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Lobbyists begin chipping away at Biden’s $80B IRS overhaul
- Flatcircle 4y agothis would be amazing and easy to introduce. Please figure it out! Everybody wants it.
- deleted 4y ago[deleted]
- MuffinFlavored 4y agoI'm surprised there's no way to generate the "Form 1040, U.S. Individual Income Tax Return" from JSON. I have the same ~10 forms to enter every year. The IRS already knows how to import W2s based on SSN, right? There's some kind of data connectivity between employers/HR/payroll systems and the IRS database of somesort. Why can't this be expanded to the top 10 most popular forms so that all of the forms that get sent to both me and the IRS are pre-populated yearly for me? 5498 - retirement contribution 1095-C - health insurance 1099-B - investing 1099-DIV - investing 1099-INT - investing 1099-K - payment processor 1099-MISC - investing 1099-NEC - contractor income 1099-R - retirement/rollover stuff W2 - employer income
- fauxpause_ 4y agoBecause of the TurboTax lobbying
- cameron_b 4y agoAnd others, but chiefly this. This is not a technical constraint, it's a lobbying-fueled legal, policy and political constraint. We're keenly behind the ball as technicians on this one.
- jimt1234 4y agoI'm gonna respectfully disagree. Sort of. Does Turbotax and H&R Block lobby to protect their businesses? Yes, of course. However, that lobbying is basically meaningless compared to the political pressure from the real beneficiaries of the current US tax system: the wealthy and big corporations who spend, say, $5-million on tax attorneys in order to save $50-million in taxes. That's who ultimately created the US tax system, that's who stands to lose the most from reform, and that's who's gonna work to protect the status quo.
- ryan_lane 4y agoThose are two disconnected things. Turbotax and H&R Block lobbying to stop the IRS from having an auto-file system protects them, and doesn't change anything for the wealthy and big corporations who will continue to pay accountants to dodge taxes.
- refurb 4y agoYou could, but the data can be a mess and often needs interpretation. I wouldn't trust the numbers to be pulled directly. 1099-K - you could easily be sent a 1099-k that includes money that shouldn't be included in your return 1099-B - it's not unusual for cost-basis to not be included, so you need to calculate a bunch of numbers from your 1099-B before entering into your tax return 1099-R - depending on the distribution you took, it may be taxed or not taxed depending on other information not included in the form I mean, it would save you the trouble of entering the numbers, but it doesn't solve the problem that there is a good chance the numbers aren't correct.
- jjnoakes 4y agoA huge majority of folks wouldn't need to bother, and the rest could make changes if they are needed.
- refurb 4y agoI highly doubt it since the 1099-K reporting for any payment platform transfer over $600 is only delayed. That's going to impact a lot of people.
- brewdad 4y agoI've met one person in my entire life that has to deal with a 1099-K. I've met a lot of people and have been around for a handful of decades.
- refurb 4y agoYou realize they changed the rules this year, but delayed implementation? The threshold used to be $20,000/200 transactions, but it's going to $600 for even a single transaction. Your friend sends you $1000 for a shared vacation? That's a 1099-k. Your roommates send you $1000 as their share of the rent? That's a 1099-k. Sell your car for $5,000? That's a 1099-k. None of those are actually taxable, so you need to sift through the 1099-Ks you receive to see which ones need to be reported and which ones don't.
- misssocrates 4y agoThat's not everything. They want everything and want you to think they have everything so you provide everything.
- lxgr 4y agoIt's not exactly a secret what they get in terms of automated reporting from employers and financial institutions, though. Why do I have to mail them, on paper no less, the same forms all over again?
- knodi123 4y ago> Why do I have to mail them, on paper no less, the same forms all over again? I mean, you don't.... I haven't mailed a piece of paper to the IRS in about a decade.
- lxgr 4y agoAre you talking about e-filing? For some reason, I don‘t seem to qualify – so it‘s off to the post office for me.
- knodi123 4y agoWeird, I thought everyone qualified, although I've certainly never looked into it. Sorry! It's definitely a stupid system, no matter how you slice it.
- SilasX 4y agoYou might be thinking about filing directly on the IRS site, which has an income threshold? There are free filing services, like FreeTaxUSA that I use.
- meghan_rain 4y agoarchive link?
