32 ms·

IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax

1721 points by danso 7y ago

tunesmith 7y ago
This is good news, right? I'm kind of amazed that good news is happening and that the lobbying forces (eventually) got defeated in this case.
- zymhan 7y ago
  Very much so, if you're opposed to H&R Block and Intuit's stranglehold on tax filing.
- zozbot234 7y ago
  The IRS is perhaps the one government agency that just does not fuck around. It's always sensible to make sure that filing for taxes is as smooth as possible, at least for those who wish to abide by the rules. Follow the money.
  - perfectstorm 7y ago
    unless you're extremely rich[1] or you're a Scientologist. 1 - https://www.propublica.org/article/irs-sorry-but-its-just-easier-and-cheaper-to-audit-the-poor https://www.propublica.org/article/irs-sorry-but-its-just-ea... 2 - https://www.nytimes.com/1997/03/09/us/scientology-s-puzzling-journey-from-tax-rebel-to-tax-exempt.html https://www.nytimes.com/1997/03/09/us/scientology-s-puzzling...
  - Ericson2314 7y ago
    Many agencies are well-intentioned but wear congressional straight jackets. It's not all Anjit Pai land.
    - taurath 7y ago
      Any further examples of regulators not captured by industry in 2019?
gtirloni 7y ago
> a years-old prohibition on the IRS creating its own online filing system has been scrapped What kind of insanity leads to this? The government is prohibited from creating software that helps its citizens? There's a lot wrong with Brazil but here I just download the government-provided software (that runs on Windows/Linux/Mac) and fill my taxes in 10-15 minutes. Every year they release a new version that is easier to use than the previous one.
- zymhan 7y ago
  The idea was lots of people could file for free using a private online service. Not many people at all ended up using it, since it wasn't in the company's interest to have people not pay them.
  - ppseafield 7y ago
    More accurate: Intuit told the federal government they would absolutely offer a free e-file tax service next to their pay service, and then they used several lies and manipulative techniques so that folks could not find it or even discover its existence.
    - sct202 7y ago
      Or if you do find it, you get intermodals with dark patterns upselling the paid service, and once you upgrade you can't downgrade back to the free-file version.
      - colejohnson66 7y ago
        Well, you can “downgrade”... You just have to start all over. Which IMO is absolutely atrocious.
  - smnrchrds 7y ago
    Of course they did not use it. Tax software companies went out of their way to make sure this would be the case. After all their shenanigans, they might as well have put Free File option in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying Beware of the Leopard. Related: TurboTax Deliberately Hid Its Free File Page From Search Engines https://www.propublica.org/article/turbotax-deliberately-hides-its-free-file-page-from-search-engines https://www.propublica.org/article/turbotax-deliberately-hid... HN discussion: https://news.ycombinator.com/item?id=19758126 https://news.ycombinator.com/item?id=19758126
GNOMES 7y ago
Not sure how factual Adam Ruins Everything is, but his skit on taxes is pretty damning for tax software companies: https://www.youtube.com/watch?v=Fj4anUL-LvY https://www.youtube.com/watch?v=Fj4anUL-LvY
- jjeaff 7y ago
  I think they get it mostly right for tax filing. But I find them to usually be pretty blinded by ideology when it comes to some topics and severely lacking in objectivity.
  - viraptor 7y ago
    Yeah, they range from very accurate to downright dangerous (the one about late pregnancies stands out as terrible). It's not a consistently good source.
- elamje 7y ago
  +1 to Adam Ruins Everything! Other commenters might scare you away, but it brings attention to a lot of things that go unnoticed by the general public. Of course, always check sources yourself, but there are some genuinely interesting things brought to your attention that you might have never thought about.
granzymes 7y ago
>Now companies are barred from hiding their free products from search engines such as Google, and a years-old prohibition on the IRS creating its own online filing system has been scrapped. >Under the new rules, participating companies also have to standardize the naming convention of their Free File version as “IRS Free File program delivered by [product name].” Respect to ProPublica for their commitment to this issue. I first learned of the Free File deal from their reporting and enjoyed the HN comments on their articles. On the 20-year fight to stop Americans from doing their taxes for free: https://news.ycombinator.com/item?id=21281411 https://news.ycombinator.com/item?id=21281411 On hiding Free File from search engines: https://news.ycombinator.com/item?id=19758126 https://news.ycombinator.com/item?id=19758126 On tax industry lobbying: https://news.ycombinator.com/item?id=21393758 https://news.ycombinator.com/item?id=21393758
- jfc 7y ago
  ProPublica reported that after they published this story, people eligible for free filing contacted TurboTax to get refunds. At first, they were able to get refunds of the fees that they paid but once word got out the customer service reps stonewalled them. So ProPublica invited readers to submit stories of their experiences with TurboTax customer service. Quality journalism.
  - epmaybe 7y ago
    Not only quality journalism, but a really solid look at what modern data-driven journalism should be like.
    - deleted 7y ago
      [deleted]
- Florin_Andrei 7y ago
  This is great news. The US is making great strides towards joining the rest of the civilized world in the 20th century, finally.
privateSFacct 7y ago
Fantastic news! Now let's have the IRS start building out their free e-file program and IDEALLY put some pressure or at least summarize what parts of the tax code are the most complex so they can be simplified. A lot of the tax code complexity comes from congress messing with the logic of taxing folks on their income. And yes, simplifying the tax code would get rid of loopholes like deduction that can exceed the cost of the item placed into service (!) which make zero sense AND create tax vs gaap difference that have to be tracked over long periods of time. Another one to get rid of - phantom LIFO inventory unless the inventory is real.
- sokoloff 7y ago
  Do you have a reference for the deduction greater than basis loophole? I spent a few minutes looking for it on google and couldn’t find a reference. It does seem non-sensical on the face, but I’d like to read more.
  - repsilat 7y ago
    One idea I though of in the past: if you have a very high income, your income tax rate can approach 50% (state+federal). If you donate appreciated assets to a DAF, and break the effects down by basis+gains, the numbers look like - 50ish% back after deducting the given unappreciated basis, - Selling the short-term gains would cost you half the profit, so the charitable deduction gets you roughly 100% of the after-tax profit from the trade back in your pocket. (Plus the upside of sending money to charity.) The math doesn't work out for long-term gains though, and obviously works best when the asset has appreciated strongly. Not sure about the legal treatment of partially-donated options spreads or other complex hedging tricks to manufacture these gains and offset them against a loss. Not tax advice etc, all just guesswork.
    - scottjg 7y ago
      my understanding was that the appreciated value of short-term capital gains aren't deductible as a donation. only the cost basis. that said, donating stock that has a long-term capital gain is still extremely tax advantageous.
dang 7y ago
HN has always been at war with TurboTax. Edit: looks like this line didn't go over so well. To avoid distractions, I'm going to move these links to another post and mark this subthread off topic. Links moved to https://news.ycombinator.com/item?id=21924055 https://news.ycombinator.com/item?id=21924055.
- rb808 7y ago
  I'm sure if it was a new turbotax.io startup it'd be popular.
- ng7j5d9 7y ago
  Yeah, and doctors have always been at war with disease. Good for them.
- SilasX 7y ago
  >HN has always been at war with TurboTax. "Snarky trivialization of activism on this issue" seems like the very kind of thing you'd normally discourage.
  - Infinitesimus 7y ago
    Assuming positive intentions, it's unlikely that this is a snarky trivialization and more likely that it is acknowledging/praising the persistence of the topic.
    - dang 7y ago
      Precisely. But what we always tell users is that intent doesn't communicate itself on the internet, so the burden is on the commenter to disambiguate.
  - dang 7y ago
    That certainly was not my meaning! Sometimes I add little twists into these things to make them less bone-crushingly tedious. Occasionally they cross a line. That's how I find out where the line is.
- 7y ago
jjeaff 7y ago
There is no reason the IRS shouldn't have a simple, online fillable 1099EZ that makes the calculations and validations for you. And while their at it, match the SSN to the w2 info that they have on file. This would take care of 80% of the population. Just don't outsource it. I'm sure USDS could have it ready in less than a year.
- rdtsc 7y ago
  100% agree. To me they seem to be playing this perverse game of knowing how much you owe based on your W-2s then not telling you, waiting for you to file and guess how much you owe just right. If you guess wrong tough luck, you get penalties years later.
  - tomjakubowski 7y ago
    When I've guessed wrong, I've also been rewarded with unexpected large dollar figure checks in the mail. I did once make an error that cost me, and someone at the IRS was excellent in working together over the phone to get things square.
