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IRS will look into setting up a free e-filing system

664 points by susiecambria 4y ago

susiecambria 4y ago
As someone who worked on policies directed at the low-income population, all I can say is, it's about time! The time and energy we put into promoting the District of Columbia's EITC campaign, helping recruit volunteers to prepare taxes for free, etc. could have been much better spent. I know there are challenges, mostly confronting lobbyists as the articles mentions. But we can put a man on the moon. . .
- hdjdjdbdkesb 4y ago
  > As someone who worked on policies directed at the low-income population Then I would certainly hope you are aware that it is completely free for low income residents to file their taxes with any number of services. This has been a solved problem for years and makes me a bit curious about your experience. Could you possibly comment on what issues you’ve encountered with the current free options?
LinuxBender 4y ago
Will there be a beta or early adopter version for people to provide feedback and will it have a security/privacy bug bounty program from day 1?
mikece 4y ago
Or they could save a TON of time and money by abolishing the income tax and going to a direct, national sales tax. (Or a 1% wealth tax on everyone... but our Billionaire Class won't stand for that.)
- deleted 4y ago
  [deleted]
- PaulDavisThe1st 4y ago
  Sales taxes are regressive, and the current US tax system is deliberately progressive, in order to reflect our understanding of the marginal value of income.
  - nightski 4y ago
    The FairTax proposal improved on this by providing a rebate to everyone to cover tax for essentials. It also removed taxation on businesses which would likely cause prices to come down. There were many benefits and their research showed that overall tax burden would actually be less for the lower & middle class and higher for upper class (which avoids income tax anyways). Unfortunately it was too radical I believe, there's no way the U.S. would make that big of a leap. It might still be slightly regressive, but that's not such a bad thing when overall tax burden would be reduced.
    - zibby8 4y ago
      Even if the rate is variable, sales taxes are still regressive. Poor people spend a much larger % of their income on goods compared to rich people. For me, personally, my sales tax would need to be around 1,000% (for every dollar I spend, I pay $10 in tax) to match what I pay in income tax.
      - nightski 4y ago
        Depends on what they are spending it on. If poor people are buying food & housing it would be tax free. If they are buying large screen TVs maybe not so much. But even then the claim was that prices would come down eliminating most of the cost of the tax (due to no taxes on businesses including payroll taxes). It also might mean higher wages. Obviously there was no way to prove these things as it hasn't been tried, but there was a lot of research done trying to model it out.
        zibby8 4y ago
        > But even then the claim was that prices would come down eliminating most of the cost of the tax (due to no taxes on businesses including payroll taxes) We actually frequently try lowering corporate taxes. What we find is that prices stay high, wages stay low, but profits increase. Crazy.
- candiddevmike 4y ago
  National LVT is a better solution IMO
- adventured 4y ago
  > abolishing the income tax and going to a direct, national sales tax Sales taxes are regressive. It's the rich and upper classes that stand to gain the most by the abolition of income taxes. They don't consume enough to drive up huge sales tax bills. In terms of positive generation, mostly they accumulate income and asset gains. Overwhelmingly they don't spend their wealth on buying Ferraris and mansions. In the US the top 10% pay 71% of all income taxes (while taking home 30% of the income). Their consumption is not high enough to offset if you switch to a sales tax system. It would do something beyond brutalizing the bottom 3/4 of people; it would destitute the majority of workers in the country if you attempted it and were serious about trying to bring in enough revenue to offset the loss of the income tax. The US has a very progressive income taxation system, far more so than most of Europe (including all of Scandinavia). The US middle class and below pay exceptionally low income taxes, the burden is overwhelmingly carried by the higher income brackets already.
  - RappingBoomer 4y ago
    yeah, america is definitely more progressive than scandanavia...just look at our oh so progressive tax system.. tee hee...
    - avgcorrection 4y ago
      Also more egalitarian...
    - s1artibartfast 4y ago
      I wouldn't be surprised if the US had more progressive taxes, at least at the federal level. 50% of people pay zero federal income taxes.
  - yamtaddle 4y ago
    > The US has a very progressive income taxation system, far more so than most of Europe (including all of Scandinavia). The US middle class and below pay exceptionally low income taxes, the burden is overwhelmingly carried by the higher income brackets already. We have progressive wage income taxes (much less so if you include highly-regressive FICA contributions at ~7.5% for W2 and ~15% for 1099 employees—but still) but overall the US income tax scheme is quite regressive, thanks to how capital gains taxes work, which leads to things like Warren Buffet observing that he enjoys a lower tax rate than his secretary does.
- jedberg 4y ago
  Besides the regressive nature of that, do the math to see how high that sales tax would have to be to replace the income tax. To give you an idea, total sales in the USA was about $6 trillion, and income tax revenue was $2 trillion. So you'd need a 33% national sales tax. How do you think someone who makes $50,000 a year and spends it all would feel about paying 33% in taxes, when today they probably pay closer to 10% today? Or if you make housing and food tax free, you'd need an even higher tax rate to make up for it. Most countries that do a national sales tax do it in addition to an income tax.
  - mywittyname 4y ago
    Thank you for doing the math on this. For some added support that your numbers are not crazy: https://en.wikipedia.org/wiki/Value-added_tax#Tax_rates https://en.wikipedia.org/wiki/Value-added_tax#Tax_rates
  - phpisthebest 4y ago
    >>So you'd need a 33% national sales tax. or you know a massive reduction in Federal Spending, the fact that US Sales was 6 trillion, and the US Government spent 4 Trillion should be ringing some alarms bells in people.... If we need a 33% national sales tax, that tells me the federal government SPENDS FAR TOOO MUCH MONEY
    - jedberg 4y ago
      Our government spends in line with most other western economies as a percent of GDP. Percent of sales doesn't tell you much about government spending.
      - phpisthebest 4y ago
        this seems to be a "If all your friends jumped off a bridge would you" type of response. Just because other western nations also have irresponsible levels of spending does not justify the US spending
  - uticus 4y ago
- Akronymus 4y ago
  A wealth tax? Very bad idea. Is debt counted in? Is it a difference in wealth from one year to the next? What if someone has a reduction in wealth? What IS wealth? Is thr same asset taxed multiple times? What if someone has to liquidate something because of such taxes?
  - ceejayoz 4y ago
    > Is debt counted in? Typically, no. Assets minus liabilities. > Is it a difference in wealth from one year to the next? No. > What if someone has a reduction in wealth? They owe less the next year. > What IS wealth? Assets minus liabilities. > Is thr same asset taxed multiple times? It's taxed every year, to the person who owns it. If it changes hands mid-year, prorate. > What if someone has to liquidate something because of such taxes? Their asset becomes cash, they pay the tax with it, and their wealth is smaller next year. Hopefully they plan ahead better for it. Wealth taxes exist. Entire nations manage to get this all sorted out effectively.
    - nightski 4y ago
      It would be interesting seeing just how difficult it is to value assets effectively.
    - jedberg 4y ago
      Most countries that had a wealth tax repealed it or partially repealed it because it was too complicated. Namely, how do you value private assets? How much is a paining worth? Or your private company? Houses are easy to do because there is a ton of data and comparables (and even then wealthy people contest those assessments). Now imagine the government getting into the business of valuing private companies.
      - ceejayoz 4y ago
        Again, this is already done. Switzerland: (https://www.wealthandpolicy.com/wp/BP133_Countries_Switzerland.pdf https://www.wealthandpolicy.com/wp/BP133_Countries_Switzerla...) > The value of private companies is determined each year by the cantonal tax authorities based on an inter-cantonal administrative guideline agreed upon by the cantonal tax departments. Taxpayers may challenge the application of this guideline in court but appeals are rarely successful (cf. an example in section 0, below). In case the fair-market value of operational companies cannot easily be assessed (e.g. because of lack of recent sales between independent third parties), their value is determined according to the formulaic method, called the practitioner's method. A company's value is determined by calculating the weighted average of its ‘earnings value’ and its net asset value (i.e. fair market value of assets minus liabilities), thereby counting the earnings value twice. The earnings value is determined by capitalising the adjusted average net profit of the last two or three years with a capitalisation rate (of currently 7%), which applies uniformly to all industries. Holding companies or real-estate companies are valued based on the net asset value of the underlying assets. It won't be perfect, but it's predictably imperfect.
- jayd16 4y ago
  You'd still need to file taxes to declare the number that wealth tax applies to...
- kepler1 4y ago
  This doesn't go far enough! If you really believe in equality, we need to have a flat tax on everyone. Each person should just pay $1000 per year, and that's it. That is truly fair. /s
  - nightski 4y ago
    It’s fair because it’s based on consumption, or the value you extract from society. Not what you contribute.