- sgammon 4y agowe love to see it
- orangepurple 4y agoI suspect it may actually come to fruition this time because the IRS is so understaffed they want every efficiency measure they can get to audit people with money and skip the rest of the riff raff.
- BuyMyBitcoins 4y ago>”they can get to audit people with money and skip the rest of the riff raff.” The IRS has no qualms with auditing people of average wealth. Each year they invest a substantial amount of time and effort going after waiters and other staff that work for tips. The rich usually have the money to defend themselves rigorously, whereas middle class folks tend to end up just paying the fines and the amount the IRS claims they actually owe.
- masklinn 4y agoThat’s very much because the IRS doesn’t have the funds for complex legal action.
- mike_d 4y agoIRS collection agents already have the power to seize assets without a court. Letting them rack up legal bills too wouldn't generate a positive ROI.
- pavlov 4y agoAre you suggesting they should completely give up auditing middle-income taxpayers? That feels like demanding the police should stop all road traffic monitoring because it targets regular people who are just trying to get somewhere by car. If the law isn’t enforced for a particular group, it doesn’t exist for them. But completely even and fair enforcement is an ideal that’s usually impossible to reach — the traffic cops only catch a small minority of speeders and drunk drivers.
- cultureswitch 4y agoThe analogy doesn't really work though. Deliberately investing less IRS money into checking low capital individuals doesn't actually cause damage if it means there's more high net accounts being investigated. There's tax waste in the system no matter what you do. The question is where it is preferable for this waste to occur. It is vastly preferable for the whole economy that the people who are most likely to get away with fraud are also the ones with the lowest net wealth.
- ms512 4y agohttps://archive.is/OU8vc https://archive.is/OU8vc
- GenericDev 4y agoCall me Spider-Man, because "I missed the part where that's my problem" [1] 1: https://www.youtube.com/watch?v=iCAaBWmKTDg https://www.youtube.com/watch?v=iCAaBWmKTDg
- grecy 4y agoAnd this is the biggest problem with our modern societies. Even when a change to the status quo will clearly make life better and more affordable for the masses, there is enormous push-back and billions of dollars are spent to prevent it. In that way the biggest and most powerful systems in our societies are not even working to make life (and the world?) better for everyone, they just want to keep their massive wealth and power. The same problem prevents many things getting better - healthcare, higher education, pollution, public transport, etc. etc.
- nielsbot 4y agoNot billions, but enough. Politicians are bought cheaply. What a great return on your lobbying investment! BTW--Someone pointed out that the 'bribery' also takes the form of "If you don't support our effort we'll fund your opponent's campaign and he/she will play ball!"
- cultureswitch 4y agoYou say modern societies, but historically this used to be vastly, vastly worse. Serfdom used to be a thing (still is in some parts), slavery too, to give only the most obvious examples. These were staunchly defended by special interests who put a large fraction of their country's resources into maintaining the state of affairs.
- nielsbot 4y ago"...lobbyists representing tax preparers who fear that the agency’s growing power will cripple their businesses and infringe upon taxpayer privacy." Taxpayer privacy? Ridiculous complaint coming from them. It will be a win for Americans if the tax prep industry is relegated to voluntary-use only. Even better: let the IRS prepare your taxes for you. Accept their filing or file your own (optional) return.
- 8f2ab37a-ed6c 4y agoIn before they claim they're doing it to protect the children.
- dietr1ch 4y agobut think of the children!
- lb1lf 4y ago>> Even better: let the IRS prepare your taxes for you. Accept their filing or file your own (optional) return. That's the way it has been done in Norway (and probably a host of other countries) in later years. I received my tax return for review a few days ago; all income, debt, possessions of note, deductions for kids, tax deductable gifts &c were already filled in; after a few minutes comparing key numbers to my files, I simply clicked 'Submit', and that was that.
- BigCryo 4y agoI like the GOP plan to end the income tax and defund the IRS and replace it all with a consumption tax
- foota 4y agoThe only place where left advocates and the tax prep industry see eye to eye is that there should be incomes taxes
- Radle 4y agoConsumption taxes hit low income people the hardest and also reduce consumption. What you are suggesting is the biggest redestribution of wealth in US history, putting a lot more money into the super riches pockets. It might also severly damage the US economy.
