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Virginia's Department of Taxation used to have a pretty decent online tax website. It was shutdown because of lobbying such as this. There was a year when no fr

Virginia's Department of Taxation used to have a pretty decent online tax website. It was shutdown because of lobbying such as this. There was a year when no free online filing so I took the extra effort to do a paper return that year. Even FreeFilableForms are run by the Free File Alliance which is part of the group that lobbies against the IRS and state taxation departments from doing their own filing websites for personal profit. So they make sure that their own free filing options are just good enough to be barely acceptable while making their paid (for filers with income over ~$58k) options seem much more attractive. Between this and intentional complexity of the tax system that hinders making the IRS more efficient and hides true tax rates that corporations and higher income people... I dunno, it's one of the blacker marks against America in this aspect of policy. But I've without doubt decide I'll try as hard as possible to never, ever pay a company like that to file tax returns.

Twirrim 12y ago
One of the craziest things is, it save their tax department money for every single tax filing done online vs paper. Paper takes an obscene amount of human hours to process in comparison. Online tax filings should at the very least be free, or even give you an extra tax deduction.
- dfc 12y ago
  Do you know of actual/estimated numbers for human/computer processed tax filings? It would be interesting to see how many minutes of human time are needed for the average paper return. I have a sneaking suspicion that the "human touch time" is not "obscenely high."
  - ajcarpy2005 12y ago
    It's subjective. But also I assume error rates are higher for those who file paper forms vs electronically.
    - dfc 12y ago
      I assume that error percentage is not the only difference between paper/e-filed returns.
  - clogston 12y ago
    IRS estimates an e-filed tax return will have the refund issued within 21 days. The paper form equivalent takes 6-8 weeks. Source: http://www.irs.gov/taxtopics/tc152.html http://www.irs.gov/taxtopics/tc152.html The other thing to know is that e-filed tax returns are subject to an immediate sanity check (i.e., has this ssn already been used?, is this a valid zip code?), which doesn't exist for paper forms.
    - lstamour 12y ago
      In Canada, 8 business days vs. 4-6 weeks: http://www.netfile.gc.ca/fq_rfnd-eng.html http://www.netfile.gc.ca/fq_rfnd-eng.html For me, personally, it was 7 business days this year, and I did the filing in all of an hour and a half, in an afternoon. And that includes the time spent trying out two other free apps to decide which ones I liked better.
    - dfc 12y ago
      I appreciate the reply but I think time-to-refund is a terrible metric for estimating how much human touch time is involved in processing a return. What more do we know about human paper processing time per return than before? How much would your answer change if you found out that there are only two people processing paper returns? 2^32 people? What if you found out that the types of returns that are mailed in are 10x more complicated/detailed than e-filed returns? Would it change if you knew there was an intentional processing delay on paper returns to increase e-file adoption?
      - scott_s 12y ago
        I think it's a decent metric, and I'm surprised you don't agree. If we forget the "human time" part, it's a clear indicator of which method is more efficient.
        dfc 12y ago
        Given that you want to "forget the 'human time' part" I am curious what you think the metric is for. Maybe you meant to respond to a different comment. In this thread I had asked if anyone had any numbers/estimates for processing time. I wanted these numbers because "It would be interesting to see how many minutes of human time are needed for the average paper return."
- clogston 12y ago
  > One of the craziest things is, it save their tax department money for every single tax filing done online vs paper One of the HUGE benefits of e-file for them is that there are sanity checks that happen almost immediately and if they fail the IRS completely rejects the return. This does two things: 1. ensures accepted returns look much closer to accurate 2. places the burden of rejection notification on the e-file transmitter. For example, if I transmit a tax return that the IRS rejects due to a re-used SSN, the onus is now on me to notify that filer that their SSN has likely been stolen and provide customer service on what they should do next. From the IRS perspective this is a huge win. For e-file transmitters and tax software providers this is an un-fun problem to deal with.
  - Crito 12y ago
