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Just one thing to add… The “IRS will functionally increase taxes” argument is a distraction and I doubt anyone here takes it seriously. But the argument matte

Just one thing to add… The “IRS will functionally increase taxes” argument is a distraction and I doubt anyone here takes it seriously. But the argument matters because it has given Congress political cover to let Intuit keep leeching off the system, so a response is in order. Congress should require the IRS to give every person an auditable receipt of every tax they paid in a standard format. Then, truly public-minded services can use the receipt to help people understand if their filings were correct. There’s no good reason automated IRS filing would result in tax increases for anyone, it’s a fixable problem, and good grief I’m ready to stop paying TurboTax $180/year.

remarkEon 3y ago
I don't think it's really a distraction. It seems illogical for the government to not have a free, easy way for the taxpayer to remit their taxes to the government (or submit the paperwork that should generate a return from that government). But at the same time I think it's fine to be skeptical that you should trust the government to be honest in showing you what amount of taxes you actually owe given how complicated the tax code is, and because there exists, ahem, a bit of an incentive problem there. Is the free-filing system designed to maximize your return? Is it designed for ease of use? Generally I agree that TurboTax is a leech, but just because they're leeches doesn't mean there isn't an incentive problem that should be addressed. >Then, truly public-minded services can use the receipt to help people understand if their filings were correct. Do you mean a private company does this? Or something else?
- AnthonyMouse 3y ago
  > Is the free-filing system designed to maximize your return? The solution to this is for the government to publish the source code in the public domain. Then anyone who can do better can fork it and sell it, which will make that market more competitive when it's cheaper to enter because the government has already done 80% of the work, but there will only be a market for this if the government isn't maximizing your return. "Better return than the free system or your money back" would be a great way to get customers, and they'd be viable with fewer customers when they're only paying the incremental cost of doing what the government failed to. And then the government system would be embarrassed if private forks could frequently beat them, which improves their incentives.
  - iambateman 3y ago
    Oh, nice, this is a fun idea. If submitting taxes were essentially an open API endpoint and the front end was an open source government-sponsored UX. Love that. The US Digital Corps has the technical chops to do that well if the politics could work out. To the Intuit folks reading this because your boss told you to keep an eye on the sentiment on Hacker News…don’t worry you can _totally_ have your own fork and since you’re the best you would have nothing to worry about. Since you care so much about the American tax payer, I look forward to your enthusiastic support of more transparent tax filing.
  - smsm42 3y ago
    You don't need the code even - though the code, as being already paid for by the taxpayers, should be available to them anyway - the rules are public, the data should be available to the public, so you can just reimplement the rules and see if you get the same answer. They key here to make the data a) available b) portable c) every decision the system takes be documented and having the audit trail.
    - AnthonyMouse 3y ago
      You do need the code because if the public system gets it right for (or is otherwise used by) 90% of the taxpayers, a private system for the remaining taxpayers would have to cover its costs with only 10% of the revenue. Releasing the code reduces their costs because they don't have to duplicate the parts the government already got right, they only have to fix what it got wrong. "The rules" in this case is the tax code, which is thousands of pages and written in lawyer. You can imagine how converting that into computer code is a non-trivial undertaking notwithstanding that it's public information.
      - smsm42 3y ago
        > a private system for the remaining taxpayers would have to cover its costs with only 10% of the revenue. Is it that hard? Americans filed about 260M returns last year. 10% of it is 26M. Let's say you get only 10% of those - since you're not the only person on the market - to pay you $100 (if you save a significant amount on taxes, paying $100 for it would make sense, won't it?) - that's $260M, or about as much as the government says their whole system, for all 100% of taxpayers, would cost. If you can do better job than the government on the efficiency (not a very high bar), and you only have to support 1/10 of the volume the government does, I think these numbers look ok for you. > You can imagine how converting that into computer code is a non-trivial undertaking notwithstanding that it's public information. It is. But there are multiple businesses who already have been doing it for years, so it looks like a solvable problem.
- MobiusHorizons 3y ago