- BigCryo 4y agoYeah we cannot damage our sacred economy
- pessimizer 4y agoWhy would we change it to make the rich richer and the poor poorer?
- knodi123 4y ago?? Are you suggesting we should damage the economy? Or that we should be cavalier about risking it?
- BigCryo 4y agoUh huh
- globalreset 4y agoThat's why the plan includes sending a check / refund to every person, to offset the "tax free income amount", IIRC. Also - rich people don't really pay income and capital taxes because they have ways to avoid them altogether. (All these "charity funds" they make are just tax avoidance schemes). Sales tax instead of income tax would be a huge time saver, and effectively work exactly like an income tax, without all the waste. "Taxing the rich" could be achieved via other means if desired. Some wealth tax (let's say over 100M of net worth, .5%/year or something like that).
- iambateman 4y agoI hope the tax prep industry is scared out of their minds… Asking citizens to pay their fair share of taxes should not include them spending a day or two every year trying to find a piece of paper to mail to an agency which _already has that piece of paper_ and is categorically more equipped to process it.
- conanbatt 4y ago[flagged]
- DangitBobby 4y agoWhat liberty are we protecting here, exactly?
- klyrs 4y agoLiberty to forget the "without representation" part of that rallying cry, apparently.
- knodi123 4y agoWell that's a bigoted attitude. As long as we acknowledge that taxes are necessary for the functioning of a country, I'd rather our tax agency be calm, professional, and boring.
- lxgr 4y agoAmazing! I know it's unlikely, but I want to believe that this is at least partially MSCHF's doing (with Tax Heaven 3000, the – to my knowledge only – dating sim that can do your federal income taxes [1]). [1] https://taxheaven3000.com/ https://taxheaven3000.com/
- swader999 4y agoWriting is on the wall kids. TaxGPT...
- yieldcrv 4y agoAs someone that would love to be able to file complex tax returns more easily, bring it on! partnerships part owned by LLCs, trusts, personally, through S-corps, etc. I'm able to walk a CPA through it, and can do it myself with Turbotax. But free would definitely be better.
- swader999 4y agoYep, here's the tax code, here's the forms, here's my scanned box of receipts and bank statements. Figure it out. Oh, and while you're at it, take a little license and get creative please, I still need to get my kids through trade school before you evolve and make that work obsolete too.
- mmmpetrichor 4y agoI still enjoy the one liner that's probably generations old at this point. "America: We have the best democracy money can buy". At 40, reading many comments feels like watching a younger generation notice the same things I did. I'm glad the current administration at least seems to have it's heart in the right place, but I'm pretty jaded and don't think that we'll see big changes any time soon. I'd be happy to be pleasantly surprised, though!
- flexie 4y agoI think we've had online tax-filing for perhaps 15-20 years here in Denmark. We log in with our digital signatures, report what income has not already been reported by employer and bank, and claim the deductions that have not already been granted automatically. I won't say it's that easy, and often the system can't be accessed on the day they open up for filing last year's taxes, but at least it's not pen and paper anymore.
- neonate 4y agohttps://archive.ph/OU8vc https://archive.ph/OU8vc
- dang 4y agoRelated; others? Intuit pouring money into lobbying amid push for free government-run tax filing - https://news.ycombinator.com/item?id=34840039 https://news.ycombinator.com/item?id=34840039 - Feb 2023 (178 comments) IRS builds task force to explore running its own free e-file system - https://news.ycombinator.com/item?id=34764952 https://news.ycombinator.com/item?id=34764952 - Feb 2023 (201 comments) IRS Free File: Do Your Taxes for Free - https://news.ycombinator.com/item?id=34462122 https://news.ycombinator.com/item?id=34462122 - Jan 2023 (247 comments) IRS will look into setting up a free e-filing system - https://news.ycombinator.com/item?id=32753099 https://news.ycombinator.com/item?id=32753099 - Sept 2022 (408 comments) The IRS could be on the verge of changing the way Americans file their taxes - https://news.ycombinator.com/item?id=32550841 https://news.ycombinator.com/item?id=32550841 - Aug 2022 (17 comments) IRS will study free tax filing options - https://news.ycombinator.com/item?id=32502321 https://news.ycombinator.com/item?id=32502321 - Aug 2022 (25 comments) Why do Americans have to pay much to file their tax returns when the IRS knows? - https://news.ycombinator.com/item?id=30267361 https://news.ycombinator.com/item?id=30267361 - Feb 2022 (22 comments) The IRS has a big opportunity to fix the way Americans file taxes - https://news.ycombinator.com/item?id=28177289 https://news.ycombinator.com/item?id=28177289 - Aug 2021 (12 comments) Lots more, for those who want pain: https://news.ycombinator.com/item?id=34840480 https://news.ycombinator.com/item?id=34840480
- kodah 4y agoI'm not even sure why. Even if the IRS prepared an "initial statement" for you given what they have more than half of the US would (still) have to hire someone to come in and fix everything. I did an IRA backdoor this year and accidentally overcontributed my 401k, my previous years state taxes also contained an error that had to be rectified; my taxes were an absolute mess. Who tax prep should be worried about is people who want taxes to just be a bill with no exemptions or write-offs. They usually fly that flag under "simplify the tax code".
