4 ms·

It's a racket. Government already knows how much you owe them. So how about US government, like most modern countries, send you a form which says: "we think you

by trymas 6y ago

It's a racket. Government already knows how much you owe them. So how about US government, like most modern countries, send you a form which says: "we think you owe us xxx$ (because of this and that), if not - provide extra information"?

lolsal 6y ago
> It's a racket. Yea, possibly (I agree with you). It is as much a racket as lots of other things. Doesn't excuse it being a racket, but TurboTax is not an anomaly. > Government already knows how much you owe them. This is false. If you aren't taking advantage of deductions, sophisticated tax-deferred vehicles for retirement or tax-advantaged accounts for other investments, you're giving the IRS more than you have to. If that doesn't bother you, that's fine too! > So how about US government, like most modern countries, send you a form which says: "we think you owe us xxx$ (because of this and that), if not - provide extra information"? Cool, sounds great. However, you're over-simplifying things and ignoring the complicated parts. For a lot of people, a simple approach like the above would be totally adequate and I personally completely support a system like that.
- matz1 6y ago
  Then how do IRS know that the duduction is correct?
  - goatcode 6y ago
    They probably don't, but when something looks suspicious enough, in comes the audit.
  - astura 6y ago
    The companies that you have these accounts with, and your employer have reporting requirements.
    - deleted 6y ago
      [deleted]
  - PeterisP 6y ago
    They don't. They request some documentation, verify some facts that they can correlate other sources, but mostly they rely on the fact that intentionally lying in the declarations is a crime - they can trust most reports, audit some, and penalize those violators they caught as a deterrent to make it not worth the risk to lie.
- trymas 6y ago
  > If you aren't taking advantage of deductions, sophisticated tax-deferred vehicles for retirement or tax-advantaged accounts for other investment, you're giving the IRS more than you have to. I do take advantage and do not lift a finger to achieve it, because the tax man knows about this already. > However, you're over-simplifying things and ignoring the complicated parts. IMHO, you are overcomplicating things. If tax laws are as complex as you wish them to be, if the tax-man cannot know what you owe to it - then it's just a very good environment for the wealthy not to pay anything, while screwing over other 99% with over complicating things. I do not pay taxes in the US and unless you have a company, I guess 99% of individuals do not need to do any taxes at all, i.e. just confirm what the tax agency already knows about them.
  - lolsal 6y ago
    > I do take advantage and do not lift a finger to achieve it, because the tax man knows about this already. I think you're mistaken. The tax man does not already know what charitable donations I've made, or depreciation I would like to claim, or .... > IMHO, you are overcomplicating things. If tax laws are as complex as you wish them to be, if the tax-man cannot know what you owe to it - then it's just a very good environment for the wealthy not to pay anything, while screwing over other 99% with over complicating things. As an aside, I do not have any wishes regarding the tax system one way or the other. I'm only subject to the tax laws, I don't really care what they are. The Tax Man® knows what you owe based on income that has been reported to it by places like your job, but only if your work does withholding and reports it to the IRS. It could report it without withholding (I think?), or you could be getting a 1099. If all the income from your 1099s is reported accurately and timely, this would be similar to a place that gives you a W2. This doesn't always happen, or there could be disputes. > I do not pay taxes in the US and unless you have a company, I guess 99% of individuals do not need to do any taxes at all, i.e. just confirm what the tax agency already knows about them. I doubt it's anywhere close to 99% :) Optional things that the government might not know about: kids, charities, investments, depreciation, rebate programs (like solar, cash for clunkers, etc), inheritance, mileage deductions, moving across state lines, getting divorced, getting married, becoming a widow, losing a child, etc. There's a ton of stuff that the government doesn't know about _unless you tell it_. If I make a bunch of money mowing lawns, my neighbors probably aren't sending me 1099s, but I really probably should report that income and pay taxes on it. The government wouldn't know about it unless I reported it (which is why a lot of folks don't bother reporting income like that, especially if it's a small enough amount). I'm not a tax lawyer, nor a tax expert.