    - rdtsc 7y ago
      > I've also been rewarded with unexpected large dollar figure checks in the mail. But did they also send any interest? Notice if you owe them, you also owe interest, unless you negotiate. If they owe you, you don't usually get the interest sent do you.
      - philwelch 7y ago
        If you get a tax return at all, you've essentially given the federal government an interest-free loan all year.
        rstupek 7y ago
        And most people think of that money they get back as a bonus! Like it was never their money in the first place but a gift from the government
choppaface 7y ago
There's a large backstory documented by (mostly) propublica, some of it is here: https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free https://www.propublica.org/article/inside-turbotax-20-year-f... Essentially: * IRS wanted to open tax software business to private companies. * Intuit has a variety of products with similar names and each has a free offering for a specific set of tax payers (e.g. income below some number). IRS + US Gov bought the story. * Intuit caught doing a variety of false advertising, misleading documentation, adversarial website editing, etc. They make it impossibly hard to find which is the free version of whatever you need. So this is a big first step away from the draconian Intuit monopoly. It would be interesting to know what precipitated this change.
- danso 7y ago
  The recent movement seems to be heavily precipitated by the discovery that Intuit was hiding its Free File pages (apparently first found by this Redditor [0]), with the stories sparking investigations at the federal and state level. [0] https://np.reddit.com/r/technology/comments/bgj6oz/turbotax_is_blocking_search_engines_from_indexing/ https://np.reddit.com/r/technology/comments/bgj6oz/turbotax_...
astura 7y ago
This is great news! I really hope the IRS creates it's own site, they would need to advertise it heavily though, way way too many people think eFile = TurboTax. There's already vastly better options out there but very few people use them or know about them. Edit: I think the real killer feature would be to pre-populate the "IRS e-file" with the information the IRS already knows about you. That would get people paying attention.
- mulmen 7y ago
  Care to mention any of these better options?
  - astura 7y ago
    I can only speak to myself. TaxHawk ( https://www.taxhawk.com https://www.taxhawk.com ) is what I've been using for like almost a decade. Federal filing is free, state filing is only is $15. You're free to use the free federal option without having to pay for the state option. No tiers, no dark patterns, no upsells. The UI is fantastic (and the UI is the entire point of using software, otherwise I'd just fill out my 1040 by hand like I did for many years). You can pull up the 1040 for any of your previous returns. I've mentioned it on HN before and one reply said they used it to file because of my recommendation and it was both better than TurboTax and saved them like $100.
    - griegm 7y ago
      Thanks for sharing, I'll try it out this year!
pkaye 7y ago
They should implement something for the simple cases first. Like the standard deductions, no investment income, no business income scenario. That will probably handle 40% of the filers with one page of input.
ortusdux 7y ago
We need pre-filled tax forms. https://priceonomics.com/the-stanford-professor-who-fought-the-tax-lobby/ https://priceonomics.com/the-stanford-professor-who-fought-t...
- twblalock 7y ago
  We need a simpler tax code with fewer deductions before a simple tax form will make sense. Otherwise people will just get their simple tax form and pay TurboTax or someone else to squeeze every penny out of the deductions.
- CivBase 7y ago
  If the government can pre-fill my tax form, why should I even have to file taxes to begin with? Just send me the pre-filled information each year and tell me I need to correct it if it's wrong. Otherwise, I shouldn't have to do anything.
  - ChainsawBaby 7y ago
    Basically how we do it in Norway, and probably lots of other countries that does it automagically. 1st of April every year we get our pre-filled tax form (digitally), which we have to look over. If we find it to be alright, we don't have to do anything (deadline the 30th of April) and the taxes have been filed. All financial institutions sends data to our tax office, so it's all there.
neolefty 7y ago
Wow I would love to hear the inside story on this one. I think we're all motivated by both survival and doing good, and I see an overall trend towards more doing good, as survival gets easier. Is this a case of that? Who drove it? What internal processes allowed public service to overcome corrupt lobbying pressure?
xtracto 7y ago
This USA tax thing has always baffled me... it is the exact definition of why we pay taxes: for the government to provide services that are common to the country´s citizens. There´s nothing more common than tax collection: rich, middle class or poor. Why wouldn't citizens demand a public tax filing process? Even in Mexico we have an automagical tax filing process that makes: a) The great majority of the population who perceives a salary not needing to file taxes. b) For the rest of the people, those who don't do anything fancy, just click one button in a portal to do the filing, and everything is calculated by the tax authority. c) For the small percentage that do more complex things (I'll say it is between 5% and 10% of the population) still can do it in the portal for free, or hire an accountant.
- deleted 7y ago
  [deleted]
- skizm 7y ago
  An actual argument I've heard from TurboTax shills is that tons of people underpay taxes now with the self report system, and having the government pre-fill forms for you to rubber stamp would effectively increase taxes on the working class.
  - mehhh 7y ago
    Great, sounds like TurboTax will still be able to compete if the IRS gives people tax filings precalculated, as TurboTax can say "We can save you $XXX!"
    - fedorareis 7y ago
      I’m sure for a large percentage of Americans like myself the “$XXX” that they saved you is just the standard deduction. Maybe at some point in my life an itemized deduction will actually save me more money, but every time I have filed taxes TurboTax looks at my info and decides that the standard deduction is the best I’m going to get. So for some percentage of Americans TurboTax won’t be able to compete because they can’t save you more than the IRS already did with its deductions.
Waterluvian 7y ago
So in Canada I pay about $15 CAD to file for my household. It takes 20 mins and is submitted digitally. Is this the equivalent of the issue in the USA or is it more expensive or something? I get that free filing is kind of obvious as a right, but the online service really does give me $15 of value so I've never thought to be upset by it.
- lykr0n 7y ago
  Yeah. TubroTax is around $40 to file. CreditKarma offers their own version which is free. The controversy is that the IRS bound its own hands in saying it couldn't make its own filing software. I see no problems with private companies charging a Fee to provide a better service.
  - everybodyknows 7y ago
    The Credit Karma blurb is here: https://www.creditkarma.com/tax https://www.creditkarma.com/tax But -- the hard bits are state-specific support, and the supplementals K-1, 6250, et al. Anyone have first-hand experience with CreditKarma tax filing? There's also TaxAct -- anyone tried it? https://www.taxact.com/ https://www.taxact.com/
    - klipt 7y ago
      I used TaxAct in the past but they're now almost as expensive as TurboTax. I now use https://www.freetaxusa.com https://www.freetaxusa.com - a little less hand holding than TurboTax, but if you know what you're doing it handles almost every situation and is, as advertised, free.
    - repsilat 7y ago
      > Anyone have first-hand experience with CreditKarma tax filing? I've used it for the last 3 years in California. Quite simple, free, supports backdoor Roths. Tax returns were quickly accepted and paid out into my bank account. Dunno about more complex use-cases (I don't own a home or a business, and I work in one state year-round), but definitely worth a look.
girishso 7y ago
TurboTax will be remembered as a classic example of extreme capitalism.
- nojvek 7y ago
  or extreme lobbying
mucholove 7y ago
One of the sad things behind the story: Bill Campbell was Chairman of the board at Inuit while this was going on. His story is inspiring. I’m a capitalist at heart. But I’m not a monopolist or a crony—and hope not to become one. The best among us aren’t perfect. We should take this as a cautionary tale.
- everybodyknows 7y ago
  The vexing question: Why does there seem to be no space in the market for an honest, quality vendor? As in Fastmail, Costco, or the pre-Amazon Whole Foods? Are there so few customers willing to pay a truthful, higher sticker price that such a business cannot be sustained?
  - froindt 7y ago
    Freetaxusa was a very easy experience last year. Federal is free, state is $10. I haven't read their privacy policy. Perhaps a profile of me was sold to dozens of companies - but I think they fit your criteria pretty well.
- chmaynard 7y ago
  The mantra for Intuit, indeed for every for-profit company in the Valley, is to grow or die. Even a rockstar exec like Bill Campbell couldn't escape that imperative. Intuit decided they had to keep growing their market to survive and they chose to go after the huge majority of taxpayers who really didn't need their services. Once that decision was made, the logic of eliminating your competition followed as a matter of course, and the IRS itself was and still is their biggest potential competitor.
ars 7y ago