- djur 4y agoAlmost 90% of Americans use the standard deduction rather than itemizing. The vast majority of those could have their tax statements automatically prepared.
- stoolpigeon 4y agoThat seemed really low to me - I've itemized pretty much whenever I've had a mortgage. So I've always assumed for most people with a mortgage it would make sense. Looking here it seems you're pretty much right - https://taxfoundation.org/standard-deduction-itemized-deductions-current-law-2019/ https://taxfoundation.org/standard-deduction-itemized-deduct...
- kodah 4y agoThat is interesting. I didn't know the "simplify taxes" people won. This is why you can't write off moving expenses, etc... No wonder taxes have been so high.
- djur 4y agoTCJA of 2017 (the big Trump-era tax bill) reduced or eliminated a lot of deductions (personal exemption, mortgage interest, SALT, and a bunch of little ones like moving expenses) in exchange for doubling the standard deduction and child tax credit.
- davidkuennen 4y agoIt's interesting to see that taxes are such a big deal in the US. I did my taxes in Germany in 10 Minutes a few weeks ago while sitting in the waiting area of our local tax office. Granted I'm just a default working class citizen without anything "special". It gets more complicated if you have some sort of other income. Not for stock investments though, because that's handled entirely by our brokers. Nothing to do there.
- oaiey 4y agoIn Germany we have a tax software from the government. It is called Elster, like a bird. A stealing bird. A rare moment of humor by the state.
- davidkuennen 4y agoOh wow that never occurred to me (from Germany as well). Gave me a chuckle.
- flooow 4y agoFor non-Germans - the Elster is the magpie. According to Wikipedia, in German folklore the magpie is a thief. As a Brit I do not associate the magpie with stealing per se but rather with having a fascination with shiny objects like jewellery - which also sort-of works, for the joke.
- cultureswitch 4y agoIn French speaking traditions the magpie is also a thief. To me magpies are literally thieves. They take shiny objects which are sometimes valuable. I've heard more than one story of people who lost jewelry to magpies. Of course, even though they are territorial it isn't obvious that magpies understand that they are stealing. But their intention doesn't change the result.
- kepler1 4y agoSometimes I am grateful that our country is so large and prosperous that it can afford to have industries that exist like minor parasites on the government and the people, sucking just enough for their sustenance off the inconvenience of everyone, and they put up enough of a fight that people accept it. Because in some other country that wasn't so well off, these entities (and other countless other interests) might be enough to push the country over the edge into [outright inefficient | corruption | drag on economic growth] territory and people would be rightfully indignant at middlemen skimming off people's inconvenience to enrich themselves. Maybe it's also the curse of having had such a long and stable history that enabled legacy interests and systems to arise, where eventually you need another country to show you what's possible when you start from scratch for you to realize that the way you're doing something is just stupid.
- somenameforme 4y agoI think this is more or less the exact tale of every single empire's rise and fall throughout history. Each emerging nation, and inevitably "empire", learns from the mistakes of those existing at the time and is able to make rapid progress as a result. But over time they begin to rest on their laurels, grow fat, and start falling into the exact traps that they previously fought against (often literally) and overcame, only to then eventually be overcome by the next great power. The big change in modern times is nuclear weapons. The passing the torch is rarely a pleasant affair. Add nuclear weapons paired alongside the poor/myopic leadership inevitably present in times of decline, and you end up in uncharted waters with a storm on the horizon.