    > "IRS rejects due to a re-used SSN" Would they really do that? It seems like that would give you two problems. Your SSN was stolen and now you can't file your taxes too. The proper response would probably be to notify you, accept your documents (and the other documents presumably submitted by somebody else) tentatively, then do some investigation to determine which one is authentic.
    - clogston 12y ago
      Yes, indeed, they really do that. The person who has had their e-file reject must submit a paper return and call a special 800 number dedicated to this issue. It's a total double-whammy for the user. IRS tries to resolve these issues within 180 days... and if that delay of their return causes a financial burden they can file a petition. The wheels of progress turn slowly.
      - erichurkman 12y ago
        This is how a colleague of mine caught identity fraud. Someone had filed several fake tax returns with his information, called to have all of them invalidated as fake before submitting the "real" fake return, collecting the payment, and thus making it yet-harder for the real guy to claim the fake-but-not-fake was a false return.
- gk1 12y ago
  Not that crazy. This is seen and encouraged in startups all the time: Companies should charge for the value they provide, not for the man-hours they're spending. Additionally, anything that makes things significantly easier probably requires a large up-front investment of man-hours and/or money. If you've ever dealt with government software projects, you can imagine how large of a project this must have been. That money has to be recouped somehow, and that won't happen by giving things away for free. (Note: I'm not advocating for the sleazy behavior of lobbying against easier/cheap tax filing. I'm just making the case that there's business reasoning behind this, other than plain spite for the common folk.)
vorg 12y ago
> intentional complexity of the tax system But surely the purpose of the tax system isn't just to collect taxes but also to create employment. Intentional complexity keeps programmers employed, I mean the sort who aren't "developers" but the sort who instead work in firms whose business model is their computer system such as banks and insurance companies.
- waqf 12y ago
  https://en.wikipedia.org/wiki/Broken_window_fallacy https://en.wikipedia.org/wiki/Broken_window_fallacy
rayiner 12y ago
> Between this and intentional complexity of the tax system that hinders Can you give me an example of this "intentional complexity?" The income tax is complex for two reasons: 1) it's inherently difficult to define "income" in a practical way; 2) it's a tool used to further all sorts of economic and political policies. The best class I took in law school was Federal Income Tax (I'm not a tax lawyer). It really showed me that things which seem unnecessarily complex, like depreciation schedules or the treatment of capital assets, exist to solve theoretical problems that can be analyzed mathematically. Finally, it's not like accounting, pursuant to GAAP, is simple. And it seems obvious, to me anyway, that tax law must be at least as complex as accounting.
- Shivetya 12y ago
  Surely we can define what is income, what is not, and how its treated for taxation purposes in less than seventy thousand pages? It is complex and it is intentional, this is how politicians reward those whom they appreciate and "punish" those who they do not appreciate. You can move from the non appreciated column through proper donations either directly or through advocacy groups or lobbying firms hiring the correct people. No, I am not being cynical, I wish I were
  - patio11 12y ago
    An example of the problem: Describe in appropriate level of detail what a "royalty" is and where it originates. Please note that you must be as robust against edge cases as a login form or you will cost the country hundreds of billions of dollars. If you can do this in under 100 pages, you're doing really well.
    - tomp 12y ago
      For those of us that don't know much about royalties, can you explain why is it any harder (accounting/tax-wise) than a variable-rate monthly subscription?
    - JoshTriplett 12y ago
      It doesn't matter what a royalty is or how it works, any more than it matters what any other income source is; it's a payment you receive. Why distinguish between royalties and other forms of income? The problem only gets complicated when you try to set policies using the tax code, to incent or discourage specific behaviors by making them more or less beneficial. A tax code that treated all sources of income as identical would get far simpler.
wiredfool 12y ago
The Free File Alliance has certainly improved over the past year. Previously, their system used Flash or Silverlight, and had horrible ui around tabbing between fields and copy/pasting. (Especially on the cap gains form). This year, they're running jquery, bootstrap, and a whole host of other html5 javascripty goodness. The usability went up for me.