The article says the IRS will make its own free filing system. So how is there still a "deal" with tax software companies? Isn't the whole deal that the IRS would not make such software?
ChuckMcM 7y ago
From the article: The addendum also expressly bars the companies from “engaging in any practice” that would exclude their Free File offerings “from an organic internet search.” Note the term "organic" which suggests the page "naturally" ranks in the first few hits. The agreement doesn't seem to prevent Intuit and others from both buying ads to populate the top of search results and SEO'ing the crap out of it to make their stuff rank at the top "organically." I see this as a good example of how policy makers write policy with good intentions but without a fundamental understanding of how gamed Internet search is in order to make it profitable.
- randallsquared 7y ago
  > I see this as a good example of how policy makers write policy with good intentions but without a fundamental understanding [...] I agree with your argument in the general case, but in this case that seems like what they would want: not to exclude the possibility of advertising or SEO for the other products, but to rule out doing reverse SEO (or just robots.txt to exclude it from search engines) on the Free File pages.
wnevets 7y ago
I just want to move to a system where the IRS sends me a bill, they know how much I owe them.
- hanniabu 7y ago
  Yeah there's no reason that in 2019 we should even have to file. Everything should be automated for 85% of the population and they just receive the bill. Only a small percent would actually need to file due to certain circumstances mostly by people that are using special business structures to minimize taxes.
- bcyn 7y ago
  Assuming you're a traditional W2 worker, yes. But many people have other income sources such that the IRS doesn't know how much you owe until you report it.
alistairSH 7y ago
In the US, we've had decades of (largely GOP) messaging that the government can't do anything properly. A substantial portion of the population believes it. As noted in a sibling comment, the IRS could pre-fill forms that would be correct for the vast majority of tax payers (who take the standard deduction/don't itemize, have a single job, and no other edge cases). These people should not be paying TurboTax either way - the forms they need to submit are relatively straight-forward. People who do need a CPA would have to hire one regardless. TurboTax is literally just ripping off average tax payers.
- komali2 7y ago
  It's pretty disgusting. Summed up in one of my favorite tweets, which went something like > Gov: you owe us money. It's called taxes > Ctzn: oh ok, how much do I owe you? > Gov: you have to figure it out > Ctzn: oh well, then I owe you 0 > Gov: no, no, we know how much you owe, you have to figure it out, and by the way if you get it wrong you go to jail
  - seanmcdirmid 7y ago
    You can have the irs figure out how much you owe if your income is simple enough. This is similar to a lot of countries just taxing you at your income sources and not requiring you to file a return. However, the American system has a lot of deductions, exemptions, status modifiers, etc... so you often need to pay less than that, hence the need for everyone to do tax returns.
  - nightski 7y ago
    You don't go to jail for filing a wrong number accidentally. Only if you are intentionally lying/hiding income. I know people who didn't pay tax FOR THEIR BUSINESS for several years and they settled the debt for much less than they owed and definitely did not go to jail. This is just misinformation.
    - roddds 7y ago
      It's called hyperbole.
nvarsj 7y ago
Now if only I could file my expat taxes via some public service. The filing requirement in the Obama/Trump era for expats is literally insane, and I'd say even Kafkaesque in the truest sense. The way the government treats its expats w.r.t. tax is inhumane and makes me really dislike being an American.
- seanmcdirmid 7y ago
  How did filing requirements change since 2008? I didn’t notice any differences. Also, you can use online tax preparations now as they seem to support 2555 and 1116 forms now, which wasn’t an option in 2008.
  - nvarsj 7y ago
    I believe 2008 saw the start of mass enforcement of FBAR/FACTA, stricter requirements on foreign banks to report American accounts, etc. Things got much worse with Trump and the Republican congress - with sections 962/965 (transition tax/GILTI tax), and 5471 complexity going through the roof. Anyone with a small business, or any sort of ownership stake, was hit hard by these terribly written laws and their onerous filing requirements. Being an American expat is a giant liability these days, which is sad, because I enjoy being American. Expats will unfortunately never have much of a voice, and I don't expect things to ever improve, only get worse.
dang 7y ago
75 days ago: https://news.ycombinator.com/item?id=21281411 https://news.ycombinator.com/item?id=21281411 6 months ago: https://news.ycombinator.com/item?id=20119916 https://news.ycombinator.com/item?id=20119916 8 months ago: https://news.ycombinator.com/item?id=19613725 https://news.ycombinator.com/item?id=19613725 9 months ago: https://news.ycombinator.com/item?id=19392673 https://news.ycombinator.com/item?id=19392673 2018: https://news.ycombinator.com/item?id=17751383 https://news.ycombinator.com/item?id=17751383 2017: https://news.ycombinator.com/item?id=13853150 https://news.ycombinator.com/item?id=13853150 2015: https://news.ycombinator.com/item?id=9381437 https://news.ycombinator.com/item?id=9381437 https://news.ycombinator.com/item?id=9380232 https://news.ycombinator.com/item?id=9380232 2014: https://news.ycombinator.com/item?id=7595440 https://news.ycombinator.com/item?id=7595440 2013: https://news.ycombinator.com/item?id=5443203 https://news.ycombinator.com/item?id=5443203 I'm sure there are others... The current submission passes the significant new information test, so we won't count it as a dupe. https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=by%3Adang%20%22significant%20new%20information%22&sort=byDate&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...
SeanFerree 7y ago
Wow! Not good for TurboTax
jorblumesea 7y ago
The both parties argument is so stale at this point. While the Dems might not be perfect, they aren't actively sabotaging our democracy. The Republicans just passed a huge tax bill and what did it do? Oh, huge handouts to the wealthy. Nice!
- briandear 7y ago
  Sabotaging democracy? You mean like attempting to overturn a presidential election?
  - juststop 7y ago
    Just stop. Just take this kind of absolute disregard for facts somewhere else.
  - allemagne 7y ago
    It might not really need to be said, but this absurd line about "overturning an election" has absolutely no basis in reality. The U.S. constitution very clearly gives the legislative branch the power to impeach and remove any sitting president. Period. If you don't like it then call for an amendment or a new constitutional convention.
  - jorblumesea 7y ago
    I mean, Gerrymandering, voter suppression... Hard to believe they're acting in any democratic fashion. Btw, impeachment is a well documented power of the legislative branch.
    - zchrykng 7y ago
      If you've paid attention to the history of gerrymandering, you would know that both sides do it when in power and complain about it when not.
      - ergothus 7y ago
        "Both have done it" is not the same as "both have done it equally". Nor does it mean "we should therefore be okay with it". If we support the idea of Democracy, we should stop abuses that harm democracy, even if it prevents abuses those we otherwise agree with have taken advantage of.
dartdartdart 7y ago
BEST NEWS OF THE DECADE
xrd 7y ago
It's so insane to me that Grover Norquist somehow lobbied against free tax filing provided by the IRS. It escapes all logic that he didn't pay attention to what other countries do. It escapes all logic that he didn't think for a moment about what the cost would be to citizens in (more or less direct payments to Intuit) and that's not considering the incalculable cost of just gathering up all this documentation and put it into TurboTax. Billions of dollars in lost man power? Billions of dollars in wealth transfers from middle and lower class people? Probably more like Trillions. Norquist didn't succeed in drowning the government in the bathtub. He DID successfully manage to keep the entire US citizenry drowning in billions of hours of wasted effort and billions of dollars of unnecessary expenditures. Good work, Norquist!
- danieltillett 7y ago
  It is not insane, just not obvious what Grover’s aim is. He is anti-tax for a large number of reasons. By making paying tax painful for the majority of people he is trying to increase the percentage of the population that hate the IRS and taxes. All very sane if your aim is to lower taxes.
  - stonogo 7y ago
    Only if you don't care who you hurt on the way to your goal. We may have different definitions of sanity.
    - danieltillett 7y ago
      Now we are getting to the question if his aim is ethical or not. I think his obsession with reducing taxation at all costs is misguided and often counterproductive, but it is not insane.
  - xrd 7y ago
    Ok, this makes me feel like maybe he had intention and thought behind this. I can honestly align with that thinking if he was doing it for this reason. It seems like the world only works with subterfuge, sadly. Is it impossible to be honest about what you want to do and move people in that direction, or is it only possible to motivate change by lying to people. I don't love Grover Norquist, but I thought it was interesting/open-minded of him to see Burning Man for himself. And, I align with the idea of reducing taxes. So, this makes me feel like he was not just a useful idiot if he actually did it for this reason. But, still, what a cost to bear. And, does the long term goal of reducing taxation by causing people to hate the IRS get him any closer to actually reducing taxes and/or getting rid of the IRS? Obviously, that did not happen.
