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I don't know why you are being downvoted. I think it is a very reasonable question to ask how the government can pre-populate capital tax forms without being no

I don't know why you are being downvoted. I think it is a very reasonable question to ask how the government can pre-populate capital tax forms without being notified of sales. If the onus is on you to send in the sales documentation throughout the year, then I would not say this is as simple as "signing on your phone". If a company handles it for you, then you are paying for that service. I would even to go so far to say that your employer being forced to maintain an accountant to send in your income tax forms is not free to you. The point being made is that anything beyond income tax is essentially impossible to automate since the government cannot (and I believe should not) track your cost side. For instance, the solar tax credit in the US is a scout's honor type form where you can put whatever cost you want to claim that are eligible without receipts. If you get audited, you better hope you can conjure those receipts. How could the government automate such a form?

PaulDavisThe1st 3y ago
On the order of 10% of US taxpayers have anything beyond the income that is reported on a 1040. There is no need for the obvious, public, easily accessible tax filing system to be designed around the needs of that 10% (I am in that 10%, btw).
danans 3y ago
> The point being made is that anything beyond income tax is essentially impossible to automate since the government cannot (and I believe should not) track your cost side. Since 2008, brokerage firms are required to include sales and their cost basis information on 1099-B forms. There's technically no reason these couldn't be electronically transmitted to the IRS in a standard format. https://www.finra.org/investors/insights/cost-basis-and-your-taxes https://www.finra.org/investors/insights/cost-basis-and-your... > For instance, the solar tax credit in the US is a scout's honor type form where you can put whatever cost you want to claim that are eligible without receipts. This is true, but as you say, the consequences of an audit and discovery of the fraud are meant to deter it. > How could the government automate such a form? Create a website where the solar installer registers the installation and enters the cost information of the project, and the taxpayer claims the record and associates it with their tax records. They are already doing something like this for car dealers for the EV tax credits: https://www.irs.gov/credits-deductions/register-your-dealership-to-enable-credits-for-clean-vehicle-buyers https://www.irs.gov/credits-deductions/register-your-dealers...
- itake 3y ago
  Other examples would include selling items in garage sales. How will the government automatically account for selling of a rare watch or vehicle sales? What about crypto sales and airdrops?
  - ghaff 3y ago
    Vehicles have titles so I wouldn't count of that not being tracked in some way. At least in MA occasional/isolated sales of things "acquired for personal or household use." I imagine that for really expensive sales, the answer is consult with your accountant. And of course lots of things happen with cash as long as the amounts aren't too great.
    - itake 3y ago
      "the answer is consult with your accountant." is not free automatic filing with the gov.
- hervature 3y ago
  Part of the reason I dislike giving examples is that people think the argument hinges on the examples. The point of my argument is that notifying the government of everything (1099-B in this example) as it happens live and settling at tax time with determined calculations sent to you by the government is the same complexity of maintaining your own records throughout the year then notifying and settling at tax time. The key part I'm emphasizing is that the hard part of taxes is collecting the information and knowing what is taxable. Not the calculation. If you think that taxes are hard because you need to multiply line 17 by 0.3 and then take the minimum of line 19 and 20, then we are not discussing the same thing. Again, pretending that businesses maintaining an army of accountants and filing the relevant information for you as part of their service is "free" and "automatic" then we do not see things equivalently. A segment of the population believes that the responsibility is on the government to prove you filed incorrectly. Giving them the authority to collect whatever information they want on you is an issue of privacy. Personally, I'm opposed to businesses sending the government all your information not because I want to make life harder for myself/others at tax time but because I don't believe the information will be used only for taxes. The solar example was meant to emphasize the point that the government can only automate the process if every single purchase is marked and accounted for. Giving them the authority to track all purchases (both digital and physical) or mandating others to record said purchases sets a dangerous precedent. Hopefully we could agree on that.

PaulDavisThe1st 3y ago

On the order of 10% of US taxpayers have anything beyond the income that is reported on a 1040. There is no need for the obvious, public, easily accessible tax filing system to be designed around the needs of that 10% (I am in that 10%, btw).

danans 3y ago

> The point being made is that anything beyond income tax is essentially impossible to automate since the government cannot (and I believe should not) track your cost side. Since 2008, brokerage firms are required to include sales and their cost basis information on 1099-B forms. There's technically no reason these couldn't be electronically transmitted to the IRS in a standard format. https://www.finra.org/investors/insights/cost-basis-and-your-taxes https://www.finra.org/investors/insights/cost-basis-and-your... > For instance, the solar tax credit in the US is a scout's honor type form where you can put whatever cost you want to claim that are eligible without receipts. This is true, but as you say, the consequences of an audit and discovery of the fraud are meant to deter it. > How could the government automate such a form? Create a website where the solar installer registers the installation and enters the cost information of the project, and the taxpayer claims the record and associates it with their tax records. They are already doing something like this for car dealers for the EV tax credits: https://www.irs.gov/credits-deductions/register-your-dealership-to-enable-credits-for-clean-vehicle-buyers https://www.irs.gov/credits-deductions/register-your-dealers...

itake 3y ago
Other examples would include selling items in garage sales. How will the government automatically account for selling of a rare watch or vehicle sales? What about crypto sales and airdrops?
- ghaff 3y ago
  Vehicles have titles so I wouldn't count of that not being tracked in some way. At least in MA occasional/isolated sales of things "acquired for personal or household use." I imagine that for really expensive sales, the answer is consult with your accountant. And of course lots of things happen with cash as long as the amounts aren't too great.
  - itake 3y ago
    "the answer is consult with your accountant." is not free automatic filing with the gov.
hervature 3y ago
Part of the reason I dislike giving examples is that people think the argument hinges on the examples. The point of my argument is that notifying the government of everything (1099-B in this example) as it happens live and settling at tax time with determined calculations sent to you by the government is the same complexity of maintaining your own records throughout the year then notifying and settling at tax time. The key part I'm emphasizing is that the hard part of taxes is collecting the information and knowing what is taxable. Not the calculation. If you think that taxes are hard because you need to multiply line 17 by 0.3 and then take the minimum of line 19 and 20, then we are not discussing the same thing. Again, pretending that businesses maintaining an army of accountants and filing the relevant information for you as part of their service is "free" and "automatic" then we do not see things equivalently. A segment of the population believes that the responsibility is on the government to prove you filed incorrectly. Giving them the authority to collect whatever information they want on you is an issue of privacy. Personally, I'm opposed to businesses sending the government all your information not because I want to make life harder for myself/others at tax time but because I don't believe the information will be used only for taxes. The solar example was meant to emphasize the point that the government can only automate the process if every single purchase is marked and accounted for. Giving them the authority to track all purchases (both digital and physical) or mandating others to record said purchases sets a dangerous precedent. Hopefully we could agree on that.