  Do you consider it an incentive problem for cloud providers to send you a bill instead of asking you to submit what you believe you should owe? We have societally solved these problems my making them auditable. People don’t necessarily trust the bill, and have means of disputing it. If you think the government’s tool is overcharging, you are welcome to file your own taxes and deal with the possibility of getting audited.
  - remarkEon 3y ago
    Wait, do people not keep track of their own usage to compare it to their AWS bill? I just use free tiers for personal projects, but I guess I assumed that there would be some log reviews at some point if you were using it for running an actual business. Anyway, I guess that means my answer is "yes". >If you think the government’s tool is overcharging, you are welcome to file your own taxes and deal with the possibility of getting audited. "Pay what we say you owe or we'll nuke your finances with an audit". Yes this is exactly my problem.
    - turquoisevar 3y ago
      > "Pay what we say you owe or we'll nuke your finances with an audit". Yes this is exactly my problem. You might be misunderstanding in what an audit entails. There’s no direct “nuking” of finances due to an audit. In the vast majority of cases an audit is nothing more than “you claimed this on your return, can you please provide the documentation that supports it?” More specifically, I believe most audits are about claiming child tax credit and them wanting documentation to support the claim. If your finances get nuked that means you lied on your return, with very few exceptions. Main exception that comes to mind is claiming expenses that are up for debate. Also circling back to your earlier comment. Yes the tax code is needlessly complicated, Intuit et al. are the ones who caused that and are actively lobbying against simplifying it because their paid services would become obsolete if the tax code was nice and simple.
- roddds 3y ago
  I'm sorry if this is stupid - I'm not American and this is entire conversation about taxes here is nuts, but: >Is the free-filing system designed to maximize your return? Why does it need to? I mean, why do you need a tax return, if your taxes would be lower if you just got charged the right amount in the first place? And then isn't the role of society to audit their own taxes, and at the same time support candidates that vow to simplify the tax code?
  - geodel 3y ago
    Well this is indeed stupid. > if you just got charged the right amount in the first place? right amount is loaded phrase. There is big range and disagreement over what is right amount. > And then isn't the role of society ... to simplify the tax code? It is about as intelligent as saying isn't it role of society that ensure we all live peacefully, then we don't need armies, defense budgets and so on.
  - remarkEon 3y ago
    To simplify what is an absurdly complicated topic, the US Tax Code gives you a lot of "breaks" for certain things. For a lot of those things, the government won't know they happened unless you tell them (and you prove it). In most cases (i.e. for regular salaried or hourly employees) your taxes are automatically deducted, and then at the beginning of the new year you basically give the government a list of things that happened that could/would/should reduce your taxable income, which results in you getting money back from the government (sometimes).
- iambateman 3y ago
  Skepticism is welcome on all things government. But most of the time our government does sketchy things away from the attention and affliction of the selectorate. If millions of influential people were using a system, the IRS would have an extremely strong incentive to avoid negative PR through chicanery. And we already have an incentive problem in the current setup, anyway.
- chrismcb 3y ago
  You've always been able to file your taxes freely. My biggest problem is the IRS already knows what I owe, with the exception of a few small things. So why do I have to go through the process of telling them what I think I owe.
rayiner 3y ago
The IRS already provides a transcript.
- iambateman 3y ago
  Nice, I didn’t realize that. I just checked and it looks like a good start, even though I’d like it to be fully granular.
smsm42 3y ago
I'm usually lean to the side of "keep your government paws out of the business". But taxes aren't business - it's a governmental function, and there's no reason why the government who levies the taxes can't also produce proper documentation for it and make the compliance easier. There could be corner cases where it's hard to do, fine - just do the easy 80% and let the business take care of the rest. Let the business also be able to check it and profit if they find a mistake. If you don't believe The Man did it right - you should be able to download the data and give it to the same Intuit folks and see if they can do better. It's just adding an easy option, I don't see anything wrong with that at all. Intuit would do fine with it - yes, they'd lose some income, but they have more then enough other business, both in more complex taxes and other ways of organizing business, they don't need to be able to fleece every single taxpayer. In fact, if such IRS system is built, they'd probably will make a good buck by providing added value offerings to it, just as they do now for existing tax filing systems. Even if the system to do that costs double to the high estimate - let's say $0.5B per year, given the government projects are always over cost - it's still about 0.15% of the taxes collected every year. There's no reason why it'd have any influence at all on the level of taxes collected.

