8 ms·

Why do we have to take a stab at how much we owe in taxes when it’s known by tax collectors?

JAlexoid 7y ago
Because it's a racket. Both government and the CPA cronies are complicit. Pure and simple. Rational countries disallow these kinds of activities, and give you all the information about you that they have collected. But Intuit would lose a lot of $79 customers.
tstrimple 7y ago
In this case? Because they can then seize your property and make more money. In cases like income tax? Because tax prep companies spend money to ensure congress doesn't put them out of business. Perverse incentives abound.
- Domenic_S 7y ago
  The IRS has no idea how much you've donated to Goodwill, paid in medical expenses, or any other number of deductions.
  - JAlexoid 7y ago
    I'll grant you that they don't know your donations and major tax deductibles. But your medical expenses would have to be very high before you would even report them to IRS in the first place. Do you directly spend more than 10% of your gross income on medical expenses? No? Then you can't deduct them. In addition, most medical expense reporting is already reported to IRS. They literally get your whole pay stub information - gross pay, withholdings, 401k, medical deductions, pre-tax expenses, etc... PS: I ran a company in one of the "high regulation" EU countries and the amount of tax prep I do today in USA jumped from 30 min per year for myself and 3 employees to 30h per year myself! Oh... I didn't have to pay anything to file my tax documentation online and I got my estimated tax docs pre-filled by the tax authorities.
  - toomuchtodo 7y ago
    90% of taxpayers don't itemize with the standard deduction expanded to as high as it is now [1]. And if you want to get crazy, all of that data could be reported trivially to the IRS (my health insurance coverage already is [1095-B/C], reporting my health care spend from my insurance company is a few extra bytes on that form electronically sent). It is entirely reasonable to have tax collection agencies send a good faith estimate with a window of time for corrections if you have data they do not have. There are enough threads about the evil that is Intuit that their efforts to block the IRS from offering free tax prep need not be rehashed here. [1] https://taxfoundation.org/90-percent-taxpayers-projected-tcja-expanded-standard-deduction/ https://taxfoundation.org/90-percent-taxpayers-projected-tcj... (Nearly 90 Percent of Taxpayers Are Projected to Take the TCJA’s Expanded Standard Deduction)
    - Domenic_S 7y ago
      Most people don't itemize now, that's true, but the IRS has no way to know who will itemize and who won't. We could require all transactions that could theoretically be deductions be sent to the IRS, sure. "Trivially" is not the right word to describe it though. Think about charitable donations to tiny operations that have no IT department trying to figure out SFTP drops to the IRS. I have to correct my cost basis for RSUs almost every year from my eTrade paperwork. Could they do it correctly in the first place? Sure. Could it all be magically calculated for me someday, sure, anything's possible. But seeing how financial companies work from the inside, I chalk it up to incompetence more than Intuit's malice.
      - deleted 7y ago
        [deleted]
      - AnIdiotOnTheNet 7y ago
        > Most people don't itemize now, that's true, but the IRS has no way to know who will itemize and who won't. So just make the people who will itemize fill out a form and go through that whole process. Everyone else can just pay the bill and not worry about it.
      - compiler-guy 7y ago
giarc 7y ago
This happens all the time. I have a line of credit and I'll log on, view the current outstanding debt and pay it off in full. Some time later I'll log in again to see that I still owe $0.xx amount which is the interest I had accrued in the time it took the funds to move from one account to another. It sounds like this is the same situation this man faced, and yet he lost a $60,000 investment.
- toomuchtodo 7y ago
  It sounds like regulation is required that when an outstanding debt is shown, a payoff quote good for X days must be provided (and when you pay off, you receive a refund for excess interest depending on when the payment settles). My mortgage servicers do it, my auto loan provider does it, why is the county not required to do it? If you expect citizens to act in good faith in paying their debts, help them to do so inexpensively.
  - chroem- 7y ago
    Who regulates the regulators?
    - toomuchtodo 7y ago
      Citizens, activists, journalists. EDIT: @dredmorbius Thank you for the assist!
      - dredmorbius 7y ago
        And lawyers, courts, and judges. For completeness.
        deleted 7y ago
        [deleted]
- SilasX 7y ago
  I recently paid a toll online (TxTag), and I paid the "total balance", but I missed that you have to check a second box (the amount "in collections") in order to actually pay everything that's due, and then I got hit with further late fees for that part, with no warning that, after this payment, I was still accruing penalties. Screenshot of the interface: https://photos.app.goo.gl/yAMrNg4VkrP68SLf6 https://photos.app.goo.gl/yAMrNg4VkrP68SLf6
pornel 7y ago
Because lobbying is legal, and excellent ROI for TurboTax's maker.