- mythrwy 4y ago
  Land and resource usage taxes (aluminum, oil, whatever) might be more efficient and produce better outcomes. It seems easier to come up with that value every year and let the taxed pass the costs on to final consumers rather then chasing around a million waitresses for unreported tips. Taxing labor was never a good idea in my opinion.
- NaturalPhallacy 4y ago
  Sales taxes are wildly regressive. That is, they affect the poorest the most.
thot_experiment 4y ago
There's no reason the government couldn't just tell me how much money they took each year and give me a chance to contest it if I thought it was wrong. One of my best friends lives in Tokyo and every time I have to think about taxes I get this little pang of jealousy at how sane and un-infested with rent seeking trashcans (intuit etc.) the Japanese system seems. If you need the government to behave against the best interest of the people in order for your industry to exist maybe your industry shouldn't exist.
- dustymcp 4y ago
  This is how it works where i live, they do the taxes and i can contest or add missing expenditure, its super easy if your employed you dont really do anything for filing its all done automatically.
- tmpz22 4y ago
  I thought Japanese government services were famously difficult for foreigners to navigate? Is this assumption wrong or is it just very effective for Japanese Citizens only?
  - bojo 4y ago
    It's honestly a lot easier as a foreigner, your place of work takes care of your taxes for you. That said, I've had to file taxes outside of that scope before and it was fairly straightforward. They have people at the tax office to assist you.
    - LordDragonfang 4y ago
      >as a foreigner, your place of work takes care of your taxes for you. My understanding is that isn't just the case for foreigners, it's the case for everyone. Companies are expected to just take care of things like that for you, and in return you're expected to treat them with utmost loyalty. I imagine things have changed somewhat in the past decade, but this writeup is illuminating: https://www.kalzumeus.com/2014/11/07/doing-business-in-japan/ https://www.kalzumeus.com/2014/11/07/doing-business-in-japan...
RappingBoomer 4y ago
oh, that's nice of them to "look into it". Just about all the other western nations either do taxes for the citizens or provide a free system for citizens... a neoliberal exploitation plantation, if you can keep it...
PaulDavisThe1st 4y ago
They've almost got a working system already. Free File Fillable Forms (alliteration intended?) has improved each year since it has existed. It has the downside that it looks like the paper forms, which is likely to be offputting to some. If they just finished it so that it (a) does 100% of the math for you (b) transfers 100% of the values between forms for you, it would be a system that could be used by anyone. That's not to say that a totally different UI approach (e.g. as used by Turbo Tax) would not be even better, but they absolutely do not need to "start from scratch"
- kodah 4y ago
  Free file fillable forms is run by Intuit and, iirc, is client side only.
  - vlark 4y ago
    Free File Fillable Forms is owned by On-Line Taxes, Inc. of St. Joseph, Missouri, not Intuit. https://freefilefillableforms.com/home/privacy_security.php https://freefilefillableforms.com/home/privacy_security.php https://www.olt.com/main/home/leadership.asp https://www.olt.com/main/home/leadership.asp
    - kodah 4y ago
      Interesting. Internally we called it Quad F and I did some work on it. Looks like it changed hands at some point. Vox references our work here: https://www.vox.com/policy-and-politics/22596072/irs-turbotax-hr-block-free-file-tax-return https://www.vox.com/policy-and-politics/22596072/irs-turbota... > The timing is auspicious for such an endeavor. As you may know, if you make $72,000 or less, you’re eligible for a free return through the IRS Free File program, including software provided by Intuit, the company that operates TurboTax. If you make more, you’re eligible for Free File Fillable Forms, an Intuit product. If you open the actual forms (not the homepage) the asset links went through an Intuit CDN. I'm not sure if this is still the case. Even more oddly, the Vox article is from April 2022, so if it was sold or transferred it was recently.
exabrial 4y ago
I would just rather get rid of taxes. Sort of tired of paying for the 1%'s beach vacations.
- kibwen 4y ago
  Taxes don't pay for beach vacations of the 1%. At worst, they pay for the beach vacations of defense contractors and health insurance middlemen. The 1% pay for their beach vacations via record-high executive bonuses that are siphoned from the corporate profits that they refuse to share with their employees.
  - exabrial 4y ago
    Not quite. Where do you think all of this "student loan forgiveness" money is going?
    - kibwen 4y ago
      Now I'm interested to see where this is going. The plutocracy do not tend to regularly take out student loans. Federal student loans, the one the federal government has the power to discharge, were paid out of the pockets of taxpayers, where it was then used to fund the beach vacations of university administrators, a decade or two ago. Meanwhile, in the present, the beneficiaries of loan forgiveness are the lower-middle class college-educated who were poor enough to need a loan, rich enough to consider college in the first place, and unlucky enough to not take the one major (computer science) that would allow them to pay back their loan in the modern economy. Say what you will about student loan forgiveness, but at no point is any facet of it an appreciable vector of plutocratic wealth concentration.
exabrial 4y ago
The real solution to taxes and filing is: Have the government send me a bill each month.
molsongolden 4y ago
One of the hurdles here is that the IRS has increasingly deputized tax preparers as their first line of enforcement via preparer penalties [1]. Another is that a free filing system with pre-populated returns shifts the information asymmetry involved in tax filing to be fully in the taxpayer's favor. Many people have an "I need to report everything because I don't know what the IRS knows" mindset. If the IRS populates a taxpayer's return with all the info they have, there's no incentive to report anything not listed. [1] https://www.irs.gov/payments/tax-preparer-penalties https://www.irs.gov/payments/tax-preparer-penalties
- deleted 4y ago
  [deleted]
- jedberg 4y ago
  You know you can log in and see what the IRS knows, right? They make that available to you in their portal. They post it after the tax deadline though, but you can go back and see what they knew about you in previous years (the forms they got, not what you filed).
  - molsongolden 4y ago
    Yeah! Most info is available via transcript requests[1] but I don't believe most taxpayers know about this or bother checking what's in there. [1] https://www.irs.gov/individuals/get-transcript https://www.irs.gov/individuals/get-transcript
    - fswd 4y ago
      I've been waiting since 2016 for my transcript request..
  - bombcar 4y ago
    You can know it for the current year, too, file for an extension and way overpay estimated tax (you can't be penalized if you overpaid). Wait until after file date but before extension date, and request all the transcripts.
ivolimmen 4y ago
Like we have for years (Netherlands). We used to have an application you could download to fill your returns. It could be downloaded for Windows, Mac and Linux. Now it is just a website and it is very elaborate. Most people can go through the wizard and click OK; everything is pre-filled. Only if in some cases you require to fill in extra's. Like selling your house and buying a new one makes the returns trickier. In those cases people often opt for letting the tax returns be done by a professional (well at least: I do).
- kibwen 4y ago
  Ah, but that wouldn't work here in the US because, of course, for one thing, what most people usually overlook is that, the first thing you have to remember is, it really is the case that,
- suprjami 4y ago
  We have the same situation here in Australia, except the old e-Tax app was Windows-only and was the only reason Linux and Mac users kept a Windows XP VM around to be booted up once a year to file a tax return. Yet another basic service that the "greatest country in the world" is missing that the rest of civilisation has had longer than iPhones.
supernova87a 4y ago
Isn't one of the legitimate barriers to an easy tax system that we have such a patchwork of non-communicating state governments and tax policies that for many people a pre-filled form would be badly missing info, or worse, missing out on credits people are due? Although, maybe no worse than it is now. It feels like the states treasuries/tax collectors barely talk to the IRS (oversimplifying of course). That and there are so many non-automatically-reportable exceptions (income doesn't have to be logged and calculated consistently and sent to the IRS), loopholes, deductions, etc. in tax law. Although, again, most of the population could be satisfied / correctly done with a baseline product. At least brokerage capital gains started being reported automatically (and mandatory) although I notice there are tons of errors than can crop up, as well as exceptions that break the system. Not saying I like the situation Intuit keeps us in, and we should automate as much as possible, but aren't there deeper reasons fueling their existence? We should fix those problems as well -- but I suppose that is asking Congress to pass or restrain themselves from mucking up the system every time they want to inject some favored loophole.
- TulliusCicero 4y ago
  The answer then is to at least pre-fill the information the government does know, because it was reported by banks/your employer/whoever else. Why do I have to enter in how much interest I made or stock sales or whatever when the relevant financial institution already reported this to the feds? The computer is less likely to screw it up than I am.
mrtweetyhack 4y ago
mattanimation 4y ago
IRS will look into not charging you more to use a service to be robbed. Got it.
- ezekg 4y ago
  Violently robbed, at that.
aaaaaaaaaaab 4y ago
Turbotax: *sweating intensifies*
metadat 4y ago
Archive link: https://archive.ph/TtmGY https://archive.ph/TtmGY https://web.archive.org/web/20220907130035/https://www.washingtonpost.com/us-policy/2022/09/07/irs-free-efile-biden/ https://web.archive.org/web/20220907130035/https://www.washi...