remarkEon 3y ago

I don't think it's really a distraction. It seems illogical for the government to not have a free, easy way for the taxpayer to remit their taxes to the government (or submit the paperwork that should generate a return from that government). But at the same time I think it's fine to be skeptical that you should trust the government to be honest in showing you what amount of taxes you actually owe given how complicated the tax code is, and because there exists, ahem, a bit of an incentive problem there. Is the free-filing system designed to maximize your return? Is it designed for ease of use? Generally I agree that TurboTax is a leech, but just because they're leeches doesn't mean there isn't an incentive problem that should be addressed. >Then, truly public-minded services can use the receipt to help people understand if their filings were correct. Do you mean a private company does this? Or something else?

AnthonyMouse 3y ago
> Is the free-filing system designed to maximize your return? The solution to this is for the government to publish the source code in the public domain. Then anyone who can do better can fork it and sell it, which will make that market more competitive when it's cheaper to enter because the government has already done 80% of the work, but there will only be a market for this if the government isn't maximizing your return. "Better return than the free system or your money back" would be a great way to get customers, and they'd be viable with fewer customers when they're only paying the incremental cost of doing what the government failed to. And then the government system would be embarrassed if private forks could frequently beat them, which improves their incentives.
- iambateman 3y ago
  Oh, nice, this is a fun idea. If submitting taxes were essentially an open API endpoint and the front end was an open source government-sponsored UX. Love that. The US Digital Corps has the technical chops to do that well if the politics could work out. To the Intuit folks reading this because your boss told you to keep an eye on the sentiment on Hacker News…don’t worry you can _totally_ have your own fork and since you’re the best you would have nothing to worry about. Since you care so much about the American tax payer, I look forward to your enthusiastic support of more transparent tax filing.
- smsm42 3y ago
  You don't need the code even - though the code, as being already paid for by the taxpayers, should be available to them anyway - the rules are public, the data should be available to the public, so you can just reimplement the rules and see if you get the same answer. They key here to make the data a) available b) portable c) every decision the system takes be documented and having the audit trail.
  - AnthonyMouse 3y ago
    You do need the code because if the public system gets it right for (or is otherwise used by) 90% of the taxpayers, a private system for the remaining taxpayers would have to cover its costs with only 10% of the revenue. Releasing the code reduces their costs because they don't have to duplicate the parts the government already got right, they only have to fix what it got wrong. "The rules" in this case is the tax code, which is thousands of pages and written in lawyer. You can imagine how converting that into computer code is a non-trivial undertaking notwithstanding that it's public information.
    - smsm42 3y ago
      > a private system for the remaining taxpayers would have to cover its costs with only 10% of the revenue. Is it that hard? Americans filed about 260M returns last year. 10% of it is 26M. Let's say you get only 10% of those - since you're not the only person on the market - to pay you $100 (if you save a significant amount on taxes, paying $100 for it would make sense, won't it?) - that's $260M, or about as much as the government says their whole system, for all 100% of taxpayers, would cost. If you can do better job than the government on the efficiency (not a very high bar), and you only have to support 1/10 of the volume the government does, I think these numbers look ok for you. > You can imagine how converting that into computer code is a non-trivial undertaking notwithstanding that it's public information. It is. But there are multiple businesses who already have been doing it for years, so it looks like a solvable problem.
MobiusHorizons 3y ago
Do you consider it an incentive problem for cloud providers to send you a bill instead of asking you to submit what you believe you should owe? We have societally solved these problems my making them auditable. People don’t necessarily trust the bill, and have means of disputing it. If you think the government’s tool is overcharging, you are welcome to file your own taxes and deal with the possibility of getting audited.
- remarkEon 3y ago
