10 ms·

Would You Let the I.R.S. Prepare Your Taxes?

52 points by scott_s 12y ago

pktgen 12y ago
> A racket is a service that is fraudulently offered to solve a problem, such as for a problem that does not actually exist, that will not be put into effect, or that would not otherwise exist if the racket did not exist. (http://en.wikipedia.org/wiki/Racket_(crime) http://en.wikipedia.org/wiki/Racket_(crime)) Can someone explain to me how this description does not apply to Intuit?
- maxerickson 12y ago
  The answer you aren't looking for is that Intuit doesn't actually control the US government.
  - pktgen 12y ago
    It's clear they have significant influence on this matter.
    - maxerickson 12y ago
      If you could convince legislators that their constituents cared about the issue (in meaningful numbers), the lobbying would be irrelevant. The lobbying just looks like a lot of influence because it is more noticeable than all the not caring.
      - sobkas 12y ago
        You know that people that use lobbying will almost always care more, because their money is on the line? Also they are willing to use that money to prove it?
        maxerickson 12y ago
        Yeah sure. What does that have to do with my comment? My point is that legislators are almost universally dedicated to keeping their jobs and will pretty much limit their responses to lobbying to the situations where it won't lower their chances of getting reelected.
        sobkas 12y ago
        Because they need contributions(direct and indirect) to get (re)elected or even able to be a candidate? And there are other ways to use money to influence this?
        maxerickson 12y ago
        The 2008 presidential election certainly showed the impact that pulling in the right electorate can have on the result of an election (in some literal sense, the Obama campaign got more people on their side to care enough to vote). I think that is the most powerful effect money can have on an election. I don't think campaign dollars have such a big impact on the elections of Senators and Representatives. Maybe Senators, but for representatives, the primary force right now is the shape of the districts. What I'd like to see is the removal of the special seats that the parties have at the table. Make it staged signature collection for everybody, for everything. (staged in the sense that 5 signatures would be enough to be the only name on the ballot but not enough to show up next to 3 other people that collected 1000+ signatures)
        sobkas 12y ago
        Shapes maybe indicate that Democrat or Republican wins, but doesn't indicate with one. With enough money you can outdemocrat any Democrat or outrepublican any Republican. After election they better play ball or next time no one will give them any money.
dredmorbius 12y ago
Hell yes please.
wtbob 12y ago
Of course I would, since they already do. Whatever I submit is checked by them anyway, and it's generally too expensive and painful to challenge them. So…why do I have to pay the Intuit tax every year?
- fnordfnordfnord 12y ago
  >So…why do I have to pay the Intuit tax every year? Because you choose to?
  - a3n 12y ago
    Because Intuit bribes, er contributes to, Congress.
    - exhilaration 12y ago
      How the Maker of TurboTax Fought Free, Simple Tax Filing http://www.propublica.org/article/how-the-maker-of-turbotax-fought-free-simple-tax-filing http://www.propublica.org/article/how-the-maker-of-turbotax-...
    - fnordfnordfnord 12y ago
      Intuit is obviously a parasite, but do you have to use their products?
      - a3n 12y ago
        I don't use their products, but gosh darnit they still keep bribing Congress.
- guan 12y ago
  In my country (Denmark) it has now become much easier to file taxes, and most taxpayers don’t need to do anything at all if the government prepared return does not need changes. Even before it became that easy, it was always possible to get a so-called “R75” statement before filing. R75 contains all the information that the tax authority has on you for a given tax year, including all filings from employers, banks, stock brokers, lenders, etc. That way it was easy to see if you missed anything and to double check the return. (Today R75 is easily available online.) IRS has a lot of information from W-2 and 1099 filings, but it’s not possible to quickly and easily get that. A FOIA or Privacy Act request would probably not be processed in time to be useful for a tax return, and it might raise suspicion. Mailing all the reported information to taxpayers, without pre-filling a tax return, would be a good first step to making tax time easier in the US.
1971genocide 12y ago
As an non-american this baffles me. Why is there so much distrust towards the government, police, and military in US ? Isn't the US the oldest democracy ? Society is built on trust - once that doesn't exist then nothing gets done.
- onion2k 12y ago
  Isn't the US the oldest democracy? No. Not by about 2500 years in ancient Greece.
  - jeletonskelly 12y ago
    Oldest, continuously and currently running, democracy.
