6 ms·

IRS launches paperless processing initiative

133 points by xdfg13345 3y ago

kasperni 3y ago
Welcome to 21st century. Sincerely, the rest of the developed world. I hope TurboTax and friends doesn't manage to screw this one up.
- y-curious 3y ago
  They must be pissed that their ROI for their lobbying money is so low. Fingers crossed!
- deprecative 3y ago
  Given this doesn't interfere with their business I don't see why they would.
toomuchtodo 3y ago
Big thanks to y'all at the IRS and US Digital Service who are working on this.
SilasX 3y ago
>Taxpayers will be able to digitally submit all correspondence, non-tax forms, and responses to notices; Nice! I had to reply to a notice last year, and fortunately, I was able to respond to it "digitally", but only via a workaround: since one accepted medium is fax, I used an e-fax service to send the response.[1] It definitely felt like there had to be a better way. [1] Shout-out to faxrocket, featured on HN: https://news.ycombinator.com/item?id=15484390 https://news.ycombinator.com/item?id=15484390
- lotsofpulp 3y ago
  Maybe they just got funding for email? I think it is intentional that governments, especially bigger ones like state and federal, make on the record communication with them more difficult. I have called government offices many times only to receive a message that says “call back the next business day”..at 10AM. No way to submit an email, or even a simple call back function. No, you have to spend hours of your time trying to reach them, and the only way this makes sense is if they want to make some people give up. The only advice for this is to contact a politician and hope they take up your personal cause. Basically, what you would expect in a poor, developing country, except there, at least it is known how much you need to bribe someone to get service.
forgotusername6 3y ago
The UK has had online tax returns since 2001. It always amazes me how many things in the US still use paper.
- PopAlongKid 3y ago
  The article is primarily about processing documents other than actual income tax returns. Does the U.K. have a completely digital (paperless) way of communicating with taxpayers and resolving issues after the tax return is filed? The U.S. has had "online tax returns" (e-file) since the 1990s. Paid tax preparers are mandated to efile, it is only the minority of DIY taxpayers who insist on paper filing their income tax returns.
  - callalex 3y ago
    >it is only the minority of DIY taxpayers who insist on paper filing their income tax returns This is a gross misrepresentation of the situation. Being forced to chop down and bleach trees if you don’t want to pay a bribe to a rent seeking company that lobbies directly against your interests is not “insisting on paper filing” at all.
    - PopAlongKid 3y ago
      So you are claiming that not wanting to do one thing means you are forced to do some other thing? It is a choice, nothing is "forced". More importantly, you don't have to "pay a bribe to a rent-seeking company" (talk about gross misrepresentation!), the IRS offers free online filing to everyone (and I'm not talking about the "Free file alliance" with tax software vendors, but a direct service from the IRS). https://www.irs.gov/e-file-providers/free-file-fillable-forms https://www.irs.gov/e-file-providers/free-file-fillable-form...
      - callalex 3y ago
        The whole point of this discussion introduced by the article linked at the top of the page is that electronic communication is only available to the general public for initial filing.
gordon_freeman 3y ago
will this allow me to digitally file my amended federal taxes? That's the one thing that I was looking forward to when I started reading this and possible may impact most taxpayers but looks like IRS still needs amended tax returns in a paper form being mailed out to them?
- SparkyMcUnicorn 3y ago
  > This includes amendments to Forms 940, 941, and 941SSPR, which are some of the most common forms taxpayers file when amending returns.
- PopAlongKid 3y ago
  Filing amended returns electronically with the IRS (efile) has been available for several years. The ability to catch up with unfiled prior year returns by efiling has been available for even longer. (IOW, you can efile your unfiled 2021 tax return in 2023).
PopAlongKid 3y ago
This announcement is not about the IRS pre-filling income tax returns, a topic that is discussed regularly on HN. This is about handling all the other activities surrounding tax filing, such as getting copies of 3rd-party information returns (W-2s, 1099-Rs, etc), receiving and responding to notices regarding errors or questions in the previously filed tax return, etc. California FTB (tax agency) set up an online system for taxpayers starting five or more years ago, with continuing enhancements since then. IRS is just now catching up, by providing the ability for a taxpayer (or tax practitioner with permission) to create a secure login account with access to their personal information.
siruncledrew 3y ago
Finally, at least it's promising that the process looks to be less bad
efitz 3y ago
How about this: let’s go to a single flat rate for everyone and everything (say 20%) and eliminate all deductions except for a standard deduction (say whatever is the poverty line, eg $25000 or so). This would be for corporations and individuals. Now your taxes can be filed on a postcard. And the IRS can preprint it and send it to you, with an online code or something to click “ok” on a web site and be done. The government uses the tax code like a Swiss Army knife, trying to reward friends, punish enemies, encourage and discourage behaviors, etc. As a result we collectively spend millions of person hours and untold $$$ paying accountants to find and exploit loopholes and try and avoid undue attention. Let’s just stop.
- Nexxius 3y ago
  Or how about the fed gets its money from the states and the states figure out taxes.
- halestock 3y ago
  Sounds great, except a flat tax rate is extremely regressive so you either tank the amount of tax revenue the government collects, or you punish low income earners far more than wealthy individuals.
  - efitz 3y ago
    The regressive aspect of it is offset by the large standard deduction.
    - halestock 3y ago
      That still won't solve the issue. The reason for progressive taxation is that there simply isn't a tax rate that allows you to both sufficiently fund the government and doesn't punish low income earners. The gulf between what the lowest and highest earners make is simply so vast that you can't do it without progressive taxation.
      - efitz 3y ago
abhayhegde 3y ago
This would be a godsend! I'm not sure of its applicability to non-resident aliens yet, but having to mail the documents has been a really slow process. They don't open them even after two months of receiving them, and then take another few weeks to process. Going digital would at least alleviate the fears of having submitted the returns on time, since otherwise IRS doesn't acknowledge them receiving on/before time.
supportengineer 3y ago
Are they going to be using MOVEit for our sensitive documents?
progrus 3y ago
They’re getting scared. Trying to justify their paychecks. Why do this now?
NickM 3y ago
They currently don't allow individuals to e-file unless they either: 1. Acquire commercial software, or; 2. Hire a paid preparer to file it, or; 3. Use "Free File Fillable Forms" (but this isn't an option if you fall into one of the numerous special cases that it doesn't support) So, basically, mailing in a paper return is the only free option for some people (myself included). I genuinely don't understand why paid preparers can e-file directly with the IRS, but individuals can't. There's nothing in the linked article that says this will change, so if they go ahead and ban paper filing in a couple years, I'm not sure what options are left for people like me. Yes, I can easily afford to shell out for software or a paid preparer if I really have to, but I'm very much against doing this on principle, since the whole tax prep industry in the US is a huge rent-seeking racket.
- toomuchtodo 3y ago
  https://news.ycombinator.com/item?id=35950836 https://news.ycombinator.com/item?id=35950836
- noodlesUK 3y ago
  Correct me if I’m wrong, but my understanding is that paid preparers can only e file if they are using a commercial software package that supports it such as Lacerte.

