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> 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
by coryfklein 4y ago
> 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
I'd be interested to hear that I'm wrong, but I believe this is not true. The IRS almost certainly does not calculate on their end what your taxes should be, but rather uses some much cheaper heuristic which they compare to your return and if it's "close enough" then the amount they stand to recover from auditing you is less than the cost to audit, and the IRS simply accepts the difference.
- dguest 4y agoMy experience with TurboTax was that in two subsequent runs on the same tax year the refund I got would vary by 20-50% (I had to start over at one point). I didn't dig in: and the reason I was using TurboTax is that I didn't care. So I'll take the IRS heuristic: better than the Intuit heuristic.
- coryfklein 4y agoYour experience does shed light on TurboTax, but how does it give us any insight into the IRS heuristic?
- runako 4y agoExactly this. In particular, the IRS does not/likely does not have knowledge of a range of taxable income that we are bound to self-report: sales of goods and property, cash tips or payments, small consulting projects, rent you earned renting out a room, etc. The deductions side is even more opaque to the IRS, for example they have no idea how far you commuted to your job, or that you cared for a sick parent, or that you made tax-saving energy-saving improvements to your home. The system is essentially an honor system with a barb for those who get caught cheating.