    - pjc50 12y ago
      This is going to depend on the definition of "democracy". Iceland, the Isle of Man, and New Zealand all have strong claims. UK has constitutional continuity back to 1707 but neither the UK nor US had universal suffrage until the 20th century. http://www.theguardian.com/notesandqueries/query/0,,-80426,00.html http://www.theguardian.com/notesandqueries/query/0,,-80426,0...
  - acheron 12y ago
    Presumably the OP means "continually existing", though San Marino would dispute that claim too.
  - maxerickson 12y ago
    I think for the connotation in the parent comment you might say that the US became a democracy in 1920 or 1965 (but we still deny, for instance, children, the right to vote). (at least, I tend to think that the modern concept of democracy is bound up with self determination, something that ancient Greece sort of did not have, nor did the US when it was founded)
    - 12y ago
higherpurpose 12y ago
In other countries it's the employers that pay pretty much all of your taxes. They just keep the taxes from your salary and then when they pay their own taxes they also pay yours. I do think there's a slight disadvantage in having the taxes essentially "hidden away from you". This could be somewhat alleviated if instead of 10 different taxes there are just 2 or 3 at most, to make the whole thing more understandable. However, ultimately the benefit of having the taxes automatically done for you, not having to "get into trouble with IRS" or other such issues, is a much bigger benefit than the drawback of having the taxes somewhat hidden from you.
- desas 12y ago
  In the UK employers usually sort out taxes for you via the Pay As You Earn system. Everytime you get paid you will be issues with a payslip which shows how much you were paid before deductions (tax, student loans), a break down of the deductions and how much you earned after tax. The only tax you don't see is Employers National Insurance - this is a tax on employing someone that is around 12% of their wage.
- jakobegger 12y ago
  I live in Austria, where we have such a system. The money isn't hidden away at all, you get a letter every month detailing how much you paid income tax, health insurance, unemployment insurance, retirement plans etc. The big advantage is that you never have the chacne to spend all the money you have to save for taxes; makes budgeting a lot easier. Unfortunately, this only works correctly when you have a single employer. If you have multiple employers, you need to send a form to the authorities and they will determine how much you overpaid or underpaid. And if you're self-employed, you're on your own; you have to file your taxes yourself. But in that case most people hire a tax adviser to do it for them.
- rejschaap 12y ago
  I'm living in one of those other countries. My employer removes tax from my salary every month. But they just follow some guidelines. Our tax system is quite complex and my employer doesn't have enough information to know how much to send to the IRS. They can't even make a decent estimate, actually. So we still need to file a tax report every year. The guidelines and the system are set up so that most people pay too much tax in general. We do get our tax reports already filled-in by the IRS though. It's getting better each year. For now most people just check everything is there and whether it is correct and just sign and send (everything is done digitally of course).
fnordfnordfnord 12y ago
If it came with some sort of indemnity from audit penalties, and as long as I could amend or re-file with my own calculated return, yes.
- maxerickson 12y ago
  Do you mean indemnity against errors in the return, or would you also include indemnity against missed information? (The latter could conceivably include information that a taxpayer intentionally sought to hide from the IRS)
  - fnordfnordfnord 12y ago
    Indemnity against mistakes made by the IRS for sure; against the taxpayer intentionally hiding income, not so much. Then there is the whole problem of determining intent, but that's already a problem.
- masklinn 12y ago
  > If it came with some sort of indemnity from audit penalties Not really possible, after all you may have income streams you must declare which the IRS is not immediately aware of, and failure to declare those would be an audit failure. > and as long as I could amend or re-file with my own calculated return, yes. If it's anything like most of the developed world (which I'd expect), the tax authority's automated systems simply pre-fill the declaration with what they know, it's expected that the taxpayer will check and amend it, or ignore it entirely if you want to file "from scratch".
  - fnordfnordfnord 12y ago
    Of course it's possible. It may not be likely. >...the tax authority's automated systems simply pre-fill the declaration with what they know, That's the minimum that they ought to do, disclose what they know, and guarantee that they haven't provided you with incorrect information.
zamalek 12y ago