EamonnMR 7y ago
In the constant stream of bad news, it's easy to miss a positive update like this.
gigatexal 7y ago
This is the best news to Start the new year!!!
m0zg 7y ago
Just fucking send me my filled out tax forms, like they do in other countries, you already know everything, and where you're wrong, I'll contest.
- PaulDavisThe1st 7y ago
  Doesn't work so well for the self-employed, alas.
  - m0zg 7y ago
    Only if working with individuals. If I, as a consultant, work with a company, that company requires a W9 from me, and they have to report what they paid me. And I also report what I paid myself in salary and pay federal taxes from every paycheck I make out to myself. So at least for me, they know everything there is to know.
    - PaulDavisThe1st 7y ago
      I sell stuff (software, so not really stuff). I certainly file my quarterly estimated taxes (state and federal), but until I file my annual return, the government has no idea how much I've actually earned, nor what my expenses were. Consequently, they're in no position to tell me what I owe them until I've filed my entire return. Perhaps what the commenter meant was "we should fill out forms detailing income + expenses (where applicable) and the government should compute our taxes for us". I'm mostly good with that idea.
      - m0zg 7y ago
        Yes, this won't be 100%. But I'd say easily 99% of people could get all this tax bullshit automated away and they wouldn't have to pay Intuit a single penny.
kpennell 7y ago
propublica is a good one to donate to!
PaulDavisThe1st 7y ago
My pet peeve: I've used freefillableforms or whatever it is called for several years. It's the only (free, online) option (I think) for someone in my income bracket. It's not a bad system, but it is deliberately hobbled: it will do about 90% of the math for you, and about 90% of the "put this computed value on line N of some other form". But ... not the remaining 10%. And there will be no errors if you fail to do them (other than your return being incorrect). I don't know if it is better or worse to offer a deliberately crippled system.
gdy 7y ago
Here is an idea from Russia: flat 13% income tax with deductible educational, medical, real estate and some other expenses.
ourmandave 7y ago
I always use TurboTax online to complete my taxes and then copy all their info into freefillableforms.com to file for free.
danShumway 7y ago
Excellent news, and congrats to Propublica for in no small part making it happen. This wasn't just a shady operation -- Turbotax openly lied to customers about its free file program, it deliberately suppressed the program from search results, it lied to veterans. It was 100% acting in bad faith during negotiations with the IRS. Sometimes topics like this end up becoming kind of ideological or partisan; but in this case I feel like Intuit is just very objectively in the wrong, and that the IRS agreement for the free file program very objectively just was not working. I myself contacted Turbotax about their free edition and got personally lied to about the differences between the programs.[0] > In this call, I was told that the form availability between the Free File and Free edition were the same, and I wouldn't be eligible for either. To check this, I created a second account and added the same forms to the Free File program. I was never charged or told that I was ineligible. All of the forms were added successfully. [0]: https://www.youtube.com/watch?v=Piuv7KH37D4 https://www.youtube.com/watch?v=Piuv7KH37D4
- cactus2093 7y ago
  There's a good Planet Money episode that explains how surprisingly it is still a partisan issue. The Republican argument, at least from certain prominent people in the party, is that if paying taxes gets too easy the average American will be less likely to push their representatives to lower taxes or to oppose new taxes that get proposed.
  - RandomTisk 7y ago
    Which 'prominent people'? It sounds like an incredibly silly argument, one I had never heard of before.
    - testis321 7y ago
      Honestly, knowing how much taxes you pay is important (and as i said in a comment above, problematic, if people don't know). But this can be solved by autofiling taxes, and then sending a yearly report: you earned X, paid Y taxes, out of those, Z goes to this, Q to that, W to that other thing, you've used these government services this year, that cost that much money, etc.
OrgNet 7y ago
The IRS already have all the information it needs to automatically file returns for many Americans... does that mean that some of us will just be able to confirm that our automatically generated return is correct?
fiatjaf 7y ago
Every part of this story is wrong.
- mttjj 7y ago
  Could you maybe expand on this a little bit? Otherwise, your comment just comes off as SPAM.
pascalxus 7y ago
And, don't forget, there's always CalFile. I've heard it's provided by the Gov for Free!! One of the posters here had mentioned it earlier in the year and I don't want to forget
monkeycantype 7y ago
This is at number two on the front page, I'm wondering how much this is driven by a specific interest in this story, or whether other people are having the same, probably childish emotional reaction that I am, an almost dumbfounded disbelief that a major institution is not charging headlong towards death cult dystopia. A public institution has acted seemingly for public good. Regardless of whether its driven as much by shame as by duty and altruism, - I'm deeply confused about how to think about this. Is this a trick? Sleight of hand to distract, to funnel the non wealthy towards a presentation of the tax code that obscures the existence of incantations to the elder gods known only to operating thetan level VIII accountants? Is this a bellwether of positive change, or a an eddy current in the river Styx? Is this just normal institutional behavior? Is Ragnarök 2020 just a delusional end-of-days narrative I've bought into? I can't believe we've made it this far - Y2k didn't kick off, I was sure at least Agile would be dead by now, am I 'dude you\'re overthinking this'? Am I in a distributed doomsday cult? oh, also - happy new year.
- CivBase 7y ago
  Politicians aren't evil, just self-interested like most people. It just so happens that the nature of their job sometimes means serving others' interests is in their own best interest. Sometimes. Happy new year.
smadge 7y ago
Great. I hope the IRS is serious about this and finally makes the tax software industry obsolete.
macinjosh 7y ago
Now we're just left with this illogical part of the tax system: The State: Pay me taxes or I'll put you in a cage! Citizen: OK, how much do you need? The State: You tell me, but if you're wrong you'll regret it!
- CivBase 7y ago
  Exactly. This made sense decades ago when it would have been extremely costly to keep track of all the data necessary to calculate taxes. I don't want the government to make a free solution to help me file taxes. I want the government to make a solution that prevents me from having to file taxes in the first place!
- onion2k 7y ago
  This change means the state will stop saying "you tell me" and start telling people.
  - CivBase 7y ago
    Do you have a source for this? I can't find any mention of it in the linked article.
- jpmoral 7y ago
  In Australia you do your taxes and then a few weeks later you either get a refund or a bill. If there's anything that doesn't add up in your filing they may ask you about it. Nothing to regret unless you knowingly filed incorrect information. Edit: a lot of it is pre-filled (payroll, bank interest, investment distributions in my case), you just need to check against your own records.
- dmoy 7y ago
  If you mess up your taxes, the IRS actually has a very reasonable process for making amends, with penalties that aren't egregious at all. It's mostly a small interest (like a couple percent above prime or something), which caps at 25% of the unpaid amount. In fact it's the same interest they pay you if you were due refund and they were slow giving it back. My main complaint is that it's a super, super slow process. They'll follow up years later, and each back and forth takes like three months.
darthreid 7y ago
wow, this is great towards fixing the US tax system and the byzantine means most Americans have to go thru to simply file taxes
zacharycohn 7y ago
Good riddance.
Trias11 7y ago
What kind of bribe and to whom does private corporation need to make to make IRS sign non compete agreement with them?
jdorfman 7y ago
I just donated to ProPublica. Amazing work.
cable2600 7y ago
Turbo Tax only works with Windows 10 and 8.1 with the 2019 version. Shutting out Windows 7 and under filers who can use the IRS free file system.
msolujic 7y ago
This is great news. NPR Planet money podcast cover this topic in detail past 2 years [1] https://www.npr.org/sections/money/2019/04/03/709656642/episode-760-tax-hero https://www.npr.org/sections/money/2019/04/03/709656642/epis...
dbuder 7y ago
I thought this would take decades more to break free from, and during this administration, colour me surprised.
thinkegictalk 7y ago
http://bit.ly/2M25Xvz http://bit.ly/2M25Xvz Obesity has become an epidemic in America. Men and Women gain pounds of weight in no time. They find it way harder to lose weight. The weight loss industry, like the gym, fitness centers, dieticians, and hypnosis programs are fooling their victims
schredder 7y ago
This probably explains the TurboTax ad I saw on YouTube today where the only word spoken was “free,” over and over again.
edisonjoao 7y ago
no ones' ever happy

