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The Taxpayers Protection Alliance spokesperson quoted at the bottom says: > Private tax services "have every incentive to find the deductions that will yield t
by jawns 2y ago
The Taxpayers Protection Alliance spokesperson quoted at the bottom says:
> Private tax services "have every incentive to find the deductions that will yield them the best return," Zupkus said, adding that the IRS wants "to extract as much as possible from the taxpayer."
I think it's worthwhile to acknowledge that there are indeed slightly different incentives involved when it comes to the private sector handling tax prep versus the government.
But it's laughable to argue that the private sector is not in it to extract as much as possible from its customers.
ProPublica's series on the nasty ways TurboTax fooled its customers to extract more money from them is a clear example: https://www.propublica.org/series/the-turbotax-trap https://www.propublica.org/series/the-turbotax-trap
Edit: I think some commenters are missing my point here. I'm not agreeing with this spokesperson. I'm saying that it's disingenuous to argue that the government is trying to fleece consumers when it's clear that the private sector has been doing so for some time.
- bombcar 2y agoIt's not even correct - the IRS wants to follow their rules as closely as they can. I have had the IRS unprompted send me an additional refund because of a mistake I made on my forms, and they caught. (They also included a letter saying that if I thought my mistake was right, I could fight the refund, or file a new amended form and go for a bigger one.)
- kbolino 2y agoI have had the IRS charge me tax and accuse me of lying to them over a UTMA withdrawal used to pay for tuition even though the fund running the account refused to send me the paperwork because the account is in my parent's name first instead of mine. It is a massive organization filled with uncoordinated people doing their level best to produce Brownian motion.
- gamblor956 2y agoUTMA withdrawals by the child are not taxable, however UTMA income is taxable to the child... What exactly are you railing against? It sounds like the IRS is following the rules here.
- kbolino 2y agoIf the income is taxable for me, but I get no form in the mail and can't even request one (because it's not my account), then how was I supposed to file a correct tax return in the first place?
- iends 2y agoIsn't that an issue with who provides the UTMA account?
- kbolino 2y agoMaybe? I would think this would be a legal requirement and not something they have discretion over. Zooming out though, I think Direct File or something like it is actually the right way to go. This would never have happened if the IRS just told me what it expected of me instead of playing this weird entrapment game where I was expected to tell them what they already know.
- larkost 2y agoThat sounds like you are agreeing with the post you are replying to: the IRS is trying very hard to stick to their rules. You have a deduction that neither you nor the IRS have paperwork for (since the fund is not acknowledging it as a covered expense), so they are following the rules. I can understand how you are frustrated about the situation, but this does not seem to me to be random behavior, but rather straightforward rule following.
- kbolino 2y agoIf following the rules looks like there are no rules, what is the purpose of the rules?
- selimthegrim 2y agoNo Country For Old Men: IRS edition
- lcnPylGDnU4H9OF 2y agoTo be fair, that's also the kind of thing Intuit would love to catch since it will make them look good (as they bill people for the privilege of filing taxes, of course).
- bombcar 2y agoThe taxes had been filed via TurboTax - I had fatfingered some data entry (so it's not really Intuit's fault they didn't catch it). The IRS had the data from other sources.
- downut 2y agoI have done[1] my own taxes most years over the last 4 decades, but only in the last few years has the Federal IRS fixed my errors for me and sent me more money[2] than I expected. Pretty cool. I moved house from AZ to GA in 2022 and both State revenue departments refunded me more than what I expected from filling out the partial year forms. GA was almost double[3]. The move included a corporate 6 figure relocation package, with all the fraught income tax issues with that. A lot of anxiety... just dissipated. [1] I download the pdf forms and instructions and just fill them out, and if I have to I print 'em out and mail 'em in. [2] I try hard to keep refunds to a minimum, certainly less than $1K. [3] My partner and I puzzled over the GA instructions for quite some time, which are impressively ambiguous. I could make an argument for 3 different scenarios given the instructions, and we decided to go conservative and use the middle strategy. However the refunded amount did not match any of the scenarios I myself calculated!
- adrianmonk 2y agoSimilar story here. I had quit my job to return to college full time, but I worked for a few months that year. Turns out that qualified me for the Earned Income Tax Credit. This credit is supposed to encourage poor people to work instead of living off government assistance. I would have never thought to claim the credit because I didn't think of myself as low income. On a monthly basis, I wasn't. But because of working for part of the year, on an annual basis, for that tax year, I was. One day I got a letter from the IRS saying essentially, "Hey dummy, why didn't you claim this credit on your return? We fixed it for you. Here's a check."
- danans 2y ago> Zupkus said, adding that the IRS wants "to extract as much as possible from the taxpayer." The IRS doesn't want your tax dollars, they are just the mechanism by which the federal government enforces tax collection according to the law. I've gotten refunded by the IRS for taxes they found that I overpaid years ago. Neither I nor my accountant did anything to initiate that. I'm not alone in getting an unprompted refund.
- kindatrue 2y agoI've met people who thought that the IRS makes money from collecting taxes - like that employees there get a cut.
- skirmish 2y agoMaybe they were talking about the program where you report tax evasion and then once the missing money is collected you get up to 30% of it? That exists.
- danans 2y agoAccording to https://www.irs.gov/compliance/whistleblower-office https://www.irs.gov/compliance/whistleblower-office the whistleblower reward program is not available to employees of Department of the Treasury.
- skirmish 2y agoSure. But during a casual chat maybe somebody mentioned that reporting tax fraud can earn you money, and then somebody else assumed that they were talking about IRS employees even though they were not.
- causal 2y agoYeah, private H&R Block and Intuit have built empires on upselling their products to taxpayers.
- quickthrowman 2y agoThe IRS has no incentive to collect more than what you owe. If you overpay and the IRS discovers it, they will send you a refund.
- axus 2y agoIt would be a real problem if IRS employees were promoted / rewarded based on extra dollars collected. As far as I know it's all political & unionized.