- NaturalPhallacy 4y ago
  I'd upvote you twice if I could for including archive.org. archive.ph is very hostile to VPN users.
  - metadat 4y ago
    Good to know, I'll keep that in mind for the future. Cheers @NP.
bradgranath 4y ago
How 'bout they focus on fixing the one they already have (freefilefillableforms)?
- jsmith45 4y ago
  That one is actually third party, originally Intuit, now `On-LineTaxes, Inc`. The system that IRS was charged with creating would basically amount to this, and it might be that they simply buy the system and make it an offical IRS product. They already had sufficent control over FFFF to force Intuit to divest after Intuit exited the free file alliance. I unlike many people who seem to be hoping for basically ISR Turbotax or nicer, I really cannot see the IRS offing a more guided walkthough style system instead, since that is far more complicated than maintaining basically digital versions of the paper forms. In some areas TurboTax and the others get into more or less the business of offering tax advice, which may even be incorrect. Those businesses can afford to reimburse you if their wizards result in incorrect totals due to a misunderstanding. The IRS on the other hand would need to make sure that the wizards never accidentally misclassify anything, even for incredibly rare esoteric cases. This could be done by possibly asking many extra seemingly irreleavnt questions to rule out all these edge cases, or to dumb the whole system down making it closer to just electronic versions of the forms. The result the IRS would pick is pretty obvious, go with the simpler almost-identical to the paper forms options.
tomohawk 4y ago
Just repeal the 16th amendment - the income tax is too intrusive, and its too much of a temptation for politicians to use it for social engineering. There are other ways to tax that do not require the government to know everything about what everyone is doing.
- uticus 4y ago
  > its too much of a temptation for politicians to use it for social engineering Bullseye on the problem. This is the number one reason for the complexity. And the complexity is the number one reason for the massive resources required just to make the system work. However, the solution... repeal the 16th amendment? If my memory of high school history class serves, didn't trying alternatives lead to the 16th amendment? [edit] To provide some more focus: I'm not saying the politicians are the problem, but the carrot-and-stick social engineering.
- jcranmer 4y ago
  > Just repeal the 16th amendment - the income tax is too intrusive Fun fact: the 16th Amendment does not give Congress the power to levy taxes on income. Congress already had that power. What the 16th Amendment does is directly overturn SCOTUS's Pollock decision, which ruled that a tax on income derived from rent was effectively a tax on property and therefore a direct tax, which the Constitution requires to be apportioned to the states based on population. Even if you repealed the 16th Amendment, it's doubtful that modern SCOTUS would uphold the precedent of Pollock anyways (already shortly after the passage of the 16th Amendment, SCOTUS effectively overruled Pollock on the grounds that income taxes were indirect taxes anyways). This makes the 16th Amendment arguably the single most useless amendment to the US constitution.
methodical 4y ago
"look into" == probably not going to happen
Rackedup 4y ago
Free automatic filling system? yeah right... they are wanting people to forget credits and loopholes.
rconti 4y ago
One reason this has been difficult to get approve is that low-tax crusaders have been blocking it. However you want to frame that -- people who want no taxes at all, people who simply don't want taxes to go up more, whatever. Automatic income tax withholding was opposed for the reason reason(s). People who want taxes to be lower don't want the "pain" of taxes to be hidden. They want people to cringe every time they write a check for tens of thousands of their hard-earned dollars, not just have it magically spirited off to the government. Filling out taxes helps share some of the same pain. Every year, every tax filer thinks "man, taxes suck." This undoubtedly has at least some effect on voters' willingness to pay even more.
- Spivak 4y ago
  Which is fine, if you want the number to be front and center then do that, have the pain be in the sticker shock not the process of paying it.
  - throwayyy479087 4y ago
    I agree - a better way to accomplish this aim is to have a free system, then send out a receipt to every filer saying "YOU PAID $133,349 IN TAXES" The IRS being the only org most people have to figure out what they owe money to is bizarre, especially given the penalties.
- divbzero 4y ago
  > People who want taxes to be lower don't want the "pain" of taxes to be hidden. They want people to cringe every time they write a check for tens of thousands of their hard-earned dollars, not just have it magically spirited off to the government. This argument against automated tax filing seems to make sense to me. But if it’s true, shouldn’t we have manual tax returns for vehicles, real estate, sales, and fuel?
  - pclmulqdq 4y ago
    We actually do have these things in some places, although things like the gas tax and the sales tax are levied on stores, not individual consumers - they just pass the cost on to consumers. There is a tax analogous to a sales tax in most US states called a "consumption tax" or something similar, where you are asked to pay sales tax on stuff you bought outside of the state (and list the stuff). I have personally filled out real estate tax forms and car-related tax forms.
sydbarrett74 4y ago
perfectstorm 4y ago
They are going to look into it for $15 million dollars. Give that $15 million to a company like VMWare Tanzu Labs and they will deliver quality software which we can all use. That being said, i don't expect this to happen in the next 5-10yrs because of ~bribing~ err lobbying (because this is America). TurboTax and H&R Block are not going to let this happen.
ketralnis 4y ago
Free is great but with 143 million taxpayers a nominal $10 fee could make such a system self-funding
- yosito 4y ago
  Hey bro, heard you like tax, so we're taxing your tax so you can pay taxes while you pay taxes.
  - Something1234 4y ago
    How is it any different than the private subsidy to intuit that exists now cause no one wants to figure it out?
    - oblio 4y ago
      Well, it's better, for one. Instead of the money potentially being used by the government, where on paper everyone is a shareholder. Now you pass that money to a company, where the beneficiaries are a restricted set of shareholders and top executives. Much better!
  - askvictor 4y ago
    In Australia, you can claim a tax deduction for the costs incurred in managing your tax deductions.
bogomipz 4y ago
From the article: >"The Internal Revenue Service will spend $15 million studying a free, government-backed tax filing system under a provision in the sweeping climate and health-care law Congress passed this summer." Why does "studying a free filing system" require $15 million? >"Now lawmakers including Sens. Elizabeth Warren (D-Mass.) and Sherrod Brown (D-Ohio), who pushed for the IRS free-file study, say they hope the funding will encourage the agency to more vigorously pursue its own platform." This is the congress who had been cutting the IRS funding forever[1]. There's no way that the IRS can pursue its own platform without Congress loosening the purse strings. >"Sen. Ron Wyden (D-Ore.), chair of the chamber’s Finance Committee, asked the IRS to conduct a taxpayer opinion survey on an e-file system and consult a vendor to begin to build a government-backed platform." I think this answers my above question of why "studying a free filing system" requires $15 million. I'm guessing the "vendor" here is McKinsey or one of the other big 4 consulting firms. They will hoover most of the $15 million with the results of the study being "if you pay us, McKinsey, a hundred million dollars we can definitely build this for you." [1] https://www.propublica.org/article/how-the-irs-was-gutted https://www.propublica.org/article/how-the-irs-was-gutted
klyrs 4y ago
The passive phrase "will look into" fills me with dread. Old Seattleites will remember voting for a light rail system, only to watch friends of politicians get hired to "consult" on the project and piss away the entire budget in the consultation phase. Just do it!
- divbzero 4y ago
  I wondered about this too, how they’re budgeting $15 million to “look into” an e-filing system. With the right team of project, product, design, and engineering talent, couldn’t $15 million go a long ways towards building a working MVP, at least for simpler tax returns? But I’m sure that’s just wishful thinking in my naive developer mind…
  - hackerlight 4y ago
    The Obamacare website cost billions. Governments struggle with tech. They tend to hire Accenture types who bullshit the clueless bureaucrats and siphon off the taxpayer's cash. It's not their money and they're not staked in the upside with bonuses and you can't get fired from public service, so why should they care? The incentives aren't there for performance. And even if they did care, they often don't have the competency to achieve it effectively and efficiently anyway. That's not to say we shouldn't try, though, other countries have figure out how to have a well run public efiling service, so it's possible.
ahoy 4y ago
"will look into" is code for will not do.
coryfklein 4y ago
I can't tell you how relieved I am to hear that the overworked and underfunded Internal Revenue Service is going to "look into this". Maybe my grandchildren some day will have a more pleasant experience filing their taxes.
dandigangi 4y ago
Slightly hard to believe almost because of Turbo Tax and others lobbying so hard to keep their business making hand over foot in cash.
RhysU 4y ago
We pay taxes wrong. A silly example shows this to be true. Suppose there's a planetary government and a solar government. Hear me out. Filing a local, state, federal, planetary, and solar return each year is stupid. The solar government shouldn't process trillions of returns. We should file local. Local should file state. State should file federal. Federal should file planetary. Planetary should file solar. Now take away planetary and solar. Clearly the way to traverse a tree is one level at a time.