1721 points by danso 7y ago

This is good news, right? I'm kind of amazed that good news is happening and that the lobbying forces (eventually) got defeated in this case.

zymhan 7y ago
Very much so, if you're opposed to H&R Block and Intuit's stranglehold on tax filing.
zozbot234 7y ago
The IRS is perhaps the one government agency that just does not fuck around. It's always sensible to make sure that filing for taxes is as smooth as possible, at least for those who wish to abide by the rules. Follow the money.
- perfectstorm 7y ago
  unless you're extremely rich[1] or you're a Scientologist. 1 - https://www.propublica.org/article/irs-sorry-but-its-just-easier-and-cheaper-to-audit-the-poor https://www.propublica.org/article/irs-sorry-but-its-just-ea... 2 - https://www.nytimes.com/1997/03/09/us/scientology-s-puzzling-journey-from-tax-rebel-to-tax-exempt.html https://www.nytimes.com/1997/03/09/us/scientology-s-puzzling...
- Ericson2314 7y ago
  Many agencies are well-intentioned but wear congressional straight jackets. It's not all Anjit Pai land.
  - taurath 7y ago
    Any further examples of regulators not captured by industry in 2019?

gtirloni 7y ago

> a years-old prohibition on the IRS creating its own online filing system has been scrapped What kind of insanity leads to this? The government is prohibited from creating software that helps its citizens? There's a lot wrong with Brazil but here I just download the government-provided software (that runs on Windows/Linux/Mac) and fill my taxes in 10-15 minutes. Every year they release a new version that is easier to use than the previous one.

zymhan 7y ago
The idea was lots of people could file for free using a private online service. Not many people at all ended up using it, since it wasn't in the company's interest to have people not pay them.
- ppseafield 7y ago
  More accurate: Intuit told the federal government they would absolutely offer a free e-file tax service next to their pay service, and then they used several lies and manipulative techniques so that folks could not find it or even discover its existence.
  - sct202 7y ago
    Or if you do find it, you get intermodals with dark patterns upselling the paid service, and once you upgrade you can't downgrade back to the free-file version.
    - colejohnson66 7y ago
      Well, you can “downgrade”... You just have to start all over. Which IMO is absolutely atrocious.
- smnrchrds 7y ago
  Of course they did not use it. Tax software companies went out of their way to make sure this would be the case. After all their shenanigans, they might as well have put Free File option in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying Beware of the Leopard. Related: TurboTax Deliberately Hid Its Free File Page From Search Engines https://www.propublica.org/article/turbotax-deliberately-hides-its-free-file-page-from-search-engines https://www.propublica.org/article/turbotax-deliberately-hid... HN discussion: https://news.ycombinator.com/item?id=19758126 https://news.ycombinator.com/item?id=19758126

GNOMES 7y ago

Not sure how factual Adam Ruins Everything is, but his skit on taxes is pretty damning for tax software companies: https://www.youtube.com/watch?v=Fj4anUL-LvY https://www.youtube.com/watch?v=Fj4anUL-LvY

jjeaff 7y ago
I think they get it mostly right for tax filing. But I find them to usually be pretty blinded by ideology when it comes to some topics and severely lacking in objectivity.
- viraptor 7y ago
  Yeah, they range from very accurate to downright dangerous (the one about late pregnancies stands out as terrible). It's not a consistently good source.
elamje 7y ago
+1 to Adam Ruins Everything! Other commenters might scare you away, but it brings attention to a lot of things that go unnoticed by the general public. Of course, always check sources yourself, but there are some genuinely interesting things brought to your attention that you might have never thought about.

granzymes 7y ago

>Now companies are barred from hiding their free products from search engines such as Google, and a years-old prohibition on the IRS creating its own online filing system has been scrapped. >Under the new rules, participating companies also have to standardize the naming convention of their Free File version as “IRS Free File program delivered by [product name].” Respect to ProPublica for their commitment to this issue. I first learned of the Free File deal from their reporting and enjoyed the HN comments on their articles. On the 20-year fight to stop Americans from doing their taxes for free: https://news.ycombinator.com/item?id=21281411 https://news.ycombinator.com/item?id=21281411 On hiding Free File from search engines: https://news.ycombinator.com/item?id=19758126 https://news.ycombinator.com/item?id=19758126 On tax industry lobbying: https://news.ycombinator.com/item?id=21393758 https://news.ycombinator.com/item?id=21393758

jfc 7y ago
ProPublica reported that after they published this story, people eligible for free filing contacted TurboTax to get refunds. At first, they were able to get refunds of the fees that they paid but once word got out the customer service reps stonewalled them. So ProPublica invited readers to submit stories of their experiences with TurboTax customer service. Quality journalism.
- epmaybe 7y ago
  Not only quality journalism, but a really solid look at what modern data-driven journalism should be like.
  - deleted 7y ago
    [deleted]
Florin_Andrei 7y ago
This is great news. The US is making great strides towards joining the rest of the civilized world in the 20th century, finally.

privateSFacct 7y ago

Fantastic news! Now let's have the IRS start building out their free e-file program and IDEALLY put some pressure or at least summarize what parts of the tax code are the most complex so they can be simplified. A lot of the tax code complexity comes from congress messing with the logic of taxing folks on their income. And yes, simplifying the tax code would get rid of loopholes like deduction that can exceed the cost of the item placed into service (!) which make zero sense AND create tax vs gaap difference that have to be tracked over long periods of time. Another one to get rid of - phantom LIFO inventory unless the inventory is real.

sokoloff 7y ago
Do you have a reference for the deduction greater than basis loophole? I spent a few minutes looking for it on google and couldn’t find a reference. It does seem non-sensical on the face, but I’d like to read more.
- repsilat 7y ago
  One idea I though of in the past: if you have a very high income, your income tax rate can approach 50% (state+federal). If you donate appreciated assets to a DAF, and break the effects down by basis+gains, the numbers look like - 50ish% back after deducting the given unappreciated basis, - Selling the short-term gains would cost you half the profit, so the charitable deduction gets you roughly 100% of the after-tax profit from the trade back in your pocket. (Plus the upside of sending money to charity.) The math doesn't work out for long-term gains though, and obviously works best when the asset has appreciated strongly. Not sure about the legal treatment of partially-donated options spreads or other complex hedging tricks to manufacture these gains and offset them against a loss. Not tax advice etc, all just guesswork.
  - scottjg 7y ago
    my understanding was that the appreciated value of short-term capital gains aren't deductible as a donation. only the cost basis. that said, donating stock that has a long-term capital gain is still extremely tax advantageous.

dang 7y ago

HN has always been at war with TurboTax. Edit: looks like this line didn't go over so well. To avoid distractions, I'm going to move these links to another post and mark this subthread off topic. Links moved to https://news.ycombinator.com/item?id=21924055 https://news.ycombinator.com/item?id=21924055.

rb808 7y ago
I'm sure if it was a new turbotax.io startup it'd be popular.
ng7j5d9 7y ago
Yeah, and doctors have always been at war with disease. Good for them.
SilasX 7y ago
>HN has always been at war with TurboTax. "Snarky trivialization of activism on this issue" seems like the very kind of thing you'd normally discourage.
- Infinitesimus 7y ago
  Assuming positive intentions, it's unlikely that this is a snarky trivialization and more likely that it is acknowledging/praising the persistence of the topic.
  - dang 7y ago
    Precisely. But what we always tell users is that intent doesn't communicate itself on the internet, so the burden is on the commenter to disambiguate.
- dang 7y ago
  That certainly was not my meaning! Sometimes I add little twists into these things to make them less bone-crushingly tedious. Occasionally they cross a line. That's how I find out where the line is.
7y ago

jjeaff 7y ago

There is no reason the IRS shouldn't have a simple, online fillable 1099EZ that makes the calculations and validations for you. And while their at it, match the SSN to the w2 info that they have on file. This would take care of 80% of the population. Just don't outsource it. I'm sure USDS could have it ready in less than a year.