- systemvoltage 6y ago
  Agreed, it sounds insane but I much prefer US system. It is easy to say "simpler == better". I'd much prefer the gov not do things for me and leave the control over my taxes by default. I understand people in other countries can do the same, but the default is big gov giving you a number upfront. Think about taxes as a negotiation process.
  - CRConrad 6y ago
    This haggling, suspicious, negative, even hostile mindset towards your own government is a big reason why the US is so generally fucked up. "Negotiation process"?!? That's how shirkers and tax criminals think about it.
OwlsParlay 6y ago
The US tax system is another one of those things about the US that looks utterly baffling to an outside observer from Europe. How on earth did it get into this state? How is this 'free'?
- deleted 6y ago
  [deleted]
- lolsal 6y ago
  It is utterly bonkers; I wish it was different. That being said, it seems "freer" to me to tell the IRS what my financial situation is rather than let it dictate to me what I owe, and then have to fight the government in order to take a deduction for donating to GoodWill or the Salvation Army. I'm splitting hairs trying to play devil's advocate here.
  - CRConrad 6y ago
    Getting a deduction for that also seems bonkers. It's your money, you can do what you want with it, so sure, give it away to charity if you want — but WTF does that have to do with taxes? You pay taxes on your income, and then you can give away some of what's left; it's not the IRS that wants you to give it away, so why should their cut be affected by that? I'm pretty sure the US is alone in this weirdness too, as in so many others.
  - pfranz 6y ago
    That's very similar to what's described in other countries. The government provides you with prefilled forms. In the basic scenario you sign and return. In a more complex scenario you amend it, sign it and return. As a bonus, they could make it software and offer a way to file/check online--but I'd be happy if they at least did it via the mail with paper.
- pfranz 6y ago
  In the early 2000s the US noticed most other countries started having an e-file option. President Bush thought the best way to "catch up" was to have a public/private partnership and created a system where "blessed" companies could e-file with the government. They must offer a free version for low-income people and the government couldn't offer a competing product.
koboll 6y ago
Seems like a really easy first step would be for Democrats to pass a bill allocating money for the IRS to build a What You Owe API that banks and companies can access. Then every bank on the planet can implement a "Click to pay your taxes" button. Attack the problem at the source.
- revscat 6y ago
  Someone would filibuster it. There’s really no hope.
  - lolsal 6y ago
    You could give up or you could try. Seems like you've already made your choice.
- pfranz 6y ago
  As part of the public/private partnership that started e-filing in the early 2000s, one stipulation is that the government couldn't compete. There was a lot of noise made last year when a law almost made that permanent. I'm not sure if the API you're talking about would apply, but I'm pretty sure it would and passing a law would be difficult. https://www.propublica.org/article/congress-is-about-to-ban-the-government-from-offering-free-online-tax-filing-thank-turbotax https://www.propublica.org/article/congress-is-about-to-ban-...
arduinomancer 6y ago
> Government already knows how much you owe them. I don’t get why people think this is true. Take a really simple example of donating to a charity. How would the government know you donated without you telling them? How is the government going to know exactly where you put all your money?
- dataexporter 6y ago
  In an ideal scenario, the charity would be reporting your donations to the IRS. That way IRS has the information. If you put your money in a bank, the bank reports it to the IRS. That's how it works everywhere.