> If you’re a typical American and you get this packet from the I.R.S. that says, ‘Here’s what we’ve determined your liability is,’ no one is going to challenge it That's the biggest load I have ever heard. I have anecdotal evidence that the theory is incorrect (in South Africa we get filled-returns): all my friends validate, or pay someone to validate, their returns. Mr. Ellis has absolutely no evidence what-so-ever in support of his theory.
- _asummers 12y ago
  I would argue that the trend of Americans never challenging phone/cable bills suggests that his theory might hold some water, at least in the US. If the IRS shows a really good track record of not screwing them up in any way, people will just accept it as free money, only challenging when they owe money.
rayiner 12y ago
People saying "Intuit controls the government" are missing the forest for the trees. The IRS doesn't compute your taxes and send you a bill because then you'll forget you ever had the money in the first place. Lots of people want to make paying taxes painful, so once a year you have to spend hours facing the reality of how much money the government is taking from your paycheck.[1] Intuit just jumped on the bandwagon. It's a probably the most common lobbying tactic: support a position that politicians want to do anyway. [1] It works too. We love paying our taxes, but my wife and I have been stewing for a week about the patriarchal bullsht that is the marriage penalty. The problem is that the rage subsides by Election Day--they should move tax season to October.
- acheron 12y ago
  I would contend that's the opposite of what happens: most people get their taxes automatically withheld so they never saw the money in the first place, and then get a small refund after filing. If "we" wanted people to actually see how much money they were paying in taxes, we'd end automatic withholding.
  - mrsteveman1 12y ago
    It's been my understanding that a significant portion (perhaps approaching > 90%?) of the funding for federal spending during a specific year comes from those "pay as you go" sources, i.e. withholding and quarterly estimated tax payments for those not subject to withholding. If that's the case, wouldn't the end of withholding (and presumably also quarterly estimated payments since they serve the same purpose) leave the federal government with a serious inability to "pay the bills" throughout that tax year?
    - harryh 12y ago
      No. The gov't would just borrow against the expected revenue windfall in April. The problem is that people wouldn't save enough money to pay their taxes and wouldn't be able to pay. It's the same reason your landlord expects you to pay monthly and won't let you pay yearly.
  - 12y ago
Demiurge 12y ago
I have done taxes using the free way historically, on TurboTax. This year, I again opted for 'no charge' option, went though, and at the very end had to pay $104.00 without any explanation. I tried going back but I couldn't find if I had mistakingly selected something because they throw in payed options as you go. But I couldn't find or change anything, so decided to file instead of doing taxes the old fashioned paper way. I still have a bitter feeling, like I got scammed. I talked to a few friends and they had similar experiences, especially their older parents ending up paying more then a hundred dollars. I really hope IRS filing will happen, but with the amount of money they are skimming off poor folks and insider lobbying, I can't imagine it will.
- lostcolony 12y ago
  Time to switch to TaxAct?
  - Demiurge 12y ago
    Thanks for the pointer. Definitely, next year.
towndrunk 12y ago
I dumped TurboTax years ago... very happy customer of TaxAct.
astraelraen 12y ago
I am a CPA and unless you have dealt with the IRS over the long-term, I think most of America has no idea how incompetent the IRS is. You would be frightened if they prepared your taxes for any more than the simple return, ie some W2s. I would not even want the IRS to automatically prepare taxes for "simple" forms such as 1099-Int/1099-Div or 1099-B for stock sales. And I do not say that from a "job security" perspective for the tax work we do. The solution isn't government prepared taxes, it is less taxes.
- jeffasinger 12y ago
  I agree, and I stand no benefit in job security from not having the IRS do it. The IRS will assume that the entire 1099-B is income, even though your cost basis (and therefore actual income) is right on the form. That said, I'd love to see Intuit go away.
  - quesera 12y ago
    The 1099-B that you see is not always what the IRS gets. Specifically, cost basis is sometimes not reported. This will sometimes be noted on the form.
deleted 12y ago
[deleted]
kire456 12y ago
> Then Intuit mobilized against ReadyReturn, hiring lobbyists to oppose the effort in the capital and financing candidates who pledged to overturn it. > “People in other states who had been interested in it started saying, ‘We just don’t want to pick a fight with Intuit.’ ” Excuse me for not understanding US politics, but.. How is this not considered blatant corruption?