rdtsc 7y ago
100% agree. To me they seem to be playing this perverse game of knowing how much you owe based on your W-2s then not telling you, waiting for you to file and guess how much you owe just right. If you guess wrong tough luck, you get penalties years later.
- tomjakubowski 7y ago
  When I've guessed wrong, I've also been rewarded with unexpected large dollar figure checks in the mail. I did once make an error that cost me, and someone at the IRS was excellent in working together over the phone to get things square.
  - rdtsc 7y ago
    > I've also been rewarded with unexpected large dollar figure checks in the mail. But did they also send any interest? Notice if you owe them, you also owe interest, unless you negotiate. If they owe you, you don't usually get the interest sent do you.
    - philwelch 7y ago
      If you get a tax return at all, you've essentially given the federal government an interest-free loan all year.
      - rstupek 7y ago
        And most people think of that money they get back as a bonus! Like it was never their money in the first place but a gift from the government

choppaface 7y ago

There's a large backstory documented by (mostly) propublica, some of it is here: https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free https://www.propublica.org/article/inside-turbotax-20-year-f... Essentially: * IRS wanted to open tax software business to private companies. * Intuit has a variety of products with similar names and each has a free offering for a specific set of tax payers (e.g. income below some number). IRS + US Gov bought the story. * Intuit caught doing a variety of false advertising, misleading documentation, adversarial website editing, etc. They make it impossibly hard to find which is the free version of whatever you need. So this is a big first step away from the draconian Intuit monopoly. It would be interesting to know what precipitated this change.

danso 7y ago
The recent movement seems to be heavily precipitated by the discovery that Intuit was hiding its Free File pages (apparently first found by this Redditor [0]), with the stories sparking investigations at the federal and state level. [0] https://np.reddit.com/r/technology/comments/bgj6oz/turbotax_is_blocking_search_engines_from_indexing/ https://np.reddit.com/r/technology/comments/bgj6oz/turbotax_...

astura 7y ago

This is great news! I really hope the IRS creates it's own site, they would need to advertise it heavily though, way way too many people think eFile = TurboTax. There's already vastly better options out there but very few people use them or know about them. Edit: I think the real killer feature would be to pre-populate the "IRS e-file" with the information the IRS already knows about you. That would get people paying attention.

mulmen 7y ago
Care to mention any of these better options?
- astura 7y ago
  I can only speak to myself. TaxHawk ( https://www.taxhawk.com https://www.taxhawk.com ) is what I've been using for like almost a decade. Federal filing is free, state filing is only is $15. You're free to use the free federal option without having to pay for the state option. No tiers, no dark patterns, no upsells. The UI is fantastic (and the UI is the entire point of using software, otherwise I'd just fill out my 1040 by hand like I did for many years). You can pull up the 1040 for any of your previous returns. I've mentioned it on HN before and one reply said they used it to file because of my recommendation and it was both better than TurboTax and saved them like $100.
  - griegm 7y ago
    Thanks for sharing, I'll try it out this year!

pkaye 7y ago

They should implement something for the simple cases first. Like the standard deductions, no investment income, no business income scenario. That will probably handle 40% of the filers with one page of input.

ortusdux 7y ago

We need pre-filled tax forms. https://priceonomics.com/the-stanford-professor-who-fought-the-tax-lobby/ https://priceonomics.com/the-stanford-professor-who-fought-t...

twblalock 7y ago
We need a simpler tax code with fewer deductions before a simple tax form will make sense. Otherwise people will just get their simple tax form and pay TurboTax or someone else to squeeze every penny out of the deductions.
CivBase 7y ago
If the government can pre-fill my tax form, why should I even have to file taxes to begin with? Just send me the pre-filled information each year and tell me I need to correct it if it's wrong. Otherwise, I shouldn't have to do anything.
- ChainsawBaby 7y ago
  Basically how we do it in Norway, and probably lots of other countries that does it automagically. 1st of April every year we get our pre-filled tax form (digitally), which we have to look over. If we find it to be alright, we don't have to do anything (deadline the 30th of April) and the taxes have been filed. All financial institutions sends data to our tax office, so it's all there.

neolefty 7y ago

Wow I would love to hear the inside story on this one. I think we're all motivated by both survival and doing good, and I see an overall trend towards more doing good, as survival gets easier. Is this a case of that? Who drove it? What internal processes allowed public service to overcome corrupt lobbying pressure?

xtracto 7y ago

This USA tax thing has always baffled me... it is the exact definition of why we pay taxes: for the government to provide services that are common to the country´s citizens. There´s nothing more common than tax collection: rich, middle class or poor. Why wouldn't citizens demand a public tax filing process? Even in Mexico we have an automagical tax filing process that makes: a) The great majority of the population who perceives a salary not needing to file taxes. b) For the rest of the people, those who don't do anything fancy, just click one button in a portal to do the filing, and everything is calculated by the tax authority. c) For the small percentage that do more complex things (I'll say it is between 5% and 10% of the population) still can do it in the portal for free, or hire an accountant.

deleted 7y ago
[deleted]
skizm 7y ago
An actual argument I've heard from TurboTax shills is that tons of people underpay taxes now with the self report system, and having the government pre-fill forms for you to rubber stamp would effectively increase taxes on the working class.
- mehhh 7y ago
  Great, sounds like TurboTax will still be able to compete if the IRS gives people tax filings precalculated, as TurboTax can say "We can save you $XXX!"
  - fedorareis 7y ago
    I’m sure for a large percentage of Americans like myself the “$XXX” that they saved you is just the standard deduction. Maybe at some point in my life an itemized deduction will actually save me more money, but every time I have filed taxes TurboTax looks at my info and decides that the standard deduction is the best I’m going to get. So for some percentage of Americans TurboTax won’t be able to compete because they can’t save you more than the IRS already did with its deductions.

Waterluvian 7y ago

So in Canada I pay about $15 CAD to file for my household. It takes 20 mins and is submitted digitally. Is this the equivalent of the issue in the USA or is it more expensive or something? I get that free filing is kind of obvious as a right, but the online service really does give me $15 of value so I've never thought to be upset by it.

lykr0n 7y ago
Yeah. TubroTax is around $40 to file. CreditKarma offers their own version which is free. The controversy is that the IRS bound its own hands in saying it couldn't make its own filing software. I see no problems with private companies charging a Fee to provide a better service.
- everybodyknows 7y ago
  The Credit Karma blurb is here: https://www.creditkarma.com/tax https://www.creditkarma.com/tax But -- the hard bits are state-specific support, and the supplementals K-1, 6250, et al. Anyone have first-hand experience with CreditKarma tax filing? There's also TaxAct -- anyone tried it? https://www.taxact.com/ https://www.taxact.com/
  - klipt 7y ago
    I used TaxAct in the past but they're now almost as expensive as TurboTax. I now use https://www.freetaxusa.com https://www.freetaxusa.com - a little less hand holding than TurboTax, but if you know what you're doing it handles almost every situation and is, as advertised, free.
  - repsilat 7y ago
    > Anyone have first-hand experience with CreditKarma tax filing? I've used it for the last 3 years in California. Quite simple, free, supports backdoor Roths. Tax returns were quickly accepted and paid out into my bank account. Dunno about more complex use-cases (I don't own a home or a business, and I work in one state year-round), but definitely worth a look.

girishso 7y ago

TurboTax will be remembered as a classic example of extreme capitalism.

nojvek 7y ago
or extreme lobbying

mucholove 7y ago

One of the sad things behind the story: Bill Campbell was Chairman of the board at Inuit while this was going on. His story is inspiring. I’m a capitalist at heart. But I’m not a monopolist or a crony—and hope not to become one. The best among us aren’t perfect. We should take this as a cautionary tale.

everybodyknows 7y ago
The vexing question: Why does there seem to be no space in the market for an honest, quality vendor? As in Fastmail, Costco, or the pre-Amazon Whole Foods? Are there so few customers willing to pay a truthful, higher sticker price that such a business cannot be sustained?
- froindt 7y ago
  Freetaxusa was a very easy experience last year. Federal is free, state is $10. I haven't read their privacy policy. Perhaps a profile of me was sold to dozens of companies - but I think they fit your criteria pretty well.
chmaynard 7y ago
The mantra for Intuit, indeed for every for-profit company in the Valley, is to grow or die. Even a rockstar exec like Bill Campbell couldn't escape that imperative. Intuit decided they had to keep growing their market to survive and they chose to go after the huge majority of taxpayers who really didn't need their services. Once that decision was made, the logic of eliminating your competition followed as a matter of course, and the IRS itself was and still is their biggest potential competitor.

ars 7y ago

The article says the IRS will make its own free filing system. So how is there still a "deal" with tax software companies? Isn't the whole deal that the IRS would not make such software?