by trymas 6y ago

lolsal 6y ago

> It's a racket. Yea, possibly (I agree with you). It is as much a racket as lots of other things. Doesn't excuse it being a racket, but TurboTax is not an anomaly. > Government already knows how much you owe them. This is false. If you aren't taking advantage of deductions, sophisticated tax-deferred vehicles for retirement or tax-advantaged accounts for other investments, you're giving the IRS more than you have to. If that doesn't bother you, that's fine too! > So how about US government, like most modern countries, send you a form which says: "we think you owe us xxx$ (because of this and that), if not - provide extra information"? Cool, sounds great. However, you're over-simplifying things and ignoring the complicated parts. For a lot of people, a simple approach like the above would be totally adequate and I personally completely support a system like that.

matz1 6y ago
Then how do IRS know that the duduction is correct?
- goatcode 6y ago
  They probably don't, but when something looks suspicious enough, in comes the audit.
- astura 6y ago
  The companies that you have these accounts with, and your employer have reporting requirements.
  - deleted 6y ago
    [deleted]
- PeterisP 6y ago
  They don't. They request some documentation, verify some facts that they can correlate other sources, but mostly they rely on the fact that intentionally lying in the declarations is a crime - they can trust most reports, audit some, and penalize those violators they caught as a deterrent to make it not worth the risk to lie.
trymas 6y ago
> If you aren't taking advantage of deductions, sophisticated tax-deferred vehicles for retirement or tax-advantaged accounts for other investment, you're giving the IRS more than you have to. I do take advantage and do not lift a finger to achieve it, because the tax man knows about this already. > However, you're over-simplifying things and ignoring the complicated parts. IMHO, you are overcomplicating things. If tax laws are as complex as you wish them to be, if the tax-man cannot know what you owe to it - then it's just a very good environment for the wealthy not to pay anything, while screwing over other 99% with over complicating things. I do not pay taxes in the US and unless you have a company, I guess 99% of individuals do not need to do any taxes at all, i.e. just confirm what the tax agency already knows about them.
- lolsal 6y ago
  > I do take advantage and do not lift a finger to achieve it, because the tax man knows about this already. I think you're mistaken. The tax man does not already know what charitable donations I've made, or depreciation I would like to claim, or .... > IMHO, you are overcomplicating things. If tax laws are as complex as you wish them to be, if the tax-man cannot know what you owe to it - then it's just a very good environment for the wealthy not to pay anything, while screwing over other 99% with over complicating things. As an aside, I do not have any wishes regarding the tax system one way or the other. I'm only subject to the tax laws, I don't really care what they are. The Tax Man® knows what you owe based on income that has been reported to it by places like your job, but only if your work does withholding and reports it to the IRS. It could report it without withholding (I think?), or you could be getting a 1099. If all the income from your 1099s is reported accurately and timely, this would be similar to a place that gives you a W2. This doesn't always happen, or there could be disputes. > I do not pay taxes in the US and unless you have a company, I guess 99% of individuals do not need to do any taxes at all, i.e. just confirm what the tax agency already knows about them. I doubt it's anywhere close to 99% :) Optional things that the government might not know about: kids, charities, investments, depreciation, rebate programs (like solar, cash for clunkers, etc), inheritance, mileage deductions, moving across state lines, getting divorced, getting married, becoming a widow, losing a child, etc. There's a ton of stuff that the government doesn't know about _unless you tell it_. If I make a bunch of money mowing lawns, my neighbors probably aren't sending me 1099s, but I really probably should report that income and pay taxes on it. The government wouldn't know about it unless I reported it (which is why a lot of folks don't bother reporting income like that, especially if it's a small enough amount). I'm not a tax lawyer, nor a tax expert.
systemvoltage 6y ago
Agreed, it sounds insane but I much prefer US system. It is easy to say "simpler == better". I'd much prefer the gov not do things for me and leave the control over my taxes by default. I understand people in other countries can do the same, but the default is big gov giving you a number upfront. Think about taxes as a negotiation process.
- CRConrad 6y ago
  This haggling, suspicious, negative, even hostile mindset towards your own government is a big reason why the US is so generally fucked up. "Negotiation process"?!? That's how shirkers and tax criminals think about it.

OwlsParlay 6y ago

The US tax system is another one of those things about the US that looks utterly baffling to an outside observer from Europe. How on earth did it get into this state? How is this 'free'?

deleted 6y ago
[deleted]
lolsal 6y ago
It is utterly bonkers; I wish it was different. That being said, it seems "freer" to me to tell the IRS what my financial situation is rather than let it dictate to me what I owe, and then have to fight the government in order to take a deduction for donating to GoodWill or the Salvation Army. I'm splitting hairs trying to play devil's advocate here.
- CRConrad 6y ago
  Getting a deduction for that also seems bonkers. It's your money, you can do what you want with it, so sure, give it away to charity if you want — but WTF does that have to do with taxes? You pay taxes on your income, and then you can give away some of what's left; it's not the IRS that wants you to give it away, so why should their cut be affected by that? I'm pretty sure the US is alone in this weirdness too, as in so many others.
- pfranz 6y ago
  That's very similar to what's described in other countries. The government provides you with prefilled forms. In the basic scenario you sign and return. In a more complex scenario you amend it, sign it and return. As a bonus, they could make it software and offer a way to file/check online--but I'd be happy if they at least did it via the mail with paper.
pfranz 6y ago
In the early 2000s the US noticed most other countries started having an e-file option. President Bush thought the best way to "catch up" was to have a public/private partnership and created a system where "blessed" companies could e-file with the government. They must offer a free version for low-income people and the government couldn't offer a competing product.

koboll 6y ago

Seems like a really easy first step would be for Democrats to pass a bill allocating money for the IRS to build a What You Owe API that banks and companies can access. Then every bank on the planet can implement a "Click to pay your taxes" button. Attack the problem at the source.

revscat 6y ago
Someone would filibuster it. There’s really no hope.
- lolsal 6y ago
  You could give up or you could try. Seems like you've already made your choice.
pfranz 6y ago
As part of the public/private partnership that started e-filing in the early 2000s, one stipulation is that the government couldn't compete. There was a lot of noise made last year when a law almost made that permanent. I'm not sure if the API you're talking about would apply, but I'm pretty sure it would and passing a law would be difficult. https://www.propublica.org/article/congress-is-about-to-ban-the-government-from-offering-free-online-tax-filing-thank-turbotax https://www.propublica.org/article/congress-is-about-to-ban-...

arduinomancer 6y ago

> Government already knows how much you owe them. I don’t get why people think this is true. Take a really simple example of donating to a charity. How would the government know you donated without you telling them? How is the government going to know exactly where you put all your money?

dataexporter 6y ago
In an ideal scenario, the charity would be reporting your donations to the IRS. That way IRS has the information. If you put your money in a bank, the bank reports it to the IRS. That's how it works everywhere.