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I disagree. If anything, this will compel the tax preparation software companies to get even better than before, and offer an increased value proposition. Com

by Alupis 3y ago

I disagree. If anything, this will compel the tax preparation software companies to get even better than before, and offer an increased value proposition. Competition benefits the consumer, and for a long while there's been limited, mostly fixed competition (via Brand awareness mostly). FreeTaxUSA is amazing, and cheap, but it does not yet have the brand power the incumbents do. It's unlikely the IRS offering will be as easy to use or as pleasant as the existing offerings, but it will be a huge shot across all of their collective bows. Keep in mind the IRS offering a free online service for tax filing does not reduce the complexities of the current tax code - nor does it make for a more fair tax system (one where having means to access professionals reduces your perceived tax liability). This system merely means fewer people need to pay $49 a year to file taxes...

LeafItAlone 3y ago
Then it doesn’t sound like you disagree, because you don’t see this killing the industry.
TylerE 3y ago
Lobbying by the tax prep companies is a big part of how it got so byzantine in the first place.
- l33t7332273 3y ago
  Can you elaborate on that, perhaps with some substantive example? I believe that these companies lobby to keep IRS from providing free tax prep, but I do not think that they lobby to make the tax code more complicated. It’s my understanding that the tax code is complicated as a result of disparate efforts to increase support among voting blocks, to encourage/discourage behaviors, and to reward supporters/backers.
  - RIMR 3y ago
    https://billmoyers.com/story/how-lobbying-by-tax-preparer-helps-keep-tax-day-complicated/ https://billmoyers.com/story/how-lobbying-by-tax-preparer-he...
    - l33t7332273 3y ago
      None of that examples support the thesis that tax preparation companies are responsible for making the tax code more complicated.
      - RIMR 3y ago
        Knowing that the economy is only going to get larger and more complex, how is the constant lobbying to keep the system inefficient not making it more complicated? Did you have a specific counter-argument, or just thought-termination?
- robertlagrant 3y ago
  The people to blame aren't the lobbyists. It's those who choose to be lobbied.
ska 3y ago
I don't think you are actually disagreeing - the GP was saying that if they can't differentiate themselves enough to make consumers choose to pay, then no real loss.
cujaneway 3y ago
This whole thing reads like insanity to me lol, I live & work as a contractor in the UK and I'm taxed directly through PAYE on earnings. Beyond that I just file my tax return through the Gov website.
- Alupis 3y ago
  The US has a long history of tax credits and deductions that people finagle to pay as close to their actual tax obligation as possible. (ie. if you do not do this, then you are quite literally paying more than your actual obligation according to the tax code). The government isn't aware of your donations or losses, or whatever. So you have to tell them about it. Tax preparation software, historically, was designed to make this process easier by prompting you for all sorts of details you may have forgotten or were un-aware of. In essence, the software was supposed to replace a paid tax professional. Today, most people use Standard Deduction since it was raised so high by the Trump Administration, and the need for credits and deductions has been greatly diminished. However, the need is still there for many folks, and not all tax filings are simple. The nirvana for tax filing would be a single page online that disputes any facts the IRS already knows (such as informing them about donations or the like). But, our tax code itself needs to be vastly reformed and simplified before that can become a reality.
happytiger 3y ago
Same logic for health care?
- Alupis 3y ago
  People focus on the insurance side of health care in the US - but that ignores the reasons the system is so broken (Medicare + Pharmaceutical Companies).
jjulius 3y ago
>If anything, this will compel the tax preparation software companies to get even better than before... This implies that the state of tax preparation software is "good", which really doesn't line up with overall consumer sentiment. Personally, I hardly consider clunky UI/UXs loaded with dark patterns to be anything but good.
irrational 3y ago
FreeTaxUSA is the one I use and recommend to everyone else. Though, I also do my taxes on TurboTax to double check my work (I don't submit until both programs report the same amounts to the penny). I just don't submit using TurboTax.
RIMR 3y ago
This is overly optimistic. Intuit is the leader in this space, and they haven't produced a compelling new feature in decades. They have spent far more of their energy fighting the government to maintain their status quo than doing anything material for their customers. They even have gone as far as to lie to their customers about their eligibility for free filing just to skim a little bit off the top of the lowest earners. Even in the presence of competition, the barrier to entry is so high that Intuit has maintained a virtual monopoly on home tax preparation. They will fight to uphold/regain that before they ever fight for you. Yes, there are alternatives, but what possible enhancement could any of them provide that is worth anything? Tax preparation is largely deterministic, and maximizing deductions is a largely human-lead task that is only beneficial to higher earners who have an accountant that does their taxes for them and don't care about services like TurboTax and FreeTaxUSA. For most working class Americans a guaranteed free solution provided by the IRS itself is a no-brainer. You know that the government isn't in the business of maximizing profits at all costs, and you get the peace of mind that the IRS itself calculated your taxes, and that you are unlikely to get the blame if there is an error. Tax collection is a critical function that the government relies on, it should overwhelmingly be a government-lead process that doesn't cost people any more than what they owe in taxes. I hope all of these predatory tax filing businesses go under, because paying taxes is a civic duty that people shouldn't be reliant on private organizations to fulfill for them.
bastardoperator 3y ago
I agree and they already do to some extent. I could easily do my own taxes. I pay for a service because they take on liability when it comes to my tax return being correct. If they screw up, and they have, they fix it. That is worth 50-100 dollars to me...
complianceowl 3y ago
> nor does it make for a more fair tax system (one where having means to access professionals reduces your perceived tax liability) It's not that deep, man. Not everything in life has to be an all-or-nothing scenario. This is a big win for a solid percentage of Americans who have a relatively straight forward tax situation. Tax fairness, IRS tyranny, bought-out politicians, corporatism -- let's leave that for another day. Let's learn to celebrate wins no matter how small.
r00fus 3y ago
Clearly @droptablemain was joking as a response to the hyperbolic reaction from the likes of Intuit et. al.
HumblyTossed 3y ago
> Competition benefits the consumer, and for a long while there's been limited, mostly fixed competition (via Brand awareness mostly). I don't know that this is really true anymore. Maybe a little, but mostly just no.

by Alupis 3y ago

LeafItAlone 3y ago

Then it doesn’t sound like you disagree, because you don’t see this killing the industry.