- baby 4y ago
  That makes sense to me, states are basically tiny countries. You should pay taxes to the body that has your best interest, and that body is probably your city. Who has the city's best interest at heart? The state. And so on.
- jrib 4y ago
  Ha, I can just imagine what happens when the planetary government finds an error in an individuals taxes: Planetary: Uh, federal, please correct this issue. Federal: Uh, state, please correct... ...
  - rsstack 4y ago
    The state should have ultimate responsibility once it accepts the return from a resident. If the federal runs an audit and finds a mistake it needs to "convince" the state to do better: actions through Congress, fines based on a narrow system, forced training, etc., or just eat the loss (or take the gain). In this model the federal government only deals with inter-state taxation and with collecting taxes from the state. The goal is to take away the responsibility AND authority from the federal IRS, to streamline the process. If the IRS remains responsible but just has the states "do a first draft", it's useless.
- pclmulqdq 4y ago
  My state and local governments have figured out the right way to do this. I pay property tax to the state, and income tax to the federal government. There's no overlap or issue. I used to live in NYC, and that was a kafkaesque nightmare in comparison.
standardUser 4y ago
This seems like a marginal improvement at best. If your taxes are at all complicated, this likely won't be sufficient and you'll still be paying professionals. If your taxes are fairly simple, you can already file for free without too much effort. I suppose there is an in-between group who may benefit from saving the $50-$200 for more advanced online self-filing. I've been that person many years in the past, but I could easily afford those fees. Better to have invested that $15 million in radical ways to simplify this entire insane(ly stupid) process.
hospitalJail 4y ago
My household spends 2 weekends per year on taxes. We own a few companies and would otherwise be spending time on those companies(or maybe our families). A streamlined tax system is worth 4 days per year. I imagine that in the future, it will take more time as our businesses grow.
- deleted 4y ago
  [deleted]
rlewkov 4y ago
From the article: "The Internal Revenue Service will spend $15 million studying a free, government-backed tax filing system". It's a long way from studying to implementing. Intuit pays their lobbyists to make sure this doesn't happen.
deleted 4y ago
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formvoltron 4y ago
which will cost 300M and not work.
imchillyb 4y ago
If the system were setup with... -NO DEDUCTIONS WHATSOEVER!!! -Flat single digit percentage of gross wage. There would be no need for the entire Tax Preparation industry. Our government hasn't worked for: We The People in decades, they could have implemented this free-filing system at any time, and yet they have not. Our government doesn't work for us. They're not going to make paying or figuring out what's owed to them any easier for us. Why would they? If the feds make preparation and filing easy for us, we'll all get to see just how far the big red-white-and-blue dick is shoved up our collective asses. They sure wouldn't want that, now, would they?
bastard_op 4y ago
The stock price of Intuit dropped by like 10,000% with the sheer insinuation of such a thing occurring.
ryanSrich 4y ago
You could fix the tax system in a few easy steps: - Eliminate capital gains tax. Taxing capital gains is essentially blind theft, and there's a strong moral foundation to stop doing it. I believe the US would have greater economic prosperity by eliminating a capital gains tax. - Just tell people what they owe/what they are owed. You're the IRS, there's no reason why I should be telling YOU how much I made when you already know the answer. If I think you're wrong, I can prove that. - Stop auditing people who are making less than $5m/year in income. The amount of revenue recovered from smaller earners is negligible and resources that now go to the IRS to staff thousands of agents could be used a hell of a lot better.
- fphhotchips 4y ago
  > Eliminate capital gains tax. That's a terrible idea. Capital gains is basically the only way to tax the uber and intergenerationally wealthy. If anything, capital gains tax should be at the same level as income tax, so that there's less economic incentive to game the system.
  - ryanSrich 4y ago
    > Capital gains is basically the only way to tax the uber and intergenerationally wealthy That's just simply not true. There are thousands of ways to tax the ultra wealthy. We just don't use any of them. Capital gains tax is a horrendous idea that mostly punishes the middle class for doing well in the stock market. The uber wealthy are feeling none of that pain. Find a different solution.
    - NaturalPhallacy 4y ago
      >Capital gains tax is a horrendous idea that mostly punishes the middle class for doing well in the stock market. That's simply not true. The top 1% own 50% of all stocks: https://finance.yahoo.com/news/the-richest-1-own-50-of-stocks-held-by-american-households-150758595.html https://finance.yahoo.com/news/the-richest-1-own-50-of-stock... The whole other 99% of the population share 50% of all stocks. Most of "middle class" own little to no significant amount of stocks. Also, if you must work, you're working class. The "middle class" is a propaganda term to keep the working class divided between those who feel like they're successful from those who are struggling. And speaking to the success of that propaganda: 22% of people think they're "middle class" and aren't: https://finance.yahoo.com/news/22-americans-mistakenly-think-middle-100600281.html https://finance.yahoo.com/news/22-americans-mistakenly-think...
sizzle 4y ago
how much is intuit pouring jnto lobbying against this win for American citizen
gwbas1c 4y ago
The single most frustrating thing about Turbo Tax is the data entry: I'm not an expert, and chances are I'll get something wrong. Now, the IRS has all the information to provide a pre-filled-out tax return. They even do it internally to check that I filed my taxes correctly! Can they legally provide it to me... NO! When I did have to deal with errors, I only knew because the IRS sent me a bill. (Someone sent an incorrect W2 to the IRS.) I never had the opportunity to correct the error before I submitted my taxes. It would be so much easier if TurboTax could hook into an API that downloaded my tax return and then I could check it for errors. I'm sure they'll figure out some kind of upsell that makes it "worth it" for me to pay them $100 as opposed to using the IRS's version.
- psd1 4y ago
  I don't love the UK online return, but it's a solid app and it's free to use. Libertarianism is like communism; it may seem great in theory but devolves into oligarchy in practice.
smm11 4y ago
Only in the US would there be a system where you have to pay money to pay taxes.
fundad 4y ago
bumblebritches5 4y ago
elicash 4y ago
If people think the problem here is simply lobbying by a few companies, you are WAY underestimating the problem. This is not as simple as building a website. There's an entire, incredibly outdated system that needs to be rebuilt and totally reimagined from the ground up. https://www.washingtonpost.com/opinions/interactive/2022/irs-pipeline-tax-return-delays/ https://www.washingtonpost.com/opinions/interactive/2022/irs...
- askvictor 4y ago
  Then how do Intuit et al do electronic filing?
  - elicash 4y ago
    What people in this thread are suggesting isn't recreating Turbotax, it's something that takes the data they already have and giving it to the user to simply confirm and say "yeah that's good."
TheChetu 4y ago
As a tax preparer I have been hoping the previous attempts to make a system would prevail. Intuit and other companies have been blocking these things for a very long time because they mislead people into paying for their e-file instead of allowing people to use the proper IRS free e-file they are required to offer by law. This would reduce some of my business but also free up time for the people that actually need preparation services such as people who have a lot of deductions, businesses, rental properties, etc. My overall business would only change minimally but the cheats at Intuit, etc. would lose a lot of money in comparison because they wouldn't be able to charge money for a free offered service that is hidden as well as they can get away with.
shrimpx 4y ago
$15 million to “study”. Doesn’t sound like anything salient but maybe a step forward.
eric4smith 4y ago
Hahahaha... everyone know what when someone says "I will look into it", it means there will be absolutely no action taken. hahahahahahahahaha
mugivarra69 4y ago
look into = 5y+ ETA
qwezxcrty 4y ago
Even the evil Chinese government do better in this.. For the majority of people, the tax deduction is just in your income, and you have a (although questionable in privacy) mobile app if you are getting tax return or need to file for other off-the-book incomes.
esbranson 4y ago
§ 10301(1)(B) (B) Task force to design an irs-run free “direct efile” tax return system.—For necessary expenses of the Internal Revenue Service to deliver to Congress, within nine months following the date of the enactment of this Act, a report on (I) the cost (including options for differential coverage based on taxpayer adjusted gross income and return complexity) of developing and running a free direct efile tax return system, including costs to build and administer each release, with a focus on multi-lingual and mobile-friendly features and safeguards for taxpayer data; (II) taxpayer opinions, expectations, and level of trust, based on surveys, for such a free direct efile system; and (III) the opinions of an independent third-party on the overall feasibility, approach, schedule, cost, organizational design, and Internal Revenue Service capacity to deliver such a direct efile tax return system, $15,000,000, to remain available until September 30, 2023: Provided, That these amounts shall be in addition to amounts otherwise available for such purposes. https://govinfo.gov/link/bills/117/hr/5376?billversion=enr&link-type=uslm#d1358e1657 https://govinfo.gov/link/bills/117/hr/5376?billversion=enr&l...