- supernova87a 4y ago> “A direct-to-I.R.S. e-file system is a solution in search of a problem,” said Tania Mercado, a spokeswoman for Intuit. “And that solution will cost taxpayers billions of dollars.” Funny, I think she has conveniently recast "the problem" as whether to replace the commercial tax filing industry with something that might be free to the taxpayer. Because yes they doing just fine, thank you, paying us for that convenience, so there is no problem if you look at it that way. But if the problem is helping people file their taxes easier, then clearly Intuit didn't think that that was a solution in search of a problem, for them to build a whole industry around it... Funny how entrenched interests will go to great lengths to redefine and recast what the fundamental goal of the government should be. And usually that recasting is some kind of distraction away from the question whether the government should serve the people, or serve specific entrenched interests.
- encryptluks2 4y ago[dead]
- reustle 4y agoShe previously worked as a Congressional Intern in DC, and as a Press Aide at the California Department of Justice under Kamala Harris (later a Press Secretary)
- wildrhythms 4y agoHence the term 'Revolving Door' https://en.wikipedia.org/wiki/Revolving_door_(politics)# https://en.wikipedia.org/wiki/Revolving_door_(politics)#
- dguest 4y agoEveryone is falling for tax-prep propaganda by even implying that this is a new service. The IRS already prepares your taxes for you. There is simply no way around this: they have to prepare them to check the numbers they get from personal filings (or from Intuit etc). The additional service is the one that compares the forms people send against the form the IRS already has, and then has to follow up on every minor discrepancy. So the direct-to-I.R.S. proposal isn't adding anything new to big government: it's eliminating an utterly pointless literal box ticking service they currently provide for free, at the expense of tax payers, and for the benefit of Intuit and pals. If you think filing taxes is annoying, imagine working at the IRS with this system.
- janalsncm 4y agoEven if the tax code didn’t change at all and we still filed our taxes the same way I would support this. A couple of years ago I had to mail my taxes in. It took them over a year for them to process them. During that time the government owed me over $5000 which may no seem like a lot but I was a poor student. (They sent me a check for a whole $50 in interest.) There are apparently millions of other tax returns in the backlog. Those returns often represent people like me whose money was locked up. I was fortunate that it didn’t cause me true financial hardship but I’m sure others weren’t so lucky.
- tenuousemphasis 4y agoHow on earth did the government owe you a $5,000 tax return as a poor student?
- whoopdedo 4y agoThe tax code is full of subsidies in the form of "credits". Some are non-refundable, so it only applies up to the amount of taxes you owe. But many are refundable so it can send your tax bill into the negative. That is, a refund. It's a convoluted form of social welfare in all but name.
- janalsncm 4y agoBecause before I was a poor student I was a well-paid software engineer. Not as well-paid as I would’ve liked (and not well-paid enough to buy a degree in cash), but enough to have taxes withheld from my paycheck. The money they owed me was mostly that withheld cash.
- supernova87a 4y agoAnd maybe this is politically naive, but you would think that whoever is in power and in charge of running the government, they would want to properly fund the very entity responsible for bringing in the funds that allow them to do what they want to do. If for example, each person you hire to the IRS can bring in 100x (or more?) the cost of having them on the payroll, wouldn't that be a no-brainer? But as I understand it, some people are more interested in crippling the functions of the government to make it easier to dismantle its functions. Maybe the goal of having our government be effective and useful (the long and hard won effort of building the institutions we have) has fallen by the wayside to having it be used as a pawn in stupid power games.
- lyu07282 4y ago"What they want to do"? The idea that someone like Pete Buttigieg for example actually cares about the railroad or airplanes or something as the Transport Secretary does sound completely absurd to me, that thought never even crossed my mind. In this case fixing it would mean this industry would cease to exist, so obviously this is never actually going to be fixed. Don't the people know that politicians have a fiduciary responsibility towards the shareholders of TurboTax?