- TheCoelacanth 12y ago
  SCOTUS has decided that it's not corruption unless there is quid pro quo. In this case, the pro part is missing, because Intuit gave them money, and the politicians did something to benefit Intuit, but it can't be proven that Intuit gave them the money for doing it.
timedoctor 12y ago
This is a ridiculous idea. Might work for people who have a very simple tax return but the IRS could not possibly calculate my tax return it's incredibly complicated and is not based only on information that they have access to.
- UnoriginalGuy 12y ago
  So what you're saying is "It might work for 90% of the population with only a single job, but since it doesn't work for me personally, let's not."
- scott_s 12y ago
  I think you missed the actual mechanics of the proposal. The idea is that the IRS sends you something that says, "This is the information we have. This is what we think you [owe use | we owe you]. Sign and return if you agree." If you agree, then it takes you a few minutes and you're done. For many people, who have "boring" taxes, this would work great. But if you don't have "boring" taxes, then you could still do them yourself. The idea, though, is that relatively few people have to do this.
belorn 12y ago
I am a bit confused by the article, where it initial talks about how the system would be return-free, and that it would save everyone from doing record-keeping. But later, it talks about a system very similar to Sweden where tax returns has been prefilled with financial data, which people have to verify and sign. That system is not return-free and you still need to do record-keeping, since the numbers reported in by the employer could be incorrect.
hundt 12y ago
I volunteer through the IRS-funded program to help low-income people file their taxes.[1] I see a few dozen returns per year, and I don't know how representative they are of the "typical" return. I would say maybe 30% of them would be done correctly if they were filled out automatically based on what the IRS knows. The great majority involve one or more questions like: - (Education credit) When did you actually pay the tuition that your school reported to the IRS as "billed"? What kind of degree program are you in? - (Dependents) Did you provide most of your brother's support for the year? - (Earned income credit) Is your child a full-time student? - (Married filing separately) Is your spouse going to itemize deductions this year? - (Self-employed) What business expenses did you have? - (Obamacare) What months did you have health insurance for? Do you qualify for any of the exceptions for the individual mandate penalty? - (Mortgage interest deduction) Was this a home equity loan? - (Gambling income) Did you have any offsetting losses? As I said, I don't know how representative my sample is, but based on my own anecdotal experience, I just don't buy that the vast majority of people could have their return correctly prepared by the IRS without a TurboTax-like questionnaire. I would like to see more evidence for that claim. If we're talking about greatly simplifying the tax code, then that's one thing. Or if we're talking about the IRS developing their own version of TurboTax, fine. But the idea that "the government has everything they need and only lobbying from Intuit is preventing them from just doing your tax return for you" strikes me as highly suspect. [1] http://www.irs.gov/Individuals/Free-Tax-Return-Preparation-for-You-by-Volunteers http://www.irs.gov/Individuals/Free-Tax-Return-Preparation-f...
ern 12y ago
“It was a huge signal to politicians everywhere how much Intuit cares about this,” Mr. Bankman said. “People in other states who had been interested in it started saying, ‘We just don’t want to pick a fight with Intuit.’” Intuit is not a human being. It is a corporation. A legal fiction. It doesn't "care" about anything, nor does it have fights picked with "it". It can't autonomously decide to spend millions on lobbying. There are executives who make decisions to keep the tax system complex through lobbying, so that they can extract wealth from the rest of us and enjoy it for themselves and their families. I understand that this is a standard reporting convention, but reporters need to call the executives who make these decisions to account. They shouldn't go to corporate PR to do this. Once the media and public refuse to buy into corporate person-hood, we could see corporations behaving better.
- JoeAltmaier 12y ago
  Agreed. My litmus test is, unless you can name a person, then the statement of intent is meaningless. E.g. when I get emails from 'corporate HR' I delete them without reading them.
rmxt 12y ago
These comments should be merged with this submission: https://news.ycombinator.com/item?id=9381437 https://news.ycombinator.com/item?id=9381437
ende 12y ago
I always wondered why the IRS doesn't just deploy its own turbotax-like app. Then the fiasco with the health exchanges happened. So maybe government just doesn't do GUIs then. How about at least a RESTful API?