Because it's a racket. Both government and the CPA cronies are complicit. Pure and simple. Rational countries disallow these kinds of activities, and give you all the information about you that they have collected. But Intuit would lose a lot of $79 customers.

tstrimple 7y ago

In this case? Because they can then seize your property and make more money. In cases like income tax? Because tax prep companies spend money to ensure congress doesn't put them out of business. Perverse incentives abound.

Domenic_S 7y ago
The IRS has no idea how much you've donated to Goodwill, paid in medical expenses, or any other number of deductions.
- JAlexoid 7y ago
  I'll grant you that they don't know your donations and major tax deductibles. But your medical expenses would have to be very high before you would even report them to IRS in the first place. Do you directly spend more than 10% of your gross income on medical expenses? No? Then you can't deduct them. In addition, most medical expense reporting is already reported to IRS. They literally get your whole pay stub information - gross pay, withholdings, 401k, medical deductions, pre-tax expenses, etc... PS: I ran a company in one of the "high regulation" EU countries and the amount of tax prep I do today in USA jumped from 30 min per year for myself and 3 employees to 30h per year myself! Oh... I didn't have to pay anything to file my tax documentation online and I got my estimated tax docs pre-filled by the tax authorities.
- toomuchtodo 7y ago
  90% of taxpayers don't itemize with the standard deduction expanded to as high as it is now [1]. And if you want to get crazy, all of that data could be reported trivially to the IRS (my health insurance coverage already is [1095-B/C], reporting my health care spend from my insurance company is a few extra bytes on that form electronically sent). It is entirely reasonable to have tax collection agencies send a good faith estimate with a window of time for corrections if you have data they do not have. There are enough threads about the evil that is Intuit that their efforts to block the IRS from offering free tax prep need not be rehashed here. [1] https://taxfoundation.org/90-percent-taxpayers-projected-tcja-expanded-standard-deduction/ https://taxfoundation.org/90-percent-taxpayers-projected-tcj... (Nearly 90 Percent of Taxpayers Are Projected to Take the TCJA’s Expanded Standard Deduction)
  - Domenic_S 7y ago
    Most people don't itemize now, that's true, but the IRS has no way to know who will itemize and who won't. We could require all transactions that could theoretically be deductions be sent to the IRS, sure. "Trivially" is not the right word to describe it though. Think about charitable donations to tiny operations that have no IT department trying to figure out SFTP drops to the IRS. I have to correct my cost basis for RSUs almost every year from my eTrade paperwork. Could they do it correctly in the first place? Sure. Could it all be magically calculated for me someday, sure, anything's possible. But seeing how financial companies work from the inside, I chalk it up to incompetence more than Intuit's malice.
    - deleted 7y ago
      [deleted]
    - AnIdiotOnTheNet 7y ago
      > Most people don't itemize now, that's true, but the IRS has no way to know who will itemize and who won't. So just make the people who will itemize fill out a form and go through that whole process. Everyone else can just pay the bill and not worry about it.
    - compiler-guy 7y ago

giarc 7y ago

This happens all the time. I have a line of credit and I'll log on, view the current outstanding debt and pay it off in full. Some time later I'll log in again to see that I still owe $0.xx amount which is the interest I had accrued in the time it took the funds to move from one account to another. It sounds like this is the same situation this man faced, and yet he lost a $60,000 investment.

toomuchtodo 7y ago
It sounds like regulation is required that when an outstanding debt is shown, a payoff quote good for X days must be provided (and when you pay off, you receive a refund for excess interest depending on when the payment settles). My mortgage servicers do it, my auto loan provider does it, why is the county not required to do it? If you expect citizens to act in good faith in paying their debts, help them to do so inexpensively.
- chroem- 7y ago
  Who regulates the regulators?
  - toomuchtodo 7y ago
    Citizens, activists, journalists. EDIT: @dredmorbius Thank you for the assist!
    - dredmorbius 7y ago
      And lawyers, courts, and judges. For completeness.
      - deleted 7y ago
        [deleted]
SilasX 7y ago
I recently paid a toll online (TxTag), and I paid the "total balance", but I missed that you have to check a second box (the amount "in collections") in order to actually pay everything that's due, and then I got hit with further late fees for that part, with no warning that, after this payment, I was still accruing penalties. Screenshot of the interface: https://photos.app.goo.gl/yAMrNg4VkrP68SLf6 https://photos.app.goo.gl/yAMrNg4VkrP68SLf6

pornel 7y ago

Because lobbying is legal, and excellent ROI for TurboTax's maker.