ChuckMcM 7y ago

From the article: The addendum also expressly bars the companies from “engaging in any practice” that would exclude their Free File offerings “from an organic internet search.” Note the term "organic" which suggests the page "naturally" ranks in the first few hits. The agreement doesn't seem to prevent Intuit and others from both buying ads to populate the top of search results and SEO'ing the crap out of it to make their stuff rank at the top "organically." I see this as a good example of how policy makers write policy with good intentions but without a fundamental understanding of how gamed Internet search is in order to make it profitable.

randallsquared 7y ago
> I see this as a good example of how policy makers write policy with good intentions but without a fundamental understanding [...] I agree with your argument in the general case, but in this case that seems like what they would want: not to exclude the possibility of advertising or SEO for the other products, but to rule out doing reverse SEO (or just robots.txt to exclude it from search engines) on the Free File pages.

wnevets 7y ago

I just want to move to a system where the IRS sends me a bill, they know how much I owe them.

hanniabu 7y ago
Yeah there's no reason that in 2019 we should even have to file. Everything should be automated for 85% of the population and they just receive the bill. Only a small percent would actually need to file due to certain circumstances mostly by people that are using special business structures to minimize taxes.
bcyn 7y ago
Assuming you're a traditional W2 worker, yes. But many people have other income sources such that the IRS doesn't know how much you owe until you report it.

alistairSH 7y ago

In the US, we've had decades of (largely GOP) messaging that the government can't do anything properly. A substantial portion of the population believes it. As noted in a sibling comment, the IRS could pre-fill forms that would be correct for the vast majority of tax payers (who take the standard deduction/don't itemize, have a single job, and no other edge cases). These people should not be paying TurboTax either way - the forms they need to submit are relatively straight-forward. People who do need a CPA would have to hire one regardless. TurboTax is literally just ripping off average tax payers.

komali2 7y ago
It's pretty disgusting. Summed up in one of my favorite tweets, which went something like > Gov: you owe us money. It's called taxes > Ctzn: oh ok, how much do I owe you? > Gov: you have to figure it out > Ctzn: oh well, then I owe you 0 > Gov: no, no, we know how much you owe, you have to figure it out, and by the way if you get it wrong you go to jail
- seanmcdirmid 7y ago
  You can have the irs figure out how much you owe if your income is simple enough. This is similar to a lot of countries just taxing you at your income sources and not requiring you to file a return. However, the American system has a lot of deductions, exemptions, status modifiers, etc... so you often need to pay less than that, hence the need for everyone to do tax returns.
- nightski 7y ago
  You don't go to jail for filing a wrong number accidentally. Only if you are intentionally lying/hiding income. I know people who didn't pay tax FOR THEIR BUSINESS for several years and they settled the debt for much less than they owed and definitely did not go to jail. This is just misinformation.
  - roddds 7y ago
    It's called hyperbole.

nvarsj 7y ago

Now if only I could file my expat taxes via some public service. The filing requirement in the Obama/Trump era for expats is literally insane, and I'd say even Kafkaesque in the truest sense. The way the government treats its expats w.r.t. tax is inhumane and makes me really dislike being an American.

seanmcdirmid 7y ago
How did filing requirements change since 2008? I didn’t notice any differences. Also, you can use online tax preparations now as they seem to support 2555 and 1116 forms now, which wasn’t an option in 2008.
- nvarsj 7y ago
  I believe 2008 saw the start of mass enforcement of FBAR/FACTA, stricter requirements on foreign banks to report American accounts, etc. Things got much worse with Trump and the Republican congress - with sections 962/965 (transition tax/GILTI tax), and 5471 complexity going through the roof. Anyone with a small business, or any sort of ownership stake, was hit hard by these terribly written laws and their onerous filing requirements. Being an American expat is a giant liability these days, which is sad, because I enjoy being American. Expats will unfortunately never have much of a voice, and I don't expect things to ever improve, only get worse.

dang 7y ago

75 days ago: https://news.ycombinator.com/item?id=21281411 https://news.ycombinator.com/item?id=21281411 6 months ago: https://news.ycombinator.com/item?id=20119916 https://news.ycombinator.com/item?id=20119916 8 months ago: https://news.ycombinator.com/item?id=19613725 https://news.ycombinator.com/item?id=19613725 9 months ago: https://news.ycombinator.com/item?id=19392673 https://news.ycombinator.com/item?id=19392673 2018: https://news.ycombinator.com/item?id=17751383 https://news.ycombinator.com/item?id=17751383 2017: https://news.ycombinator.com/item?id=13853150 https://news.ycombinator.com/item?id=13853150 2015: https://news.ycombinator.com/item?id=9381437 https://news.ycombinator.com/item?id=9381437 https://news.ycombinator.com/item?id=9380232 https://news.ycombinator.com/item?id=9380232 2014: https://news.ycombinator.com/item?id=7595440 https://news.ycombinator.com/item?id=7595440 2013: https://news.ycombinator.com/item?id=5443203 https://news.ycombinator.com/item?id=5443203 I'm sure there are others... The current submission passes the significant new information test, so we won't count it as a dupe. https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=by%3Adang%20%22significant%20new%20information%22&sort=byDate&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

SeanFerree 7y ago

Wow! Not good for TurboTax

jorblumesea 7y ago

The both parties argument is so stale at this point. While the Dems might not be perfect, they aren't actively sabotaging our democracy. The Republicans just passed a huge tax bill and what did it do? Oh, huge handouts to the wealthy. Nice!

briandear 7y ago
Sabotaging democracy? You mean like attempting to overturn a presidential election?
- juststop 7y ago
  Just stop. Just take this kind of absolute disregard for facts somewhere else.
- allemagne 7y ago
  It might not really need to be said, but this absurd line about "overturning an election" has absolutely no basis in reality. The U.S. constitution very clearly gives the legislative branch the power to impeach and remove any sitting president. Period. If you don't like it then call for an amendment or a new constitutional convention.
- jorblumesea 7y ago
  I mean, Gerrymandering, voter suppression... Hard to believe they're acting in any democratic fashion. Btw, impeachment is a well documented power of the legislative branch.
  - zchrykng 7y ago
    If you've paid attention to the history of gerrymandering, you would know that both sides do it when in power and complain about it when not.
    - ergothus 7y ago
      "Both have done it" is not the same as "both have done it equally". Nor does it mean "we should therefore be okay with it". If we support the idea of Democracy, we should stop abuses that harm democracy, even if it prevents abuses those we otherwise agree with have taken advantage of.

dartdartdart 7y ago

BEST NEWS OF THE DECADE

xrd 7y ago

It's so insane to me that Grover Norquist somehow lobbied against free tax filing provided by the IRS. It escapes all logic that he didn't pay attention to what other countries do. It escapes all logic that he didn't think for a moment about what the cost would be to citizens in (more or less direct payments to Intuit) and that's not considering the incalculable cost of just gathering up all this documentation and put it into TurboTax. Billions of dollars in lost man power? Billions of dollars in wealth transfers from middle and lower class people? Probably more like Trillions. Norquist didn't succeed in drowning the government in the bathtub. He DID successfully manage to keep the entire US citizenry drowning in billions of hours of wasted effort and billions of dollars of unnecessary expenditures. Good work, Norquist!

danieltillett 7y ago
It is not insane, just not obvious what Grover’s aim is. He is anti-tax for a large number of reasons. By making paying tax painful for the majority of people he is trying to increase the percentage of the population that hate the IRS and taxes. All very sane if your aim is to lower taxes.
- stonogo 7y ago
  Only if you don't care who you hurt on the way to your goal. We may have different definitions of sanity.
  - danieltillett 7y ago
    Now we are getting to the question if his aim is ethical or not. I think his obsession with reducing taxation at all costs is misguided and often counterproductive, but it is not insane.
- xrd 7y ago
  Ok, this makes me feel like maybe he had intention and thought behind this. I can honestly align with that thinking if he was doing it for this reason. It seems like the world only works with subterfuge, sadly. Is it impossible to be honest about what you want to do and move people in that direction, or is it only possible to motivate change by lying to people. I don't love Grover Norquist, but I thought it was interesting/open-minded of him to see Burning Man for himself. And, I align with the idea of reducing taxes. So, this makes me feel like he was not just a useful idiot if he actually did it for this reason. But, still, what a cost to bear. And, does the long term goal of reducing taxation by causing people to hate the IRS get him any closer to actually reducing taxes and/or getting rid of the IRS? Obviously, that did not happen.