52 points by scott_s 12y ago

> A racket is a service that is fraudulently offered to solve a problem, such as for a problem that does not actually exist, that will not be put into effect, or that would not otherwise exist if the racket did not exist. (http://en.wikipedia.org/wiki/Racket_(crime) http://en.wikipedia.org/wiki/Racket_(crime)) Can someone explain to me how this description does not apply to Intuit?

maxerickson 12y ago
The answer you aren't looking for is that Intuit doesn't actually control the US government.
- pktgen 12y ago
  It's clear they have significant influence on this matter.
  - maxerickson 12y ago
    If you could convince legislators that their constituents cared about the issue (in meaningful numbers), the lobbying would be irrelevant. The lobbying just looks like a lot of influence because it is more noticeable than all the not caring.
    - sobkas 12y ago
      You know that people that use lobbying will almost always care more, because their money is on the line? Also they are willing to use that money to prove it?
      - maxerickson 12y ago
        Yeah sure. What does that have to do with my comment? My point is that legislators are almost universally dedicated to keeping their jobs and will pretty much limit their responses to lobbying to the situations where it won't lower their chances of getting reelected.
        sobkas 12y ago
        Because they need contributions(direct and indirect) to get (re)elected or even able to be a candidate? And there are other ways to use money to influence this?
        maxerickson 12y ago
        The 2008 presidential election certainly showed the impact that pulling in the right electorate can have on the result of an election (in some literal sense, the Obama campaign got more people on their side to care enough to vote). I think that is the most powerful effect money can have on an election. I don't think campaign dollars have such a big impact on the elections of Senators and Representatives. Maybe Senators, but for representatives, the primary force right now is the shape of the districts. What I'd like to see is the removal of the special seats that the parties have at the table. Make it staged signature collection for everybody, for everything. (staged in the sense that 5 signatures would be enough to be the only name on the ballot but not enough to show up next to 3 other people that collected 1000+ signatures)
        sobkas 12y ago
        Shapes maybe indicate that Democrat or Republican wins, but doesn't indicate with one. With enough money you can outdemocrat any Democrat or outrepublican any Republican. After election they better play ball or next time no one will give them any money.

dredmorbius 12y ago

Hell yes please.

wtbob 12y ago

Of course I would, since they already do. Whatever I submit is checked by them anyway, and it's generally too expensive and painful to challenge them. So…why do I have to pay the Intuit tax every year?

fnordfnordfnord 12y ago
>So…why do I have to pay the Intuit tax every year? Because you choose to?
- a3n 12y ago
  Because Intuit bribes, er contributes to, Congress.
  - exhilaration 12y ago
    How the Maker of TurboTax Fought Free, Simple Tax Filing http://www.propublica.org/article/how-the-maker-of-turbotax-fought-free-simple-tax-filing http://www.propublica.org/article/how-the-maker-of-turbotax-...
  - fnordfnordfnord 12y ago
    Intuit is obviously a parasite, but do you have to use their products?
    - a3n 12y ago
      I don't use their products, but gosh darnit they still keep bribing Congress.
guan 12y ago
In my country (Denmark) it has now become much easier to file taxes, and most taxpayers don’t need to do anything at all if the government prepared return does not need changes. Even before it became that easy, it was always possible to get a so-called “R75” statement before filing. R75 contains all the information that the tax authority has on you for a given tax year, including all filings from employers, banks, stock brokers, lenders, etc. That way it was easy to see if you missed anything and to double check the return. (Today R75 is easily available online.) IRS has a lot of information from W-2 and 1099 filings, but it’s not possible to quickly and easily get that. A FOIA or Privacy Act request would probably not be processed in time to be useful for a tax return, and it might raise suspicion. Mailing all the reported information to taxpayers, without pre-filling a tax return, would be a good first step to making tax time easier in the US.

1971genocide 12y ago

As an non-american this baffles me. Why is there so much distrust towards the government, police, and military in US ? Isn't the US the oldest democracy ? Society is built on trust - once that doesn't exist then nothing gets done.

onion2k 12y ago
Isn't the US the oldest democracy? No. Not by about 2500 years in ancient Greece.
- jeletonskelly 12y ago
  Oldest, continuously and currently running, democracy.
  - pjc50 12y ago
    This is going to depend on the definition of "democracy". Iceland, the Isle of Man, and New Zealand all have strong claims. UK has constitutional continuity back to 1707 but neither the UK nor US had universal suffrage until the 20th century. http://www.theguardian.com/notesandqueries/query/0,,-80426,00.html http://www.theguardian.com/notesandqueries/query/0,,-80426,0...
- acheron 12y ago
  Presumably the OP means "continually existing", though San Marino would dispute that claim too.
- maxerickson 12y ago
  I think for the connotation in the parent comment you might say that the US became a democracy in 1920 or 1965 (but we still deny, for instance, children, the right to vote). (at least, I tend to think that the modern concept of democracy is bound up with self determination, something that ancient Greece sort of did not have, nor did the US when it was founded)
  - 12y ago

