’s easy for you to remember) and then where would you be? That’s right. Drunk and filing your taxes.
ahallock 9y ago
Because that's an overly complex solution. Why not just fix the server capacity problem (or whatever is causing the outage)? Seems much simpler and they've been able to handle this in past years.

by jes 9y ago

Why does the IRS not distribute the tax-filing workload across the whole year? Having everyone trying to complete their taxes on the same day seems wildly inefficient and wasteful.

yohann305 9y ago

because people are people... Enough people will wait till the last day, no matter how much time you give them, enough to create a huge server spike

mtrpcic 9y ago
The point is that the "last day" is x/365 instead of x/1 (in the case that your taxes must be filed by your birth day for the given year, for example). You're right that there will ALWAYS be people waiting until the last minute, what he's proposing is that there are different "last minutes" for different people throughout the year so it's not an absurd number at one time.

ericcumbee 9y ago

Good point, in Georgia at least, Motor Vehicle Registration renewals (a form of tax) is done by the birth month of the vehicle’s registered owner.

throwaway9d0 9y ago

We don’t do that because it doesn’t make sense. How would that even work? Use the 2017 tax year as an example. You obviously can’t compute 2017’s taxes until the year is over. So how do you stagger? Is my deadline in January? That’s not really fair to me if someone else has a deadline in May.

magduf 9y ago
Well you wouldn't have the same tax year for everyone, because you'd have to give everyone the same amount of time to file to be fair. So, you could give everyone a different tax year. The forms already allow you to have a different tax year, though few people make use of that (I have no idea what qualifies people to have a different fiscal year, it might just be for companies, I don't know). Of course, this would be a giant mess because all the other entities that are tied to the standard tax year, namely everyone who communicates info to the IRS about you and files 1099-xyz forms about you and sends copies to you: your employer, your bank, your IRA/401k company, etc. I don't see how it'd be workable at all. Here's what would work much better: simplify the tax code (eliminating a lot of deductions), and make filing automatic for regular W-2 wage-earners, like they do in western European nations, where they just send you a pre-filled form, you make any corrections to it (to account for income they didn't know about), and then send it back if there's changes (otherwise they just go with what they already know about you). We don't do this in the US because we're corrupt: the tax-filing companies have bought off the politicians so they won't let the IRS do this.
- dragonwriter 9y ago
  > The forms already allow you to have a different tax year, though few people make use of that (I have no idea what qualifies people to have a different fiscal year, it might just be for companies, I don't know) It's mostly for businesses (which includes individual tax payers as sole proprietorships), and the things looked to for non-automatic approvals are things like what your actual cycle of business is like. (For individual tax payers, the only automatically allowed changes are, IIRC, change back to a calendar year as tax yesr and changes to align with a spouses tax year with certain conditions.)
- fma 9y ago
  For what it's worth...taxes for C-corp are due March 15th. https://turbotax.intuit.com/tax-tips/small-business-taxes/s-corp-federal-tax-filing-dates/L1U6tYGMt https://turbotax.intuit.com/tax-tips/small-business-taxes/s-...

clintonb 9y ago

How do you determine when an entity—person or company—needs to file? If the filing date is based on employer, what happens if I work for multiple employers or change jobs? If the filing is date is based on the filing entity, every employer now needs to keep track of my filing date. I got married. Do I need a new filing date, or does my household now need two returns instead of one? Sure, computers could solve this problem, but the human cost—changing accounting systems, communicating new dates, etc.—is not negligible. A simpler (and probably cheaper) solution might be to update the IRS systems to scale better for the week before and after tax day.

tedunangst 9y ago
Anyone mailing you tax forms in January already has your birthday, so it wouldn't be any more trouble for them to mail you that month.
- clintonb 9y ago
  Problem extends beyond mailing forms. Everything linked to the tax year is now broken in this world. FSAs, employer-provided insurance, even general budgeting all have to change. Such changes will have an effect on the economy at the $100M scale, if not $1B. Why? Because the government couldn’t rent more server space? Buying a new data center would probably be cheaper than moving away from a single tax day. The proposed treatment is far worse than the disease.

slavik81 9y ago

Individuals can already change their tax year if they specifically request to do so, though it's contingent on IRS approval. I have no idea how likely the IRS is to grant approval, but clearly there are existing rules to handle non-calendar years. https://en.wikipedia.org/wiki/Fiscal_year#Tax_year https://en.wikipedia.org/wiki/Fiscal_year#Tax_year

Y7ZCQtNo39 9y ago
How does this work if you get something like a W2, which is issued for the calendar year? Let's say your "personal" tax year starts and ends July 1 of each year. Are you supposed to split your W2 in half and count each for each year? Sounds quite complex. I'm surprised they permit it.

dragonwriter 9y ago

> Why does the IRS not distribute the tax-filing workload across the whole year? Because IRS doesn't write the law, that’s Congress's job, and the tax filing deadlines (and the other deadlines that are coordinated relative to them, like the deadline for filing and supplying to taxpayers W-2s, 1099s, etc.) are set in law. As to why Congress doesn't do it, well, the fact that their are coordinated deadlines for multiple linked processes that different parties have to comply with would produce chaos if 1/12 of taxpayers had a tax deadline each month, and all the linked forms for those taxpayers, and the applicable tax years, had similarly staggered dates. OTOH, if you just gave some taxpayers longer after the availability of forms and end of the (single, consistent) tax year to file, there would be substantial fairness issues.

hinkley 9y ago

Companies can pick their own fiscal year, which helps spread out accountant “traffic” across the year. But be careful what you wish for. The IRS could decide you have to pay your taxes by midnight on your birthday (because it’s easy for you to remember) and then where would you be? That’s right. Drunk and filing your taxes.

ahallock 9y ago

Because that's an overly complex solution. Why not just fix the server capacity problem (or whatever is causing the outage)? Seems much simpler and they've been able to handle this in past years.