664 points by susiecambria 4y ago

As someone who worked on policies directed at the low-income population, all I can say is, it's about time! The time and energy we put into promoting the District of Columbia's EITC campaign, helping recruit volunteers to prepare taxes for free, etc. could have been much better spent. I know there are challenges, mostly confronting lobbyists as the articles mentions. But we can put a man on the moon. . .

hdjdjdbdkesb 4y ago
> As someone who worked on policies directed at the low-income population Then I would certainly hope you are aware that it is completely free for low income residents to file their taxes with any number of services. This has been a solved problem for years and makes me a bit curious about your experience. Could you possibly comment on what issues you’ve encountered with the current free options?

LinuxBender 4y ago

Will there be a beta or early adopter version for people to provide feedback and will it have a security/privacy bug bounty program from day 1?

mikece 4y ago

Or they could save a TON of time and money by abolishing the income tax and going to a direct, national sales tax. (Or a 1% wealth tax on everyone... but our Billionaire Class won't stand for that.)

deleted 4y ago
[deleted]
PaulDavisThe1st 4y ago
Sales taxes are regressive, and the current US tax system is deliberately progressive, in order to reflect our understanding of the marginal value of income.
- nightski 4y ago
  The FairTax proposal improved on this by providing a rebate to everyone to cover tax for essentials. It also removed taxation on businesses which would likely cause prices to come down. There were many benefits and their research showed that overall tax burden would actually be less for the lower & middle class and higher for upper class (which avoids income tax anyways). Unfortunately it was too radical I believe, there's no way the U.S. would make that big of a leap. It might still be slightly regressive, but that's not such a bad thing when overall tax burden would be reduced.
  - zibby8 4y ago
    Even if the rate is variable, sales taxes are still regressive. Poor people spend a much larger % of their income on goods compared to rich people. For me, personally, my sales tax would need to be around 1,000% (for every dollar I spend, I pay $10 in tax) to match what I pay in income tax.
    - nightski 4y ago
      Depends on what they are spending it on. If poor people are buying food & housing it would be tax free. If they are buying large screen TVs maybe not so much. But even then the claim was that prices would come down eliminating most of the cost of the tax (due to no taxes on businesses including payroll taxes). It also might mean higher wages. Obviously there was no way to prove these things as it hasn't been tried, but there was a lot of research done trying to model it out.
      - zibby8 4y ago
        > But even then the claim was that prices would come down eliminating most of the cost of the tax (due to no taxes on businesses including payroll taxes) We actually frequently try lowering corporate taxes. What we find is that prices stay high, wages stay low, but profits increase. Crazy.
candiddevmike 4y ago
National LVT is a better solution IMO
adventured 4y ago
> abolishing the income tax and going to a direct, national sales tax Sales taxes are regressive. It's the rich and upper classes that stand to gain the most by the abolition of income taxes. They don't consume enough to drive up huge sales tax bills. In terms of positive generation, mostly they accumulate income and asset gains. Overwhelmingly they don't spend their wealth on buying Ferraris and mansions. In the US the top 10% pay 71% of all income taxes (while taking home 30% of the income). Their consumption is not high enough to offset if you switch to a sales tax system. It would do something beyond brutalizing the bottom 3/4 of people; it would destitute the majority of workers in the country if you attempted it and were serious about trying to bring in enough revenue to offset the loss of the income tax. The US has a very progressive income taxation system, far more so than most of Europe (including all of Scandinavia). The US middle class and below pay exceptionally low income taxes, the burden is overwhelmingly carried by the higher income brackets already.
- RappingBoomer 4y ago
  yeah, america is definitely more progressive than scandanavia...just look at our oh so progressive tax system.. tee hee...
  - avgcorrection 4y ago
    Also more egalitarian...
  - s1artibartfast 4y ago
    I wouldn't be surprised if the US had more progressive taxes, at least at the federal level. 50% of people pay zero federal income taxes.
- yamtaddle 4y ago
  > The US has a very progressive income taxation system, far more so than most of Europe (including all of Scandinavia). The US middle class and below pay exceptionally low income taxes, the burden is overwhelmingly carried by the higher income brackets already. We have progressive wage income taxes (much less so if you include highly-regressive FICA contributions at ~7.5% for W2 and ~15% for 1099 employees—but still) but overall the US income tax scheme is quite regressive, thanks to how capital gains taxes work, which leads to things like Warren Buffet observing that he enjoys a lower tax rate than his secretary does.
jedberg 4y ago
Besides the regressive nature of that, do the math to see how high that sales tax would have to be to replace the income tax. To give you an idea, total sales in the USA was about $6 trillion, and income tax revenue was $2 trillion. So you'd need a 33% national sales tax. How do you think someone who makes $50,000 a year and spends it all would feel about paying 33% in taxes, when today they probably pay closer to 10% today? Or if you make housing and food tax free, you'd need an even higher tax rate to make up for it. Most countries that do a national sales tax do it in addition to an income tax.
- mywittyname 4y ago
  Thank you for doing the math on this. For some added support that your numbers are not crazy: https://en.wikipedia.org/wiki/Value-added_tax#Tax_rates https://en.wikipedia.org/wiki/Value-added_tax#Tax_rates
- phpisthebest 4y ago
  >>So you'd need a 33% national sales tax. or you know a massive reduction in Federal Spending, the fact that US Sales was 6 trillion, and the US Government spent 4 Trillion should be ringing some alarms bells in people.... If we need a 33% national sales tax, that tells me the federal government SPENDS FAR TOOO MUCH MONEY
  - jedberg 4y ago
    Our government spends in line with most other western economies as a percent of GDP. Percent of sales doesn't tell you much about government spending.
    - phpisthebest 4y ago
      this seems to be a "If all your friends jumped off a bridge would you" type of response. Just because other western nations also have irresponsible levels of spending does not justify the US spending
- uticus 4y ago
Akronymus 4y ago
A wealth tax? Very bad idea. Is debt counted in? Is it a difference in wealth from one year to the next? What if someone has a reduction in wealth? What IS wealth? Is thr same asset taxed multiple times? What if someone has to liquidate something because of such taxes?
- ceejayoz 4y ago
  > Is debt counted in? Typically, no. Assets minus liabilities. > Is it a difference in wealth from one year to the next? No. > What if someone has a reduction in wealth? They owe less the next year. > What IS wealth? Assets minus liabilities. > Is thr same asset taxed multiple times? It's taxed every year, to the person who owns it. If it changes hands mid-year, prorate. > What if someone has to liquidate something because of such taxes? Their asset becomes cash, they pay the tax with it, and their wealth is smaller next year. Hopefully they plan ahead better for it. Wealth taxes exist. Entire nations manage to get this all sorted out effectively.
  - nightski 4y ago
    It would be interesting seeing just how difficult it is to value assets effectively.
  - jedberg 4y ago
    Most countries that had a wealth tax repealed it or partially repealed it because it was too complicated. Namely, how do you value private assets? How much is a paining worth? Or your private company? Houses are easy to do because there is a ton of data and comparables (and even then wealthy people contest those assessments). Now imagine the government getting into the business of valuing private companies.
    - ceejayoz 4y ago
      Again, this is already done. Switzerland: (https://www.wealthandpolicy.com/wp/BP133_Countries_Switzerland.pdf https://www.wealthandpolicy.com/wp/BP133_Countries_Switzerla...) > The value of private companies is determined each year by the cantonal tax authorities based on an inter-cantonal administrative guideline agreed upon by the cantonal tax departments. Taxpayers may challenge the application of this guideline in court but appeals are rarely successful (cf. an example in section 0, below). In case the fair-market value of operational companies cannot easily be assessed (e.g. because of lack of recent sales between independent third parties), their value is determined according to the formulaic method, called the practitioner's method. A company's value is determined by calculating the weighted average of its ‘earnings value’ and its net asset value (i.e. fair market value of assets minus liabilities), thereby counting the earnings value twice. The earnings value is determined by capitalising the adjusted average net profit of the last two or three years with a capitalisation rate (of currently 7%), which applies uniformly to all industries. Holding companies or real-estate companies are valued based on the net asset value of the underlying assets. It won't be perfect, but it's predictably imperfect.
jayd16 4y ago
You'd still need to file taxes to declare the number that wealth tax applies to...
kepler1 4y ago
This doesn't go far enough! If you really believe in equality, we need to have a flat tax on everyone. Each person should just pay $1000 per year, and that's it. That is truly fair. /s
- nightski 4y ago
  It’s fair because it’s based on consumption, or the value you extract from society. Not what you contribute.
mythrwy 4y ago
Land and resource usage taxes (aluminum, oil, whatever) might be more efficient and produce better outcomes. It seems easier to come up with that value every year and let the taxed pass the costs on to final consumers rather then chasing around a million waitresses for unreported tips. Taxing labor was never a good idea in my opinion.
NaturalPhallacy 4y ago
Sales taxes are wildly regressive. That is, they affect the poorest the most.

