4 ms·

In my opinion, a substantial number of taxpayers would not be in favor of that, they like our current system of "voluntary compliance" because it allows even th

In my opinion, a substantial number of taxpayers would not be in favor of that, they like our current system of "voluntary compliance" because it allows even the little guys the opportunity to fudge a little without getting caught. Fortunately, most do not take advantage of that opportunity, but the "tax gap" (legitimately owed but unreported and uncollected taxes) is quite large. More importantly, automating the keypunching of a few standard forms such as W-2, 1099-R, 1099-INT/DIV/B, etc would only cover a small portion of the "time and effort" to prepare most tax returns. The IRS does not know what your filing status is (married filing joint or separate, single, head of household), who is a dependent of whom (there are two main flavors of dependency to determine), whether and how much you made or lost running a business or being a landlord, your medical expenses, charitable donations, real property taxes, your total gambling wins/losses, the list goes on. Even things that are reported, such as contributions to your IRA, don't get reported to the IRS until well past the original filing deadline. Because of all these things, there is no way the IRS could give you a "preliminary tax report", they can only import a limited set of data for you. California does actually have something like what you are asking for, CalFile (formerly ReadyReturn), but originally it was limited to "single, no-dependents, standard-deduction, only-wage-income, one-employer, with a maximum adjusted gross income of $139,917. The purpose of ReadyReturn was to make it easier for taxpayers to file their returns, and to make the filing process more accurate and faster."[1] [1]https://en.wikipedia.org/wiki/CalFile https://en.wikipedia.org/wiki/CalFile

toomuchtodo 5y ago
If other country revenue systems can do this, why do you feel the US tax filing landscape is so different? As gamblor956 mentions in other comments, this is not a technical or practical limitation, but regulatory capture via statute. https://blogs.worldbank.org/developmenttalk/how-are-countries-making-it-easier-pay-taxes https://blogs.worldbank.org/developmenttalk/how-are-countrie... https://www.taxpolicycenter.org/briefing-book/what-other-countries-use-return-free-filing https://www.taxpolicycenter.org/briefing-book/what-other-cou... > Denmark and Sweden, both small countries, operate tax agency reconciliation systems. About 87 percent of Denmark’s taxpayers and 74 percent of Sweden’s had their returns filled out by the tax authorities in 1999. Spain, Estonia, Finland, Norway, and Iceland have also implemented tax agency reconciliation systems. CalFile was purposely kneecapped in a fight with Intuit. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1668912 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1668912 | https://escholarship.org/content/qt1tw989zv/qt1tw989zv_noSplash_0a26275e80a11b2633dcc5eaa38721db.pdf https://escholarship.org/content/qt1tw989zv/qt1tw989zv_noSpl... > Under the auspices of the Free File Alliance (FFA), Intuit, manufacturer of TurboTax, has been attacking state-run, free e-filing services for several years. The latest victim, Virginia’s successful iFile program, succumbed late last year. Through it all, the unquestioned crown jewels of state e-filing programs – California’s CalFile and ReadyReturn – have managed to survive. But this year, Intuit has ratcheted up its annual campaign to end the two programs. In the process, it is peddling some familiar falsehoods as well as some newly crafted misrepresentations. > This article describes Intuit’s nine lies, the false arguments about ReadyReturn and CalFile that Intuit and its lobbyists have been telling elected officials, staffers, and nonprofit organizations serving California’s low-income communities. It also evaluates Intuit’s proposed Free File alternative to the state’s existing programs. For all of Intuit’s assertions – whether regarding the purported shortcomings of the state programs or the purported benefits of the Free File initiative – the article offers a point-by-point refutation.
- tragictrash 5y ago
  I think it's more about the politics involved. You basically answered the question with the last quote in your response. It's all intuit, the enormous silent power they can weild through lobbying, and the disproportionately smaller power the tax payers have. It's fucked up, and there's no end in sight. Those senators love their money and power more than the people they purport to serve.
- eatsyourtacos 5y ago
  >If other country revenue systems can do this, why do you feel the US tax filing landscape is so different? Because we have 50 states that do everything differently? As other people said, the federal government doesn't even seem to know basic info like if you are married, how many dependent you have, etc etc. If we didn't have any states (or all states used like the same systems that could easily talk to each other) and everything was federal, then yeah it would probably be a piece of cake because all the info is already there. But, we don't.. everything is done differently everywhere, and that affects the taxes.
  - CogitoCogito 5y ago
    The American political system isn’t uniquely more complicated than others; it simply doesn’t want to solve the problem. Lobbying by parasitical entities such as Intuit is the true reason. We could solve these problems if we chose to. We don’t.
  - selbyk 5y ago
    Federal and State taxes are two completely separate things. Why can't they just send the federal tax bill and let states do what they want?
undersuit 5y ago
What if we just eliminated the I get a W-2, I enter the info that the IRS already knows into a 3rd party system, the IRS accepts it. We'll never make taxes easier for everyone, and this "tax gap" argument is great and all but I don't know why I have to do anything for my exceedingly simple taxes.
- lurquer 5y ago
  Your W-2 does not come from the IRS, though. It is created by your employer. The form is simply informing you what it reported to the IRS. The W-2 your employer created and sent could be wrong. It’s a screwed up system.
  - undersuit 5y ago
    >The form is simply informing you what it reported to the IRS. So why do I submit it too? >The W-2 your employer created and sent could be wrong. Not a simple tax situation, I should be able to check my tax status of course so I can figure out when my simple taxes are borked by someone especially if it isn't in my favor.
  - smileysteve 5y ago
    Three w-2 your employer created could be wrong, but it was reported to the IRS. Correcting it on a 1040 leads to an eventual audit, as opposed to you need to correct what was reported.

