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Would this even matter if the tax-prep industry hadn't successfully lobbied against a free government-prepared return system? https://www.propublica.org/articl

Would this even matter if the tax-prep industry hadn't successfully lobbied against a free government-prepared return system? https://www.propublica.org/article/filing-taxes-could-be-free-simple-hr-block-intuit-lobbying-against-it https://www.propublica.org/article/filing-taxes-could-be-fre...

toomuchtodo 6y ago
Progress is happening. Note that ProPublic's reporting you link to was the genesis of the IRS' below decision to end their agreement to not compete against Turbotax. Progress, of course, should be moving faster to deprecate the need for third party tax preparation tools (as is the case in most other developed nations). Call your representative(s), tell them this policy matters to you. Each letter, email, and phone call is counted. Part of Intuit's $80 billion market cap depends on taxes continuing to be hard to file directly with the IRS. https://www.propublica.org/article/irs-reforms-free-file-program-drops-agreement-not-to-compete-with-turbotax https://www.propublica.org/article/irs-reforms-free-file-pro... (IRS Reforms Free File Program, Drops Agreement Not to Compete With TurboTax)
- branweb 6y ago
  That's encouraging!
- keenmaster 6y ago
  I thought that the Patriot Act episode on “why doing taxes is so hard” was a great summary on this subject. https://www.netflix.com/title/80239931?s=i&trkid=13747225 https://www.netflix.com/title/80239931?s=i&trkid=13747225
bilekas 6y ago
Imagine how badly a Govmnt run system would be though. Tax rules change almost weekly sometimes more for states, this requires fast acting changes to the workflow engine, coordniation with IRS etc. I wouldn't want government anywhere near that. Especially when the government can shut down whenever theres a dispute. No thanks
- branweb 6y ago
  Maybe so but to me it seems achievable. Lot's of other countries have such a system. Why would it be so much harder to achieve here? Also it seems to me we don't have much to lose. Our choices were: pay intuit or give our personal information to creditkarma to do god knows what with. Now we don't even have that.
  - sumtechguy 6y ago
    Not only is it achievable. If I get it wrong they send it back. That means there is an automated audit system. That means we are arguing about who gets to own the front end form. There is no incentive for either side to make it simpler because it is all 'code' at this point. With a nice wizard in front of it. The interchange format is the 1040 form. They even have a special 1040 form for computers!
    - bilekas 6y ago
      the 1040 is only the federal..
  - Larrikin 6y ago
    Outside of personal protection (financial and physical), one of the two largest political parties in the US actively tries to make government run programs operate as badly as possible so they can get rid of them in favor of private entities and get a tax break.
- kgermino 6y ago
  > Tax rules change almost weekly sometimes more for states, this requires fast acting changes to the workflow engine, coordniation with IRS etc. But, the tax rules are changed _by the government_. I'm no saying I think the government built program will be the best one out there, but nobody is saying it needs to be the only option - just that the IRS should be allowed to help it's constituents.
  - bilekas 6y ago
awinder 6y ago
Im starting to wonder if it’s going to be eventually cheaper for Intuit themselves if they hadn’t have been successful. It’s gonna be really expensive to buy every financial tracking startup when all you need to do for a liquidity event is pump out a free irs form-filler.
slg 6y ago
I am amazed how often people blame this on the tax prep industry and not the government itself. Of course the tax prep industry would lobby against legislation that would absolutely obliterate their industry. Every other industry would do or is currently doing the exact same thing. Pushing against a change that would put hundreds of thousands out of work seems like one of the few good uses of lobbying. However it is the government officials who should see past the one group who is hugely invested in the status quo to decide what is best for the future of the people of this country. EDIT: This has received multiple downvotes and I'm surprised this was a controversial opinion. Do people genuinely think that industries in a capitalist society won't act in their own self interest regardless of the negative repercussions to society as a whole?
- Nitrolo 6y ago
  Acting in your self-interest does not excuse you from the consequences of your actions. That is not a justification one would accept from individuals and neither should it be acceptable for companies. It may technically be legal (which I would argue is something that should be changed) but that does not mean that it is automatically good. Yes, TurboTax will make more money thanks to their incredibly effective lobbying efforts, but the price is that all Americans have a somewhat worse experience filing their taxes each year. This compounds over hundreds of millions of taxpayers and most importantly, is completely unnecessary. If I managed to somehow convince the government to pass a law that everyone has to pay me 1$ every year, that would clearly be in my economic interest, but nobody would argue that that would be a good thing. Lastly I highly doubt that TurboTax is employing hundreds of thousands of people.
  - slg 6y ago
    >Acting in your self-interest does not excuse you from the consequences of your actions. That is not a justification one would accept from individuals and neither should it be acceptable for companies. It may technically be legal (which I would argue is something that should be changed) but that does not mean that it is automatically good. The point of my post isn't to excuse the lobbying. It is to blame the lobbying on the people who could actually curtail it as well as recognizing that almost everyone would do the exact same thing that the tax prep industry is doing given their situation. >Yes, TurboTax will make more money thanks to their incredibly effective lobbying efforts, but the price is that all Americans have a somewhat worse experience filing their taxes each year. This compounds over hundreds of millions of taxpayers and most importantly, is completely unnecessary. Almost every law is going to make someone worse off in some way. I don't think it is reasonable to expect that every lobbying organization needs to weigh every possible outcome. Even if they did, they are inherently biased. Judging the ultimate outcomes is the job of the politicians being lobbied. >Lastly I highly doubt that TurboTax is employing hundreds of thousands of people. I was speaking about the industry as a whole and not specifically TurboTax. H&R Block itself balloons up to over 90k employees during tax prep season. [1] You can maybe nitpick depending on what exact definition you use for "job", but there is little double that hundreds of thousands of people are employed in the tax prep industry over the course of the year. [1] - https://en.wikipedia.org/wiki/H%26R_Block#Corporate_affairs https://en.wikipedia.org/wiki/H%26R_Block#Corporate_affairs