thot_experiment 4y ago

There's no reason the government couldn't just tell me how much money they took each year and give me a chance to contest it if I thought it was wrong. One of my best friends lives in Tokyo and every time I have to think about taxes I get this little pang of jealousy at how sane and un-infested with rent seeking trashcans (intuit etc.) the Japanese system seems. If you need the government to behave against the best interest of the people in order for your industry to exist maybe your industry shouldn't exist.

dustymcp 4y ago
This is how it works where i live, they do the taxes and i can contest or add missing expenditure, its super easy if your employed you dont really do anything for filing its all done automatically.
tmpz22 4y ago
I thought Japanese government services were famously difficult for foreigners to navigate? Is this assumption wrong or is it just very effective for Japanese Citizens only?
- bojo 4y ago
  It's honestly a lot easier as a foreigner, your place of work takes care of your taxes for you. That said, I've had to file taxes outside of that scope before and it was fairly straightforward. They have people at the tax office to assist you.
  - LordDragonfang 4y ago
    >as a foreigner, your place of work takes care of your taxes for you. My understanding is that isn't just the case for foreigners, it's the case for everyone. Companies are expected to just take care of things like that for you, and in return you're expected to treat them with utmost loyalty. I imagine things have changed somewhat in the past decade, but this writeup is illuminating: https://www.kalzumeus.com/2014/11/07/doing-business-in-japan/ https://www.kalzumeus.com/2014/11/07/doing-business-in-japan...

RappingBoomer 4y ago

oh, that's nice of them to "look into it". Just about all the other western nations either do taxes for the citizens or provide a free system for citizens... a neoliberal exploitation plantation, if you can keep it...

PaulDavisThe1st 4y ago

They've almost got a working system already. Free File Fillable Forms (alliteration intended?) has improved each year since it has existed. It has the downside that it looks like the paper forms, which is likely to be offputting to some. If they just finished it so that it (a) does 100% of the math for you (b) transfers 100% of the values between forms for you, it would be a system that could be used by anyone. That's not to say that a totally different UI approach (e.g. as used by Turbo Tax) would not be even better, but they absolutely do not need to "start from scratch"

kodah 4y ago
Free file fillable forms is run by Intuit and, iirc, is client side only.
- vlark 4y ago
  Free File Fillable Forms is owned by On-Line Taxes, Inc. of St. Joseph, Missouri, not Intuit. https://freefilefillableforms.com/home/privacy_security.php https://freefilefillableforms.com/home/privacy_security.php https://www.olt.com/main/home/leadership.asp https://www.olt.com/main/home/leadership.asp
  - kodah 4y ago
    Interesting. Internally we called it Quad F and I did some work on it. Looks like it changed hands at some point. Vox references our work here: https://www.vox.com/policy-and-politics/22596072/irs-turbotax-hr-block-free-file-tax-return https://www.vox.com/policy-and-politics/22596072/irs-turbota... > The timing is auspicious for such an endeavor. As you may know, if you make $72,000 or less, you’re eligible for a free return through the IRS Free File program, including software provided by Intuit, the company that operates TurboTax. If you make more, you’re eligible for Free File Fillable Forms, an Intuit product. If you open the actual forms (not the homepage) the asset links went through an Intuit CDN. I'm not sure if this is still the case. Even more oddly, the Vox article is from April 2022, so if it was sold or transferred it was recently.

exabrial 4y ago

I would just rather get rid of taxes. Sort of tired of paying for the 1%'s beach vacations.

kibwen 4y ago
Taxes don't pay for beach vacations of the 1%. At worst, they pay for the beach vacations of defense contractors and health insurance middlemen. The 1% pay for their beach vacations via record-high executive bonuses that are siphoned from the corporate profits that they refuse to share with their employees.
- exabrial 4y ago
  Not quite. Where do you think all of this "student loan forgiveness" money is going?
  - kibwen 4y ago
    Now I'm interested to see where this is going. The plutocracy do not tend to regularly take out student loans. Federal student loans, the one the federal government has the power to discharge, were paid out of the pockets of taxpayers, where it was then used to fund the beach vacations of university administrators, a decade or two ago. Meanwhile, in the present, the beneficiaries of loan forgiveness are the lower-middle class college-educated who were poor enough to need a loan, rich enough to consider college in the first place, and unlucky enough to not take the one major (computer science) that would allow them to pay back their loan in the modern economy. Say what you will about student loan forgiveness, but at no point is any facet of it an appreciable vector of plutocratic wealth concentration.

exabrial 4y ago

The real solution to taxes and filing is: Have the government send me a bill each month.

molsongolden 4y ago

One of the hurdles here is that the IRS has increasingly deputized tax preparers as their first line of enforcement via preparer penalties [1]. Another is that a free filing system with pre-populated returns shifts the information asymmetry involved in tax filing to be fully in the taxpayer's favor. Many people have an "I need to report everything because I don't know what the IRS knows" mindset. If the IRS populates a taxpayer's return with all the info they have, there's no incentive to report anything not listed. [1] https://www.irs.gov/payments/tax-preparer-penalties https://www.irs.gov/payments/tax-preparer-penalties

deleted 4y ago
[deleted]
jedberg 4y ago
You know you can log in and see what the IRS knows, right? They make that available to you in their portal. They post it after the tax deadline though, but you can go back and see what they knew about you in previous years (the forms they got, not what you filed).
- molsongolden 4y ago
  Yeah! Most info is available via transcript requests[1] but I don't believe most taxpayers know about this or bother checking what's in there. [1] https://www.irs.gov/individuals/get-transcript https://www.irs.gov/individuals/get-transcript
  - fswd 4y ago
    I've been waiting since 2016 for my transcript request..
- bombcar 4y ago
  You can know it for the current year, too, file for an extension and way overpay estimated tax (you can't be penalized if you overpaid). Wait until after file date but before extension date, and request all the transcripts.

ivolimmen 4y ago

Like we have for years (Netherlands). We used to have an application you could download to fill your returns. It could be downloaded for Windows, Mac and Linux. Now it is just a website and it is very elaborate. Most people can go through the wizard and click OK; everything is pre-filled. Only if in some cases you require to fill in extra's. Like selling your house and buying a new one makes the returns trickier. In those cases people often opt for letting the tax returns be done by a professional (well at least: I do).

kibwen 4y ago
Ah, but that wouldn't work here in the US because, of course, for one thing, what most people usually overlook is that, the first thing you have to remember is, it really is the case that,
suprjami 4y ago
We have the same situation here in Australia, except the old e-Tax app was Windows-only and was the only reason Linux and Mac users kept a Windows XP VM around to be booted up once a year to file a tax return. Yet another basic service that the "greatest country in the world" is missing that the rest of civilisation has had longer than iPhones.

supernova87a 4y ago

Isn't one of the legitimate barriers to an easy tax system that we have such a patchwork of non-communicating state governments and tax policies that for many people a pre-filled form would be badly missing info, or worse, missing out on credits people are due? Although, maybe no worse than it is now. It feels like the states treasuries/tax collectors barely talk to the IRS (oversimplifying of course). That and there are so many non-automatically-reportable exceptions (income doesn't have to be logged and calculated consistently and sent to the IRS), loopholes, deductions, etc. in tax law. Although, again, most of the population could be satisfied / correctly done with a baseline product. At least brokerage capital gains started being reported automatically (and mandatory) although I notice there are tons of errors than can crop up, as well as exceptions that break the system. Not saying I like the situation Intuit keeps us in, and we should automate as much as possible, but aren't there deeper reasons fueling their existence? We should fix those problems as well -- but I suppose that is asking Congress to pass or restrain themselves from mucking up the system every time they want to inject some favored loophole.

TulliusCicero 4y ago
The answer then is to at least pre-fill the information the government does know, because it was reported by banks/your employer/whoever else. Why do I have to enter in how much interest I made or stock sales or whatever when the relevant financial institution already reported this to the feds? The computer is less likely to screw it up than I am.

mrtweetyhack 4y ago

mattanimation 4y ago

IRS will look into not charging you more to use a service to be robbed. Got it.

ezekg 4y ago
Violently robbed, at that.

aaaaaaaaaaab 4y ago

Turbotax: *sweating intensifies*

metadat 4y ago

Archive link: https://archive.ph/TtmGY https://archive.ph/TtmGY https://web.archive.org/web/20220907130035/https://www.washingtonpost.com/us-policy/2022/09/07/irs-free-efile-biden/ https://web.archive.org/web/20220907130035/https://www.washi...