toomuchtodo 5y ago

If other country revenue systems can do this, why do you feel the US tax filing landscape is so different? As gamblor956 mentions in other comments, this is not a technical or practical limitation, but regulatory capture via statute. https://blogs.worldbank.org/developmenttalk/how-are-countries-making-it-easier-pay-taxes https://blogs.worldbank.org/developmenttalk/how-are-countrie... https://www.taxpolicycenter.org/briefing-book/what-other-countries-use-return-free-filing https://www.taxpolicycenter.org/briefing-book/what-other-cou... > Denmark and Sweden, both small countries, operate tax agency reconciliation systems. About 87 percent of Denmark’s taxpayers and 74 percent of Sweden’s had their returns filled out by the tax authorities in 1999. Spain, Estonia, Finland, Norway, and Iceland have also implemented tax agency reconciliation systems. CalFile was purposely kneecapped in a fight with Intuit. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1668912 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1668912 | https://escholarship.org/content/qt1tw989zv/qt1tw989zv_noSplash_0a26275e80a11b2633dcc5eaa38721db.pdf https://escholarship.org/content/qt1tw989zv/qt1tw989zv_noSpl... > Under the auspices of the Free File Alliance (FFA), Intuit, manufacturer of TurboTax, has been attacking state-run, free e-filing services for several years. The latest victim, Virginia’s successful iFile program, succumbed late last year. Through it all, the unquestioned crown jewels of state e-filing programs – California’s CalFile and ReadyReturn – have managed to survive. But this year, Intuit has ratcheted up its annual campaign to end the two programs. In the process, it is peddling some familiar falsehoods as well as some newly crafted misrepresentations. > This article describes Intuit’s nine lies, the false arguments about ReadyReturn and CalFile that Intuit and its lobbyists have been telling elected officials, staffers, and nonprofit organizations serving California’s low-income communities. It also evaluates Intuit’s proposed Free File alternative to the state’s existing programs. For all of Intuit’s assertions – whether regarding the purported shortcomings of the state programs or the purported benefits of the Free File initiative – the article offers a point-by-point refutation.

tragictrash 5y ago
I think it's more about the politics involved. You basically answered the question with the last quote in your response. It's all intuit, the enormous silent power they can weild through lobbying, and the disproportionately smaller power the tax payers have. It's fucked up, and there's no end in sight. Those senators love their money and power more than the people they purport to serve.
eatsyourtacos 5y ago
>If other country revenue systems can do this, why do you feel the US tax filing landscape is so different? Because we have 50 states that do everything differently? As other people said, the federal government doesn't even seem to know basic info like if you are married, how many dependent you have, etc etc. If we didn't have any states (or all states used like the same systems that could easily talk to each other) and everything was federal, then yeah it would probably be a piece of cake because all the info is already there. But, we don't.. everything is done differently everywhere, and that affects the taxes.
- CogitoCogito 5y ago
  The American political system isn’t uniquely more complicated than others; it simply doesn’t want to solve the problem. Lobbying by parasitical entities such as Intuit is the true reason. We could solve these problems if we chose to. We don’t.
- selbyk 5y ago
  Federal and State taxes are two completely separate things. Why can't they just send the federal tax bill and let states do what they want?

undersuit 5y ago

What if we just eliminated the I get a W-2, I enter the info that the IRS already knows into a 3rd party system, the IRS accepts it. We'll never make taxes easier for everyone, and this "tax gap" argument is great and all but I don't know why I have to do anything for my exceedingly simple taxes.

lurquer 5y ago
Your W-2 does not come from the IRS, though. It is created by your employer. The form is simply informing you what it reported to the IRS. The W-2 your employer created and sent could be wrong. It’s a screwed up system.
- undersuit 5y ago
  >The form is simply informing you what it reported to the IRS. So why do I submit it too? >The W-2 your employer created and sent could be wrong. Not a simple tax situation, I should be able to check my tax status of course so I can figure out when my simple taxes are borked by someone especially if it isn't in my favor.
- smileysteve 5y ago
  Three w-2 your employer created could be wrong, but it was reported to the IRS. Correcting it on a 1040 leads to an eventual audit, as opposed to you need to correct what was reported.