toomuchtodo 6y ago

Progress is happening. Note that ProPublic's reporting you link to was the genesis of the IRS' below decision to end their agreement to not compete against Turbotax. Progress, of course, should be moving faster to deprecate the need for third party tax preparation tools (as is the case in most other developed nations). Call your representative(s), tell them this policy matters to you. Each letter, email, and phone call is counted. Part of Intuit's $80 billion market cap depends on taxes continuing to be hard to file directly with the IRS. https://www.propublica.org/article/irs-reforms-free-file-program-drops-agreement-not-to-compete-with-turbotax https://www.propublica.org/article/irs-reforms-free-file-pro... (IRS Reforms Free File Program, Drops Agreement Not to Compete With TurboTax)

branweb 6y ago
That's encouraging!
keenmaster 6y ago
I thought that the Patriot Act episode on “why doing taxes is so hard” was a great summary on this subject. https://www.netflix.com/title/80239931?s=i&trkid=13747225 https://www.netflix.com/title/80239931?s=i&trkid=13747225

bilekas 6y ago

Imagine how badly a Govmnt run system would be though. Tax rules change almost weekly sometimes more for states, this requires fast acting changes to the workflow engine, coordniation with IRS etc. I wouldn't want government anywhere near that. Especially when the government can shut down whenever theres a dispute. No thanks

branweb 6y ago
Maybe so but to me it seems achievable. Lot's of other countries have such a system. Why would it be so much harder to achieve here? Also it seems to me we don't have much to lose. Our choices were: pay intuit or give our personal information to creditkarma to do god knows what with. Now we don't even have that.
- sumtechguy 6y ago
  Not only is it achievable. If I get it wrong they send it back. That means there is an automated audit system. That means we are arguing about who gets to own the front end form. There is no incentive for either side to make it simpler because it is all 'code' at this point. With a nice wizard in front of it. The interchange format is the 1040 form. They even have a special 1040 form for computers!
  - bilekas 6y ago
    the 1040 is only the federal..
- Larrikin 6y ago
  Outside of personal protection (financial and physical), one of the two largest political parties in the US actively tries to make government run programs operate as badly as possible so they can get rid of them in favor of private entities and get a tax break.
kgermino 6y ago
> Tax rules change almost weekly sometimes more for states, this requires fast acting changes to the workflow engine, coordniation with IRS etc. But, the tax rules are changed _by the government_. I'm no saying I think the government built program will be the best one out there, but nobody is saying it needs to be the only option - just that the IRS should be allowed to help it's constituents.
- bilekas 6y ago

awinder 6y ago

Im starting to wonder if it’s going to be eventually cheaper for Intuit themselves if they hadn’t have been successful. It’s gonna be really expensive to buy every financial tracking startup when all you need to do for a liquidity event is pump out a free irs form-filler.

slg 6y ago

I am amazed how often people blame this on the tax prep industry and not the government itself. Of course the tax prep industry would lobby against legislation that would absolutely obliterate their industry. Every other industry would do or is currently doing the exact same thing. Pushing against a change that would put hundreds of thousands out of work seems like one of the few good uses of lobbying. However it is the government officials who should see past the one group who is hugely invested in the status quo to decide what is best for the future of the people of this country. EDIT: This has received multiple downvotes and I'm surprised this was a controversial opinion. Do people genuinely think that industries in a capitalist society won't act in their own self interest regardless of the negative repercussions to society as a whole?

Nitrolo 6y ago
Acting in your self-interest does not excuse you from the consequences of your actions. That is not a justification one would accept from individuals and neither should it be acceptable for companies. It may technically be legal (which I would argue is something that should be changed) but that does not mean that it is automatically good. Yes, TurboTax will make more money thanks to their incredibly effective lobbying efforts, but the price is that all Americans have a somewhat worse experience filing their taxes each year. This compounds over hundreds of millions of taxpayers and most importantly, is completely unnecessary. If I managed to somehow convince the government to pass a law that everyone has to pay me 1$ every year, that would clearly be in my economic interest, but nobody would argue that that would be a good thing. Lastly I highly doubt that TurboTax is employing hundreds of thousands of people.
- slg 6y ago
  >Acting in your self-interest does not excuse you from the consequences of your actions. That is not a justification one would accept from individuals and neither should it be acceptable for companies. It may technically be legal (which I would argue is something that should be changed) but that does not mean that it is automatically good. The point of my post isn't to excuse the lobbying. It is to blame the lobbying on the people who could actually curtail it as well as recognizing that almost everyone would do the exact same thing that the tax prep industry is doing given their situation. >Yes, TurboTax will make more money thanks to their incredibly effective lobbying efforts, but the price is that all Americans have a somewhat worse experience filing their taxes each year. This compounds over hundreds of millions of taxpayers and most importantly, is completely unnecessary. Almost every law is going to make someone worse off in some way. I don't think it is reasonable to expect that every lobbying organization needs to weigh every possible outcome. Even if they did, they are inherently biased. Judging the ultimate outcomes is the job of the politicians being lobbied. >Lastly I highly doubt that TurboTax is employing hundreds of thousands of people. I was speaking about the industry as a whole and not specifically TurboTax. H&R Block itself balloons up to over 90k employees during tax prep season. [1] You can maybe nitpick depending on what exact definition you use for "job", but there is little double that hundreds of thousands of people are employed in the tax prep industry over the course of the year. [1] - https://en.wikipedia.org/wiki/H%26R_Block#Corporate_affairs https://en.wikipedia.org/wiki/H%26R_Block#Corporate_affairs