NaturalPhallacy 4y ago
I'd upvote you twice if I could for including archive.org. archive.ph is very hostile to VPN users.
- metadat 4y ago
  Good to know, I'll keep that in mind for the future. Cheers @NP.

bradgranath 4y ago

How 'bout they focus on fixing the one they already have (freefilefillableforms)?

jsmith45 4y ago
That one is actually third party, originally Intuit, now `On-LineTaxes, Inc`. The system that IRS was charged with creating would basically amount to this, and it might be that they simply buy the system and make it an offical IRS product. They already had sufficent control over FFFF to force Intuit to divest after Intuit exited the free file alliance. I unlike many people who seem to be hoping for basically ISR Turbotax or nicer, I really cannot see the IRS offing a more guided walkthough style system instead, since that is far more complicated than maintaining basically digital versions of the paper forms. In some areas TurboTax and the others get into more or less the business of offering tax advice, which may even be incorrect. Those businesses can afford to reimburse you if their wizards result in incorrect totals due to a misunderstanding. The IRS on the other hand would need to make sure that the wizards never accidentally misclassify anything, even for incredibly rare esoteric cases. This could be done by possibly asking many extra seemingly irreleavnt questions to rule out all these edge cases, or to dumb the whole system down making it closer to just electronic versions of the forms. The result the IRS would pick is pretty obvious, go with the simpler almost-identical to the paper forms options.

tomohawk 4y ago

Just repeal the 16th amendment - the income tax is too intrusive, and its too much of a temptation for politicians to use it for social engineering. There are other ways to tax that do not require the government to know everything about what everyone is doing.

uticus 4y ago
> its too much of a temptation for politicians to use it for social engineering Bullseye on the problem. This is the number one reason for the complexity. And the complexity is the number one reason for the massive resources required just to make the system work. However, the solution... repeal the 16th amendment? If my memory of high school history class serves, didn't trying alternatives lead to the 16th amendment? [edit] To provide some more focus: I'm not saying the politicians are the problem, but the carrot-and-stick social engineering.
jcranmer 4y ago
> Just repeal the 16th amendment - the income tax is too intrusive Fun fact: the 16th Amendment does not give Congress the power to levy taxes on income. Congress already had that power. What the 16th Amendment does is directly overturn SCOTUS's Pollock decision, which ruled that a tax on income derived from rent was effectively a tax on property and therefore a direct tax, which the Constitution requires to be apportioned to the states based on population. Even if you repealed the 16th Amendment, it's doubtful that modern SCOTUS would uphold the precedent of Pollock anyways (already shortly after the passage of the 16th Amendment, SCOTUS effectively overruled Pollock on the grounds that income taxes were indirect taxes anyways). This makes the 16th Amendment arguably the single most useless amendment to the US constitution.

methodical 4y ago

"look into" == probably not going to happen

Rackedup 4y ago

Free automatic filling system? yeah right... they are wanting people to forget credits and loopholes.

rconti 4y ago

One reason this has been difficult to get approve is that low-tax crusaders have been blocking it. However you want to frame that -- people who want no taxes at all, people who simply don't want taxes to go up more, whatever. Automatic income tax withholding was opposed for the reason reason(s). People who want taxes to be lower don't want the "pain" of taxes to be hidden. They want people to cringe every time they write a check for tens of thousands of their hard-earned dollars, not just have it magically spirited off to the government. Filling out taxes helps share some of the same pain. Every year, every tax filer thinks "man, taxes suck." This undoubtedly has at least some effect on voters' willingness to pay even more.

Spivak 4y ago
Which is fine, if you want the number to be front and center then do that, have the pain be in the sticker shock not the process of paying it.
- throwayyy479087 4y ago
  I agree - a better way to accomplish this aim is to have a free system, then send out a receipt to every filer saying "YOU PAID $133,349 IN TAXES" The IRS being the only org most people have to figure out what they owe money to is bizarre, especially given the penalties.
divbzero 4y ago
> People who want taxes to be lower don't want the "pain" of taxes to be hidden. They want people to cringe every time they write a check for tens of thousands of their hard-earned dollars, not just have it magically spirited off to the government. This argument against automated tax filing seems to make sense to me. But if it’s true, shouldn’t we have manual tax returns for vehicles, real estate, sales, and fuel?
- pclmulqdq 4y ago
  We actually do have these things in some places, although things like the gas tax and the sales tax are levied on stores, not individual consumers - they just pass the cost on to consumers. There is a tax analogous to a sales tax in most US states called a "consumption tax" or something similar, where you are asked to pay sales tax on stuff you bought outside of the state (and list the stuff). I have personally filled out real estate tax forms and car-related tax forms.

sydbarrett74 4y ago

perfectstorm 4y ago

They are going to look into it for $15 million dollars. Give that $15 million to a company like VMWare Tanzu Labs and they will deliver quality software which we can all use. That being said, i don't expect this to happen in the next 5-10yrs because of ~bribing~ err lobbying (because this is America). TurboTax and H&R Block are not going to let this happen.

ketralnis 4y ago

Free is great but with 143 million taxpayers a nominal $10 fee could make such a system self-funding

yosito 4y ago
Hey bro, heard you like tax, so we're taxing your tax so you can pay taxes while you pay taxes.
- Something1234 4y ago
  How is it any different than the private subsidy to intuit that exists now cause no one wants to figure it out?
  - oblio 4y ago
    Well, it's better, for one. Instead of the money potentially being used by the government, where on paper everyone is a shareholder. Now you pass that money to a company, where the beneficiaries are a restricted set of shareholders and top executives. Much better!
- askvictor 4y ago
  In Australia, you can claim a tax deduction for the costs incurred in managing your tax deductions.

bogomipz 4y ago

From the article: >"The Internal Revenue Service will spend $15 million studying a free, government-backed tax filing system under a provision in the sweeping climate and health-care law Congress passed this summer." Why does "studying a free filing system" require $15 million? >"Now lawmakers including Sens. Elizabeth Warren (D-Mass.) and Sherrod Brown (D-Ohio), who pushed for the IRS free-file study, say they hope the funding will encourage the agency to more vigorously pursue its own platform." This is the congress who had been cutting the IRS funding forever[1]. There's no way that the IRS can pursue its own platform without Congress loosening the purse strings. >"Sen. Ron Wyden (D-Ore.), chair of the chamber’s Finance Committee, asked the IRS to conduct a taxpayer opinion survey on an e-file system and consult a vendor to begin to build a government-backed platform." I think this answers my above question of why "studying a free filing system" requires $15 million. I'm guessing the "vendor" here is McKinsey or one of the other big 4 consulting firms. They will hoover most of the $15 million with the results of the study being "if you pay us, McKinsey, a hundred million dollars we can definitely build this for you." [1] https://www.propublica.org/article/how-the-irs-was-gutted https://www.propublica.org/article/how-the-irs-was-gutted

klyrs 4y ago

The passive phrase "will look into" fills me with dread. Old Seattleites will remember voting for a light rail system, only to watch friends of politicians get hired to "consult" on the project and piss away the entire budget in the consultation phase. Just do it!

divbzero 4y ago
I wondered about this too, how they’re budgeting $15 million to “look into” an e-filing system. With the right team of project, product, design, and engineering talent, couldn’t $15 million go a long ways towards building a working MVP, at least for simpler tax returns? But I’m sure that’s just wishful thinking in my naive developer mind…
- hackerlight 4y ago
  The Obamacare website cost billions. Governments struggle with tech. They tend to hire Accenture types who bullshit the clueless bureaucrats and siphon off the taxpayer's cash. It's not their money and they're not staked in the upside with bonuses and you can't get fired from public service, so why should they care? The incentives aren't there for performance. And even if they did care, they often don't have the competency to achieve it effectively and efficiently anyway. That's not to say we shouldn't try, though, other countries have figure out how to have a well run public efiling service, so it's possible.

ahoy 4y ago

"will look into" is code for will not do.

coryfklein 4y ago

I can't tell you how relieved I am to hear that the overworked and underfunded Internal Revenue Service is going to "look into this". Maybe my grandchildren some day will have a more pleasant experience filing their taxes.

dandigangi 4y ago

Slightly hard to believe almost because of Turbo Tax and others lobbying so hard to keep their business making hand over foot in cash.

