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As I understand it, this system exists largely because ProPublica shined a light on how corrupt the TurboTax deals were and the IRS couldn't pretend they though

As I understand it, this system exists largely because ProPublica shined a light on how corrupt the TurboTax deals were and the IRS couldn't pretend they thought everything was okay anymore. I'm hopeful that the IRS knows that we're on to it and doesn't get cozy with them again.

dsr_ 3y ago
The IRS is not 'cozy' with Intuit, HRB, etc. The IRS is underfunded by political design. All of this crap is the fault of corporate lobbyists and the politicians who take their money.
- saulrh 3y ago
  For people who aren't aware of this, the IRS is so underfunded right now that funding IRS enforcement has an ROI of between five and nine, that is, for every dollar we put into funding the IRS it would be able to claw back up to ten dollars in unpaid taxes. That's the kind of number that you usually only see on "the next Google" type unicorn startups. It would take eighty billion dollars, invested over ten years, to fund the IRS to the point where diminishing returns bring the ROI back down to reasonable levels; those eighty billion dollars would return almost 200 billion dollars in newly collected taxes. Almost all of that would come from high-wealth taxpayers, large corporations, and partnerships, which are currently very under-audited due to lack of resources - the audit rate is currently lower for high-wealth entities than it is for random poor people simply because auditing people with a lot of money is complicated. The current audit rate is currently dramatically below where it was twenty years ago. Source: https://www.cbo.gov/publication/57444 https://www.cbo.gov/publication/57444
tootie 3y ago
I think that was a bit oversimplified, the Free File program was problematic in a lot of ways, but it's not like the US government was just sitting on their own free file system that was locked behind a vault. They had to actually make the thing and it was never a given that they'd be able to do it. When the private companies said they'd offer their services for free to prevent the government from taking on the expense and hassle, it was sensible trade off. When the tax prep industry got greedy and overplayed their hand, they got bitten and are now in deep trouble.

dsr_ 3y ago

The IRS is not 'cozy' with Intuit, HRB, etc. The IRS is underfunded by political design. All of this crap is the fault of corporate lobbyists and the politicians who take their money.

saulrh 3y ago
For people who aren't aware of this, the IRS is so underfunded right now that funding IRS enforcement has an ROI of between five and nine, that is, for every dollar we put into funding the IRS it would be able to claw back up to ten dollars in unpaid taxes. That's the kind of number that you usually only see on "the next Google" type unicorn startups. It would take eighty billion dollars, invested over ten years, to fund the IRS to the point where diminishing returns bring the ROI back down to reasonable levels; those eighty billion dollars would return almost 200 billion dollars in newly collected taxes. Almost all of that would come from high-wealth taxpayers, large corporations, and partnerships, which are currently very under-audited due to lack of resources - the audit rate is currently lower for high-wealth entities than it is for random poor people simply because auditing people with a lot of money is complicated. The current audit rate is currently dramatically below where it was twenty years ago. Source: https://www.cbo.gov/publication/57444 https://www.cbo.gov/publication/57444

tootie 3y ago

I think that was a bit oversimplified, the Free File program was problematic in a lot of ways, but it's not like the US government was just sitting on their own free file system that was locked behind a vault. They had to actually make the thing and it was never a given that they'd be able to do it. When the private companies said they'd offer their services for free to prevent the government from taking on the expense and hassle, it was sensible trade off. When the tax prep industry got greedy and overplayed their hand, they got bitten and are now in deep trouble.