Twirrim 12y ago

One of the craziest things is, it save their tax department money for every single tax filing done online vs paper. Paper takes an obscene amount of human hours to process in comparison. Online tax filings should at the very least be free, or even give you an extra tax deduction.

dfc 12y ago
Do you know of actual/estimated numbers for human/computer processed tax filings? It would be interesting to see how many minutes of human time are needed for the average paper return. I have a sneaking suspicion that the "human touch time" is not "obscenely high."
- ajcarpy2005 12y ago
  It's subjective. But also I assume error rates are higher for those who file paper forms vs electronically.
  - dfc 12y ago
    I assume that error percentage is not the only difference between paper/e-filed returns.
- clogston 12y ago
  IRS estimates an e-filed tax return will have the refund issued within 21 days. The paper form equivalent takes 6-8 weeks. Source: http://www.irs.gov/taxtopics/tc152.html http://www.irs.gov/taxtopics/tc152.html The other thing to know is that e-filed tax returns are subject to an immediate sanity check (i.e., has this ssn already been used?, is this a valid zip code?), which doesn't exist for paper forms.
  - lstamour 12y ago
    In Canada, 8 business days vs. 4-6 weeks: http://www.netfile.gc.ca/fq_rfnd-eng.html http://www.netfile.gc.ca/fq_rfnd-eng.html For me, personally, it was 7 business days this year, and I did the filing in all of an hour and a half, in an afternoon. And that includes the time spent trying out two other free apps to decide which ones I liked better.
  - dfc 12y ago
    I appreciate the reply but I think time-to-refund is a terrible metric for estimating how much human touch time is involved in processing a return. What more do we know about human paper processing time per return than before? How much would your answer change if you found out that there are only two people processing paper returns? 2^32 people? What if you found out that the types of returns that are mailed in are 10x more complicated/detailed than e-filed returns? Would it change if you knew there was an intentional processing delay on paper returns to increase e-file adoption?
    - scott_s 12y ago
      I think it's a decent metric, and I'm surprised you don't agree. If we forget the "human time" part, it's a clear indicator of which method is more efficient.
      - dfc 12y ago
        Given that you want to "forget the 'human time' part" I am curious what you think the metric is for. Maybe you meant to respond to a different comment. In this thread I had asked if anyone had any numbers/estimates for processing time. I wanted these numbers because "It would be interesting to see how many minutes of human time are needed for the average paper return."
clogston 12y ago
> One of the craziest things is, it save their tax department money for every single tax filing done online vs paper One of the HUGE benefits of e-file for them is that there are sanity checks that happen almost immediately and if they fail the IRS completely rejects the return. This does two things: 1. ensures accepted returns look much closer to accurate 2. places the burden of rejection notification on the e-file transmitter. For example, if I transmit a tax return that the IRS rejects due to a re-used SSN, the onus is now on me to notify that filer that their SSN has likely been stolen and provide customer service on what they should do next. From the IRS perspective this is a huge win. For e-file transmitters and tax software providers this is an un-fun problem to deal with.
- Crito 12y ago
  > "IRS rejects due to a re-used SSN" Would they really do that? It seems like that would give you two problems. Your SSN was stolen and now you can't file your taxes too. The proper response would probably be to notify you, accept your documents (and the other documents presumably submitted by somebody else) tentatively, then do some investigation to determine which one is authentic.
  - clogston 12y ago
    Yes, indeed, they really do that. The person who has had their e-file reject must submit a paper return and call a special 800 number dedicated to this issue. It's a total double-whammy for the user. IRS tries to resolve these issues within 180 days... and if that delay of their return causes a financial burden they can file a petition. The wheels of progress turn slowly.
    - erichurkman 12y ago
      This is how a colleague of mine caught identity fraud. Someone had filed several fake tax returns with his information, called to have all of them invalidated as fake before submitting the "real" fake return, collecting the payment, and thus making it yet-harder for the real guy to claim the fake-but-not-fake was a false return.
gk1 12y ago
Not that crazy. This is seen and encouraged in startups all the time: Companies should charge for the value they provide, not for the man-hours they're spending. Additionally, anything that makes things significantly easier probably requires a large up-front investment of man-hours and/or money. If you've ever dealt with government software projects, you can imagine how large of a project this must have been. That money has to be recouped somehow, and that won't happen by giving things away for free. (Note: I'm not advocating for the sleazy behavior of lobbying against easier/cheap tax filing. I'm just making the case that there's business reasoning behind this, other than plain spite for the common folk.)

vorg 12y ago

> intentional complexity of the tax system But surely the purpose of the tax system isn't just to collect taxes but also to create employment. Intentional complexity keeps programmers employed, I mean the sort who aren't "developers" but the sort who instead work in firms whose business model is their computer system such as banks and insurance companies.

waqf 12y ago
https://en.wikipedia.org/wiki/Broken_window_fallacy https://en.wikipedia.org/wiki/Broken_window_fallacy

rayiner 12y ago

> Between this and intentional complexity of the tax system that hinders Can you give me an example of this "intentional complexity?" The income tax is complex for two reasons: 1) it's inherently difficult to define "income" in a practical way; 2) it's a tool used to further all sorts of economic and political policies. The best class I took in law school was Federal Income Tax (I'm not a tax lawyer). It really showed me that things which seem unnecessarily complex, like depreciation schedules or the treatment of capital assets, exist to solve theoretical problems that can be analyzed mathematically. Finally, it's not like accounting, pursuant to GAAP, is simple. And it seems obvious, to me anyway, that tax law must be at least as complex as accounting.

Shivetya 12y ago
Surely we can define what is income, what is not, and how its treated for taxation purposes in less than seventy thousand pages? It is complex and it is intentional, this is how politicians reward those whom they appreciate and "punish" those who they do not appreciate. You can move from the non appreciated column through proper donations either directly or through advocacy groups or lobbying firms hiring the correct people. No, I am not being cynical, I wish I were
- patio11 12y ago
  An example of the problem: Describe in appropriate level of detail what a "royalty" is and where it originates. Please note that you must be as robust against edge cases as a login form or you will cost the country hundreds of billions of dollars. If you can do this in under 100 pages, you're doing really well.
  - tomp 12y ago
    For those of us that don't know much about royalties, can you explain why is it any harder (accounting/tax-wise) than a variable-rate monthly subscription?
  - JoshTriplett 12y ago
    It doesn't matter what a royalty is or how it works, any more than it matters what any other income source is; it's a payment you receive. Why distinguish between royalties and other forms of income? The problem only gets complicated when you try to set policies using the tax code, to incent or discourage specific behaviors by making them more or less beneficial. A tax code that treated all sources of income as identical would get far simpler.

wiredfool 12y ago

The Free File Alliance has certainly improved over the past year. Previously, their system used Flash or Silverlight, and had horrible ui around tabbing between fields and copy/pasting. (Especially on the cap gains form). This year, they're running jquery, bootstrap, and a whole host of other html5 javascripty goodness. The usability went up for me.