TylerE 3y ago

Lobbying by the tax prep companies is a big part of how it got so byzantine in the first place.

l33t7332273 3y ago
Can you elaborate on that, perhaps with some substantive example? I believe that these companies lobby to keep IRS from providing free tax prep, but I do not think that they lobby to make the tax code more complicated. It’s my understanding that the tax code is complicated as a result of disparate efforts to increase support among voting blocks, to encourage/discourage behaviors, and to reward supporters/backers.
- RIMR 3y ago
  https://billmoyers.com/story/how-lobbying-by-tax-preparer-helps-keep-tax-day-complicated/ https://billmoyers.com/story/how-lobbying-by-tax-preparer-he...
  - l33t7332273 3y ago
    None of that examples support the thesis that tax preparation companies are responsible for making the tax code more complicated.
    - RIMR 3y ago
      Knowing that the economy is only going to get larger and more complex, how is the constant lobbying to keep the system inefficient not making it more complicated? Did you have a specific counter-argument, or just thought-termination?
robertlagrant 3y ago
The people to blame aren't the lobbyists. It's those who choose to be lobbied.

ska 3y ago

I don't think you are actually disagreeing - the GP was saying that if they can't differentiate themselves enough to make consumers choose to pay, then no real loss.

cujaneway 3y ago

This whole thing reads like insanity to me lol, I live & work as a contractor in the UK and I'm taxed directly through PAYE on earnings. Beyond that I just file my tax return through the Gov website.

Alupis 3y ago
The US has a long history of tax credits and deductions that people finagle to pay as close to their actual tax obligation as possible. (ie. if you do not do this, then you are quite literally paying more than your actual obligation according to the tax code). The government isn't aware of your donations or losses, or whatever. So you have to tell them about it. Tax preparation software, historically, was designed to make this process easier by prompting you for all sorts of details you may have forgotten or were un-aware of. In essence, the software was supposed to replace a paid tax professional. Today, most people use Standard Deduction since it was raised so high by the Trump Administration, and the need for credits and deductions has been greatly diminished. However, the need is still there for many folks, and not all tax filings are simple. The nirvana for tax filing would be a single page online that disputes any facts the IRS already knows (such as informing them about donations or the like). But, our tax code itself needs to be vastly reformed and simplified before that can become a reality.

happytiger 3y ago

Same logic for health care?

Alupis 3y ago
People focus on the insurance side of health care in the US - but that ignores the reasons the system is so broken (Medicare + Pharmaceutical Companies).

jjulius 3y ago

>If anything, this will compel the tax preparation software companies to get even better than before... This implies that the state of tax preparation software is "good", which really doesn't line up with overall consumer sentiment. Personally, I hardly consider clunky UI/UXs loaded with dark patterns to be anything but good.

irrational 3y ago

FreeTaxUSA is the one I use and recommend to everyone else. Though, I also do my taxes on TurboTax to double check my work (I don't submit until both programs report the same amounts to the penny). I just don't submit using TurboTax.

RIMR 3y ago

This is overly optimistic. Intuit is the leader in this space, and they haven't produced a compelling new feature in decades. They have spent far more of their energy fighting the government to maintain their status quo than doing anything material for their customers. They even have gone as far as to lie to their customers about their eligibility for free filing just to skim a little bit off the top of the lowest earners. Even in the presence of competition, the barrier to entry is so high that Intuit has maintained a virtual monopoly on home tax preparation. They will fight to uphold/regain that before they ever fight for you. Yes, there are alternatives, but what possible enhancement could any of them provide that is worth anything? Tax preparation is largely deterministic, and maximizing deductions is a largely human-lead task that is only beneficial to higher earners who have an accountant that does their taxes for them and don't care about services like TurboTax and FreeTaxUSA. For most working class Americans a guaranteed free solution provided by the IRS itself is a no-brainer. You know that the government isn't in the business of maximizing profits at all costs, and you get the peace of mind that the IRS itself calculated your taxes, and that you are unlikely to get the blame if there is an error. Tax collection is a critical function that the government relies on, it should overwhelmingly be a government-lead process that doesn't cost people any more than what they owe in taxes. I hope all of these predatory tax filing businesses go under, because paying taxes is a civic duty that people shouldn't be reliant on private organizations to fulfill for them.

bastardoperator 3y ago

I agree and they already do to some extent. I could easily do my own taxes. I pay for a service because they take on liability when it comes to my tax return being correct. If they screw up, and they have, they fix it. That is worth 50-100 dollars to me...

complianceowl 3y ago

> nor does it make for a more fair tax system (one where having means to access professionals reduces your perceived tax liability) It's not that deep, man. Not everything in life has to be an all-or-nothing scenario. This is a big win for a solid percentage of Americans who have a relatively straight forward tax situation. Tax fairness, IRS tyranny, bought-out politicians, corporatism -- let's leave that for another day. Let's learn to celebrate wins no matter how small.

r00fus 3y ago

Clearly @droptablemain was joking as a response to the hyperbolic reaction from the likes of Intuit et. al.

HumblyTossed 3y ago

> Competition benefits the consumer, and for a long while there's been limited, mostly fixed competition (via Brand awareness mostly). I don't know that this is really true anymore. Maybe a little, but mostly just no.