133 points by xdfg13345 3y ago

Welcome to 21st century. Sincerely, the rest of the developed world. I hope TurboTax and friends doesn't manage to screw this one up.

y-curious 3y ago
They must be pissed that their ROI for their lobbying money is so low. Fingers crossed!
deprecative 3y ago
Given this doesn't interfere with their business I don't see why they would.

toomuchtodo 3y ago

Big thanks to y'all at the IRS and US Digital Service who are working on this.

SilasX 3y ago

>Taxpayers will be able to digitally submit all correspondence, non-tax forms, and responses to notices; Nice! I had to reply to a notice last year, and fortunately, I was able to respond to it "digitally", but only via a workaround: since one accepted medium is fax, I used an e-fax service to send the response.[1] It definitely felt like there had to be a better way. [1] Shout-out to faxrocket, featured on HN: https://news.ycombinator.com/item?id=15484390 https://news.ycombinator.com/item?id=15484390

lotsofpulp 3y ago
Maybe they just got funding for email? I think it is intentional that governments, especially bigger ones like state and federal, make on the record communication with them more difficult. I have called government offices many times only to receive a message that says “call back the next business day”..at 10AM. No way to submit an email, or even a simple call back function. No, you have to spend hours of your time trying to reach them, and the only way this makes sense is if they want to make some people give up. The only advice for this is to contact a politician and hope they take up your personal cause. Basically, what you would expect in a poor, developing country, except there, at least it is known how much you need to bribe someone to get service.

forgotusername6 3y ago

The UK has had online tax returns since 2001. It always amazes me how many things in the US still use paper.