  Wait, do people not keep track of their own usage to compare it to their AWS bill? I just use free tiers for personal projects, but I guess I assumed that there would be some log reviews at some point if you were using it for running an actual business. Anyway, I guess that means my answer is "yes". >If you think the government’s tool is overcharging, you are welcome to file your own taxes and deal with the possibility of getting audited. "Pay what we say you owe or we'll nuke your finances with an audit". Yes this is exactly my problem.
  - turquoisevar 3y ago
    > "Pay what we say you owe or we'll nuke your finances with an audit". Yes this is exactly my problem. You might be misunderstanding in what an audit entails. There’s no direct “nuking” of finances due to an audit. In the vast majority of cases an audit is nothing more than “you claimed this on your return, can you please provide the documentation that supports it?” More specifically, I believe most audits are about claiming child tax credit and them wanting documentation to support the claim. If your finances get nuked that means you lied on your return, with very few exceptions. Main exception that comes to mind is claiming expenses that are up for debate. Also circling back to your earlier comment. Yes the tax code is needlessly complicated, Intuit et al. are the ones who caused that and are actively lobbying against simplifying it because their paid services would become obsolete if the tax code was nice and simple.
roddds 3y ago
I'm sorry if this is stupid - I'm not American and this is entire conversation about taxes here is nuts, but: >Is the free-filing system designed to maximize your return? Why does it need to? I mean, why do you need a tax return, if your taxes would be lower if you just got charged the right amount in the first place? And then isn't the role of society to audit their own taxes, and at the same time support candidates that vow to simplify the tax code?
- geodel 3y ago
  Well this is indeed stupid. > if you just got charged the right amount in the first place? right amount is loaded phrase. There is big range and disagreement over what is right amount. > And then isn't the role of society ... to simplify the tax code? It is about as intelligent as saying isn't it role of society that ensure we all live peacefully, then we don't need armies, defense budgets and so on.
- remarkEon 3y ago
  To simplify what is an absurdly complicated topic, the US Tax Code gives you a lot of "breaks" for certain things. For a lot of those things, the government won't know they happened unless you tell them (and you prove it). In most cases (i.e. for regular salaried or hourly employees) your taxes are automatically deducted, and then at the beginning of the new year you basically give the government a list of things that happened that could/would/should reduce your taxable income, which results in you getting money back from the government (sometimes).
iambateman 3y ago
Skepticism is welcome on all things government. But most of the time our government does sketchy things away from the attention and affliction of the selectorate. If millions of influential people were using a system, the IRS would have an extremely strong incentive to avoid negative PR through chicanery. And we already have an incentive problem in the current setup, anyway.
chrismcb 3y ago
You've always been able to file your taxes freely. My biggest problem is the IRS already knows what I owe, with the exception of a few small things. So why do I have to go through the process of telling them what I think I owe.

rayiner 3y ago

The IRS already provides a transcript.

iambateman 3y ago
Nice, I didn’t realize that. I just checked and it looks like a good start, even though I’d like it to be fully granular.

smsm42 3y ago

I'm usually lean to the side of "keep your government paws out of the business". But taxes aren't business - it's a governmental function, and there's no reason why the government who levies the taxes can't also produce proper documentation for it and make the compliance easier. There could be corner cases where it's hard to do, fine - just do the easy 80% and let the business take care of the rest. Let the business also be able to check it and profit if they find a mistake. If you don't believe The Man did it right - you should be able to download the data and give it to the same Intuit folks and see if they can do better. It's just adding an easy option, I don't see anything wrong with that at all. Intuit would do fine with it - yes, they'd lose some income, but they have more then enough other business, both in more complex taxes and other ways of organizing business, they don't need to be able to fleece every single taxpayer. In fact, if such IRS system is built, they'd probably will make a good buck by providing added value offerings to it, just as they do now for existing tax filing systems. Even if the system to do that costs double to the high estimate - let's say $0.5B per year, given the government projects are always over cost - it's still about 0.15% of the taxes collected every year. There's no reason why it'd have any influence at all on the level of taxes collected.