- mike_d 4y ago> If for example, each person you hire to the IRS can bring in 100x (or more?) the cost of having them on the payroll, wouldn't that be a no-brainer? IRS audits and enforcement disproportionately target small business owners and lower middle class. People that have just enough money that it is worth trying to shake them down, but not enough that they can afford to fight it. The average is about $5 returned for $1 spent on enforcement, but that is a finite pool - the sweet spot I mentioned above. Throwing more money at enforcement would just end up lowering the recovery ratio. We are better off just scrapping the whole enforcement branch and putting that money into extending proactive capture (collect taxes on money before people receive it) and making filing easier to increase compliance.
- ryandrake 4y agoIt would be great to have a free, IRS-provided alternative to the various for-profit softwares out there. One that’s not hidden behind dark patterns desperately funneling you towards the paid product. But the proposed solutions always seem to be geared towards the simplest returns (admittedly fine for 90% of taxpayers). Please don’t leave taxpayers like me out in the cold! My federal return was over 15 pages this year, and gets more complex every year. We hate Intuit, too…trust me!
- mike_d 4y ago> It would be great to have a free, IRS-provided alternative to the various for-profit softwares out there. See, you've fallen for the trap too. The IRS already prepares your return for you based on all the information they have, they just won't show it to you. Instead you have to use third party software to prepare basically the exact same document and then you can risk fines or jail if yours is different. Just send us a tax bill in the mail.
- dguest 4y agoHave you heard of people paying fines for getting their taxes slightly wrong? I know people who spend 5 minutes filling out the form with rough adjusted guesses based on the previous year, send it in, and thus trigger the IRS sending the corrected version. They will charge you extra [edit: I meant "the amount you owe"] if you underestimate, but this is hardly a fine.
- mike_d 4y ago"Charge you extra" is in fact the definition of a fine. :) If you are off by more than 10% or $5000 you have to pay 120% of the under payment plus interest from your filing date. If you overpay you just get a letter and a check with no interest.
- dguest 4y agoYeah that was badly phrased. I meant the amount you owe, but you answered my question. I guess it's worth doing the math to figure out when your guesstimate becomes more expensive than a tax prep service.
- clarkrinker 4y agoIn my normal naiveté I thought "why don't we just buy Intuit" Intuit market cap is $137bn. Greater than GE.
- altacc 4y agoAh, lobbying, the democratic practice of one dollar, one vote.
- jamestimmins 4y agoSeems the much bigger threat for Intuit is ChatGPT-like tools. Understanding confusing manuals or rules and then explaining them is exactly what it does best. I'd be very surprised if in two years we aren't all using AI for our taxes as a matter of routine.
- xivzgrev 4y agoLol - that is way too ambitious, so you will likely be very surprised Tax filing is the hardest thing to get people to switch. Costs are relatively low but penalties are high. Plus no one wants to short change their refund AI right is now is unpredictably inaccurate, certainly not enough for tax filing. I think that will take more time than we think to iron out. But let’s assume it’s perfectly accurate. You still need all the software to support actual filing - accepting forms, validating the input, etc. and that all costs money. We may see some AI startups to help you do your taxes very soon, but I imagine they will secretly have humans on back end for now to help validate
- jamestimmins 4y agoI suspect that whenever it happens it will involve human validation or adversarial AI systems to validate the result from another one. I hope I'm right!
- tsuujin 4y agoI very much want this to happen. Tax code is intentionally made more difficult by tax-prep lobbyists who want to ensure that doing it without them is impossibly difficult. With a free solution direct from the IRS, there is no incentive to keep the system complicated and maybe we all benefit. I imagine that the rich will fight tooth and nail against simplicity though. Part of the complexity is around the loopholes which keep companies and the very wealthy from actually paying their fair share. A simple, straightforward tax code would cost them a huge amount of money… more than just buying off politicians.
- mrtweetyhack 4y ago[dead]
- m463 4y agowhat's more interesting is that people thought Ron Paul was a little crazy when he spoke about abolishing personal income tax, though it was completely possible (and in fact personal income taxes have been a relatively new concept)
- coryfklein 4y agoIf the government wants a tax code complicated enough to require professional services to comply with it, then it is on them to provide those professional services. End of story. Unless the government is going to simplify the tax code (hint, they're not) then they must provide the services necessary for me to comply with it.