PopAlongKid 3y ago
The article is primarily about processing documents other than actual income tax returns. Does the U.K. have a completely digital (paperless) way of communicating with taxpayers and resolving issues after the tax return is filed? The U.S. has had "online tax returns" (e-file) since the 1990s. Paid tax preparers are mandated to efile, it is only the minority of DIY taxpayers who insist on paper filing their income tax returns.
- callalex 3y ago
  >it is only the minority of DIY taxpayers who insist on paper filing their income tax returns This is a gross misrepresentation of the situation. Being forced to chop down and bleach trees if you don’t want to pay a bribe to a rent seeking company that lobbies directly against your interests is not “insisting on paper filing” at all.
  - PopAlongKid 3y ago
    So you are claiming that not wanting to do one thing means you are forced to do some other thing? It is a choice, nothing is "forced". More importantly, you don't have to "pay a bribe to a rent-seeking company" (talk about gross misrepresentation!), the IRS offers free online filing to everyone (and I'm not talking about the "Free file alliance" with tax software vendors, but a direct service from the IRS). https://www.irs.gov/e-file-providers/free-file-fillable-forms https://www.irs.gov/e-file-providers/free-file-fillable-form...
    - callalex 3y ago
      The whole point of this discussion introduced by the article linked at the top of the page is that electronic communication is only available to the general public for initial filing.

gordon_freeman 3y ago

will this allow me to digitally file my amended federal taxes? That's the one thing that I was looking forward to when I started reading this and possible may impact most taxpayers but looks like IRS still needs amended tax returns in a paper form being mailed out to them?

SparkyMcUnicorn 3y ago
> This includes amendments to Forms 940, 941, and 941SSPR, which are some of the most common forms taxpayers file when amending returns.
PopAlongKid 3y ago
Filing amended returns electronically with the IRS (efile) has been available for several years. The ability to catch up with unfiled prior year returns by efiling has been available for even longer. (IOW, you can efile your unfiled 2021 tax return in 2023).

PopAlongKid 3y ago

This announcement is not about the IRS pre-filling income tax returns, a topic that is discussed regularly on HN. This is about handling all the other activities surrounding tax filing, such as getting copies of 3rd-party information returns (W-2s, 1099-Rs, etc), receiving and responding to notices regarding errors or questions in the previously filed tax return, etc. California FTB (tax agency) set up an online system for taxpayers starting five or more years ago, with continuing enhancements since then. IRS is just now catching up, by providing the ability for a taxpayer (or tax practitioner with permission) to create a secure login account with access to their personal information.

siruncledrew 3y ago

Finally, at least it's promising that the process looks to be less bad

efitz 3y ago

How about this: let’s go to a single flat rate for everyone and everything (say 20%) and eliminate all deductions except for a standard deduction (say whatever is the poverty line, eg $25000 or so). This would be for corporations and individuals. Now your taxes can be filed on a postcard. And the IRS can preprint it and send it to you, with an online code or something to click “ok” on a web site and be done. The government uses the tax code like a Swiss Army knife, trying to reward friends, punish enemies, encourage and discourage behaviors, etc. As a result we collectively spend millions of person hours and untold $$$ paying accountants to find and exploit loopholes and try and avoid undue attention. Let’s just stop.

Nexxius 3y ago
Or how about the fed gets its money from the states and the states figure out taxes.
halestock 3y ago
Sounds great, except a flat tax rate is extremely regressive so you either tank the amount of tax revenue the government collects, or you punish low income earners far more than wealthy individuals.
- efitz 3y ago
  The regressive aspect of it is offset by the large standard deduction.
  - halestock 3y ago
    That still won't solve the issue. The reason for progressive taxation is that there simply isn't a tax rate that allows you to both sufficiently fund the government and doesn't punish low income earners. The gulf between what the lowest and highest earners make is simply so vast that you can't do it without progressive taxation.
    - efitz 3y ago

abhayhegde 3y ago

This would be a godsend! I'm not sure of its applicability to non-resident aliens yet, but having to mail the documents has been a really slow process. They don't open them even after two months of receiving them, and then take another few weeks to process. Going digital would at least alleviate the fears of having submitted the returns on time, since otherwise IRS doesn't acknowledge them receiving on/before time.

supportengineer 3y ago

Are they going to be using MOVEit for our sensitive documents?

progrus 3y ago

They’re getting scared. Trying to justify their paychecks. Why do this now?

NickM 3y ago

They currently don't allow individuals to e-file unless they either: 1. Acquire commercial software, or; 2. Hire a paid preparer to file it, or; 3. Use "Free File Fillable Forms" (but this isn't an option if you fall into one of the numerous special cases that it doesn't support) So, basically, mailing in a paper return is the only free option for some people (myself included). I genuinely don't understand why paid preparers can e-file directly with the IRS, but individuals can't. There's nothing in the linked article that says this will change, so if they go ahead and ban paper filing in a couple years, I'm not sure what options are left for people like me. Yes, I can easily afford to shell out for software or a paid preparer if I really have to, but I'm very much against doing this on principle, since the whole tax prep industry in the US is a huge rent-seeking racket.

toomuchtodo 3y ago
https://news.ycombinator.com/item?id=35950836 https://news.ycombinator.com/item?id=35950836
noodlesUK 3y ago
Correct me if I’m wrong, but my understanding is that paid preparers can only e file if they are using a commercial software package that supports it such as Lacerte.