RhysU 4y ago

We pay taxes wrong. A silly example shows this to be true. Suppose there's a planetary government and a solar government. Hear me out. Filing a local, state, federal, planetary, and solar return each year is stupid. The solar government shouldn't process trillions of returns. We should file local. Local should file state. State should file federal. Federal should file planetary. Planetary should file solar. Now take away planetary and solar. Clearly the way to traverse a tree is one level at a time.

baby 4y ago
That makes sense to me, states are basically tiny countries. You should pay taxes to the body that has your best interest, and that body is probably your city. Who has the city's best interest at heart? The state. And so on.
jrib 4y ago
Ha, I can just imagine what happens when the planetary government finds an error in an individuals taxes: Planetary: Uh, federal, please correct this issue. Federal: Uh, state, please correct... ...
- rsstack 4y ago
  The state should have ultimate responsibility once it accepts the return from a resident. If the federal runs an audit and finds a mistake it needs to "convince" the state to do better: actions through Congress, fines based on a narrow system, forced training, etc., or just eat the loss (or take the gain). In this model the federal government only deals with inter-state taxation and with collecting taxes from the state. The goal is to take away the responsibility AND authority from the federal IRS, to streamline the process. If the IRS remains responsible but just has the states "do a first draft", it's useless.
pclmulqdq 4y ago
My state and local governments have figured out the right way to do this. I pay property tax to the state, and income tax to the federal government. There's no overlap or issue. I used to live in NYC, and that was a kafkaesque nightmare in comparison.

standardUser 4y ago

This seems like a marginal improvement at best. If your taxes are at all complicated, this likely won't be sufficient and you'll still be paying professionals. If your taxes are fairly simple, you can already file for free without too much effort. I suppose there is an in-between group who may benefit from saving the $50-$200 for more advanced online self-filing. I've been that person many years in the past, but I could easily afford those fees. Better to have invested that $15 million in radical ways to simplify this entire insane(ly stupid) process.

hospitalJail 4y ago

My household spends 2 weekends per year on taxes. We own a few companies and would otherwise be spending time on those companies(or maybe our families). A streamlined tax system is worth 4 days per year. I imagine that in the future, it will take more time as our businesses grow.

deleted 4y ago
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rlewkov 4y ago

From the article: "The Internal Revenue Service will spend $15 million studying a free, government-backed tax filing system". It's a long way from studying to implementing. Intuit pays their lobbyists to make sure this doesn't happen.

deleted 4y ago

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formvoltron 4y ago

which will cost 300M and not work.

imchillyb 4y ago

If the system were setup with... -NO DEDUCTIONS WHATSOEVER!!! -Flat single digit percentage of gross wage. There would be no need for the entire Tax Preparation industry. Our government hasn't worked for: We The People in decades, they could have implemented this free-filing system at any time, and yet they have not. Our government doesn't work for us. They're not going to make paying or figuring out what's owed to them any easier for us. Why would they? If the feds make preparation and filing easy for us, we'll all get to see just how far the big red-white-and-blue dick is shoved up our collective asses. They sure wouldn't want that, now, would they?

bastard_op 4y ago

The stock price of Intuit dropped by like 10,000% with the sheer insinuation of such a thing occurring.

ryanSrich 4y ago

You could fix the tax system in a few easy steps: - Eliminate capital gains tax. Taxing capital gains is essentially blind theft, and there's a strong moral foundation to stop doing it. I believe the US would have greater economic prosperity by eliminating a capital gains tax. - Just tell people what they owe/what they are owed. You're the IRS, there's no reason why I should be telling YOU how much I made when you already know the answer. If I think you're wrong, I can prove that. - Stop auditing people who are making less than $5m/year in income. The amount of revenue recovered from smaller earners is negligible and resources that now go to the IRS to staff thousands of agents could be used a hell of a lot better.

fphhotchips 4y ago
> Eliminate capital gains tax. That's a terrible idea. Capital gains is basically the only way to tax the uber and intergenerationally wealthy. If anything, capital gains tax should be at the same level as income tax, so that there's less economic incentive to game the system.
- ryanSrich 4y ago
  > Capital gains is basically the only way to tax the uber and intergenerationally wealthy That's just simply not true. There are thousands of ways to tax the ultra wealthy. We just don't use any of them. Capital gains tax is a horrendous idea that mostly punishes the middle class for doing well in the stock market. The uber wealthy are feeling none of that pain. Find a different solution.
  - NaturalPhallacy 4y ago
    >Capital gains tax is a horrendous idea that mostly punishes the middle class for doing well in the stock market. That's simply not true. The top 1% own 50% of all stocks: https://finance.yahoo.com/news/the-richest-1-own-50-of-stocks-held-by-american-households-150758595.html https://finance.yahoo.com/news/the-richest-1-own-50-of-stock... The whole other 99% of the population share 50% of all stocks. Most of "middle class" own little to no significant amount of stocks. Also, if you must work, you're working class. The "middle class" is a propaganda term to keep the working class divided between those who feel like they're successful from those who are struggling. And speaking to the success of that propaganda: 22% of people think they're "middle class" and aren't: https://finance.yahoo.com/news/22-americans-mistakenly-think-middle-100600281.html https://finance.yahoo.com/news/22-americans-mistakenly-think...

sizzle 4y ago

how much is intuit pouring jnto lobbying against this win for American citizen

gwbas1c 4y ago

The single most frustrating thing about Turbo Tax is the data entry: I'm not an expert, and chances are I'll get something wrong. Now, the IRS has all the information to provide a pre-filled-out tax return. They even do it internally to check that I filed my taxes correctly! Can they legally provide it to me... NO! When I did have to deal with errors, I only knew because the IRS sent me a bill. (Someone sent an incorrect W2 to the IRS.) I never had the opportunity to correct the error before I submitted my taxes. It would be so much easier if TurboTax could hook into an API that downloaded my tax return and then I could check it for errors. I'm sure they'll figure out some kind of upsell that makes it "worth it" for me to pay them $100 as opposed to using the IRS's version.

psd1 4y ago
I don't love the UK online return, but it's a solid app and it's free to use. Libertarianism is like communism; it may seem great in theory but devolves into oligarchy in practice.

smm11 4y ago

Only in the US would there be a system where you have to pay money to pay taxes.

fundad 4y ago

bumblebritches5 4y ago

elicash 4y ago

If people think the problem here is simply lobbying by a few companies, you are WAY underestimating the problem. This is not as simple as building a website. There's an entire, incredibly outdated system that needs to be rebuilt and totally reimagined from the ground up. https://www.washingtonpost.com/opinions/interactive/2022/irs-pipeline-tax-return-delays/ https://www.washingtonpost.com/opinions/interactive/2022/irs...

askvictor 4y ago
Then how do Intuit et al do electronic filing?
- elicash 4y ago
  What people in this thread are suggesting isn't recreating Turbotax, it's something that takes the data they already have and giving it to the user to simply confirm and say "yeah that's good."

TheChetu 4y ago

As a tax preparer I have been hoping the previous attempts to make a system would prevail. Intuit and other companies have been blocking these things for a very long time because they mislead people into paying for their e-file instead of allowing people to use the proper IRS free e-file they are required to offer by law. This would reduce some of my business but also free up time for the people that actually need preparation services such as people who have a lot of deductions, businesses, rental properties, etc. My overall business would only change minimally but the cheats at Intuit, etc. would lose a lot of money in comparison because they wouldn't be able to charge money for a free offered service that is hidden as well as they can get away with.

shrimpx 4y ago

$15 million to “study”. Doesn’t sound like anything salient but maybe a step forward.

eric4smith 4y ago

Hahahaha... everyone know what when someone says "I will look into it", it means there will be absolutely no action taken. hahahahahahahahaha

mugivarra69 4y ago

look into = 5y+ ETA

qwezxcrty 4y ago

Even the evil Chinese government do better in this.. For the majority of people, the tax deduction is just in your income, and you have a (although questionable in privacy) mobile app if you are getting tax return or need to file for other off-the-book incomes.

esbranson 4y ago

§ 10301(1)(B) (B) Task force to design an irs-run free “direct efile” tax return system.—For necessary expenses of the Internal Revenue Service to deliver to Congress, within nine months following the date of the enactment of this Act, a report on (I) the cost (including options for differential coverage based on taxpayer adjusted gross income and return complexity) of developing and running a free direct efile tax return system, including costs to build and administer each release, with a focus on multi-lingual and mobile-friendly features and safeguards for taxpayer data; (II) taxpayer opinions, expectations, and level of trust, based on surveys, for such a free direct efile system; and (III) the opinions of an independent third-party on the overall feasibility, approach, schedule, cost, organizational design, and Internal Revenue Service capacity to deliver such a direct efile tax return system, $15,000,000, to remain available until September 30, 2023: Provided, That these amounts shall be in addition to amounts otherwise available for such purposes. https://govinfo.gov/link/bills/117/hr/5376?billversion=enr&link-type=uslm#d1358e1657 https://govinfo.gov/link/bills/117/hr/5376?billversion=enr&l...