EamonnMR 7y ago

In the constant stream of bad news, it's easy to miss a positive update like this.

gigatexal 7y ago

This is the best news to Start the new year!!!

m0zg 7y ago

Just fucking send me my filled out tax forms, like they do in other countries, you already know everything, and where you're wrong, I'll contest.

PaulDavisThe1st 7y ago
Doesn't work so well for the self-employed, alas.
- m0zg 7y ago
  Only if working with individuals. If I, as a consultant, work with a company, that company requires a W9 from me, and they have to report what they paid me. And I also report what I paid myself in salary and pay federal taxes from every paycheck I make out to myself. So at least for me, they know everything there is to know.
  - PaulDavisThe1st 7y ago
    I sell stuff (software, so not really stuff). I certainly file my quarterly estimated taxes (state and federal), but until I file my annual return, the government has no idea how much I've actually earned, nor what my expenses were. Consequently, they're in no position to tell me what I owe them until I've filed my entire return. Perhaps what the commenter meant was "we should fill out forms detailing income + expenses (where applicable) and the government should compute our taxes for us". I'm mostly good with that idea.
    - m0zg 7y ago
      Yes, this won't be 100%. But I'd say easily 99% of people could get all this tax bullshit automated away and they wouldn't have to pay Intuit a single penny.

kpennell 7y ago

propublica is a good one to donate to!

PaulDavisThe1st 7y ago

My pet peeve: I've used freefillableforms or whatever it is called for several years. It's the only (free, online) option (I think) for someone in my income bracket. It's not a bad system, but it is deliberately hobbled: it will do about 90% of the math for you, and about 90% of the "put this computed value on line N of some other form". But ... not the remaining 10%. And there will be no errors if you fail to do them (other than your return being incorrect). I don't know if it is better or worse to offer a deliberately crippled system.

gdy 7y ago

Here is an idea from Russia: flat 13% income tax with deductible educational, medical, real estate and some other expenses.

ourmandave 7y ago

I always use TurboTax online to complete my taxes and then copy all their info into freefillableforms.com to file for free.

danShumway 7y ago

Excellent news, and congrats to Propublica for in no small part making it happen. This wasn't just a shady operation -- Turbotax openly lied to customers about its free file program, it deliberately suppressed the program from search results, it lied to veterans. It was 100% acting in bad faith during negotiations with the IRS. Sometimes topics like this end up becoming kind of ideological or partisan; but in this case I feel like Intuit is just very objectively in the wrong, and that the IRS agreement for the free file program very objectively just was not working. I myself contacted Turbotax about their free edition and got personally lied to about the differences between the programs.[0] > In this call, I was told that the form availability between the Free File and Free edition were the same, and I wouldn't be eligible for either. To check this, I created a second account and added the same forms to the Free File program. I was never charged or told that I was ineligible. All of the forms were added successfully. [0]: https://www.youtube.com/watch?v=Piuv7KH37D4 https://www.youtube.com/watch?v=Piuv7KH37D4

cactus2093 7y ago
There's a good Planet Money episode that explains how surprisingly it is still a partisan issue. The Republican argument, at least from certain prominent people in the party, is that if paying taxes gets too easy the average American will be less likely to push their representatives to lower taxes or to oppose new taxes that get proposed.
- RandomTisk 7y ago
  Which 'prominent people'? It sounds like an incredibly silly argument, one I had never heard of before.
  - testis321 7y ago
    Honestly, knowing how much taxes you pay is important (and as i said in a comment above, problematic, if people don't know). But this can be solved by autofiling taxes, and then sending a yearly report: you earned X, paid Y taxes, out of those, Z goes to this, Q to that, W to that other thing, you've used these government services this year, that cost that much money, etc.

OrgNet 7y ago

The IRS already have all the information it needs to automatically file returns for many Americans... does that mean that some of us will just be able to confirm that our automatically generated return is correct?

fiatjaf 7y ago

Every part of this story is wrong.

mttjj 7y ago
Could you maybe expand on this a little bit? Otherwise, your comment just comes off as SPAM.

pascalxus 7y ago

And, don't forget, there's always CalFile. I've heard it's provided by the Gov for Free!! One of the posters here had mentioned it earlier in the year and I don't want to forget

monkeycantype 7y ago

This is at number two on the front page, I'm wondering how much this is driven by a specific interest in this story, or whether other people are having the same, probably childish emotional reaction that I am, an almost dumbfounded disbelief that a major institution is not charging headlong towards death cult dystopia. A public institution has acted seemingly for public good. Regardless of whether its driven as much by shame as by duty and altruism, - I'm deeply confused about how to think about this. Is this a trick? Sleight of hand to distract, to funnel the non wealthy towards a presentation of the tax code that obscures the existence of incantations to the elder gods known only to operating thetan level VIII accountants? Is this a bellwether of positive change, or a an eddy current in the river Styx? Is this just normal institutional behavior? Is Ragnarök 2020 just a delusional end-of-days narrative I've bought into? I can't believe we've made it this far - Y2k didn't kick off, I was sure at least Agile would be dead by now, am I 'dude you\'re overthinking this'? Am I in a distributed doomsday cult? oh, also - happy new year.

CivBase 7y ago
Politicians aren't evil, just self-interested like most people. It just so happens that the nature of their job sometimes means serving others' interests is in their own best interest. Sometimes. Happy new year.

smadge 7y ago

Great. I hope the IRS is serious about this and finally makes the tax software industry obsolete.

macinjosh 7y ago

Now we're just left with this illogical part of the tax system: The State: Pay me taxes or I'll put you in a cage! Citizen: OK, how much do you need? The State: You tell me, but if you're wrong you'll regret it!

CivBase 7y ago
Exactly. This made sense decades ago when it would have been extremely costly to keep track of all the data necessary to calculate taxes. I don't want the government to make a free solution to help me file taxes. I want the government to make a solution that prevents me from having to file taxes in the first place!
onion2k 7y ago
This change means the state will stop saying "you tell me" and start telling people.
- CivBase 7y ago
  Do you have a source for this? I can't find any mention of it in the linked article.
jpmoral 7y ago
In Australia you do your taxes and then a few weeks later you either get a refund or a bill. If there's anything that doesn't add up in your filing they may ask you about it. Nothing to regret unless you knowingly filed incorrect information. Edit: a lot of it is pre-filled (payroll, bank interest, investment distributions in my case), you just need to check against your own records.
dmoy 7y ago
If you mess up your taxes, the IRS actually has a very reasonable process for making amends, with penalties that aren't egregious at all. It's mostly a small interest (like a couple percent above prime or something), which caps at 25% of the unpaid amount. In fact it's the same interest they pay you if you were due refund and they were slow giving it back. My main complaint is that it's a super, super slow process. They'll follow up years later, and each back and forth takes like three months.

darthreid 7y ago

wow, this is great towards fixing the US tax system and the byzantine means most Americans have to go thru to simply file taxes

zacharycohn 7y ago

Good riddance.

Trias11 7y ago

What kind of bribe and to whom does private corporation need to make to make IRS sign non compete agreement with them?

jdorfman 7y ago

I just donated to ProPublica. Amazing work.

cable2600 7y ago

Turbo Tax only works with Windows 10 and 8.1 with the 2019 version. Shutting out Windows 7 and under filers who can use the IRS free file system.

msolujic 7y ago

This is great news. NPR Planet money podcast cover this topic in detail past 2 years [1] https://www.npr.org/sections/money/2019/04/03/709656642/episode-760-tax-hero https://www.npr.org/sections/money/2019/04/03/709656642/epis...

dbuder 7y ago

I thought this would take decades more to break free from, and during this administration, colour me surprised.

thinkegictalk 7y ago

http://bit.ly/2M25Xvz http://bit.ly/2M25Xvz Obesity has become an epidemic in America. Men and Women gain pounds of weight in no time. They find it way harder to lose weight. The weight loss industry, like the gym, fitness centers, dieticians, and hypnosis programs are fooling their victims

schredder 7y ago

This probably explains the TurboTax ad I saw on YouTube today where the only word spoken was “free,” over and over again.

edisonjoao 7y ago

no ones' ever happy