higherpurpose 12y ago

In other countries it's the employers that pay pretty much all of your taxes. They just keep the taxes from your salary and then when they pay their own taxes they also pay yours. I do think there's a slight disadvantage in having the taxes essentially "hidden away from you". This could be somewhat alleviated if instead of 10 different taxes there are just 2 or 3 at most, to make the whole thing more understandable. However, ultimately the benefit of having the taxes automatically done for you, not having to "get into trouble with IRS" or other such issues, is a much bigger benefit than the drawback of having the taxes somewhat hidden from you.

desas 12y ago
In the UK employers usually sort out taxes for you via the Pay As You Earn system. Everytime you get paid you will be issues with a payslip which shows how much you were paid before deductions (tax, student loans), a break down of the deductions and how much you earned after tax. The only tax you don't see is Employers National Insurance - this is a tax on employing someone that is around 12% of their wage.
jakobegger 12y ago
I live in Austria, where we have such a system. The money isn't hidden away at all, you get a letter every month detailing how much you paid income tax, health insurance, unemployment insurance, retirement plans etc. The big advantage is that you never have the chacne to spend all the money you have to save for taxes; makes budgeting a lot easier. Unfortunately, this only works correctly when you have a single employer. If you have multiple employers, you need to send a form to the authorities and they will determine how much you overpaid or underpaid. And if you're self-employed, you're on your own; you have to file your taxes yourself. But in that case most people hire a tax adviser to do it for them.
rejschaap 12y ago
I'm living in one of those other countries. My employer removes tax from my salary every month. But they just follow some guidelines. Our tax system is quite complex and my employer doesn't have enough information to know how much to send to the IRS. They can't even make a decent estimate, actually. So we still need to file a tax report every year. The guidelines and the system are set up so that most people pay too much tax in general. We do get our tax reports already filled-in by the IRS though. It's getting better each year. For now most people just check everything is there and whether it is correct and just sign and send (everything is done digitally of course).

fnordfnordfnord 12y ago

If it came with some sort of indemnity from audit penalties, and as long as I could amend or re-file with my own calculated return, yes.

maxerickson 12y ago
Do you mean indemnity against errors in the return, or would you also include indemnity against missed information? (The latter could conceivably include information that a taxpayer intentionally sought to hide from the IRS)
- fnordfnordfnord 12y ago
  Indemnity against mistakes made by the IRS for sure; against the taxpayer intentionally hiding income, not so much. Then there is the whole problem of determining intent, but that's already a problem.
masklinn 12y ago
> If it came with some sort of indemnity from audit penalties Not really possible, after all you may have income streams you must declare which the IRS is not immediately aware of, and failure to declare those would be an audit failure. > and as long as I could amend or re-file with my own calculated return, yes. If it's anything like most of the developed world (which I'd expect), the tax authority's automated systems simply pre-fill the declaration with what they know, it's expected that the taxpayer will check and amend it, or ignore it entirely if you want to file "from scratch".
- fnordfnordfnord 12y ago
  Of course it's possible. It may not be likely. >...the tax authority's automated systems simply pre-fill the declaration with what they know, That's the minimum that they ought to do, disclose what they know, and guarantee that they haven't provided you with incorrect information.

zamalek 12y ago

> If you’re a typical American and you get this packet from the I.R.S. that says, ‘Here’s what we’ve determined your liability is,’ no one is going to challenge it That's the biggest load I have ever heard. I have anecdotal evidence that the theory is incorrect (in South Africa we get filled-returns): all my friends validate, or pay someone to validate, their returns. Mr. Ellis has absolutely no evidence what-so-ever in support of his theory.

_asummers 12y ago
I would argue that the trend of Americans never challenging phone/cable bills suggests that his theory might hold some water, at least in the US. If the IRS shows a really good track record of not screwing them up in any way, people will just accept it as free money, only challenging when they owe money.

rayiner 12y ago

People saying "Intuit controls the government" are missing the forest for the trees. The IRS doesn't compute your taxes and send you a bill because then you'll forget you ever had the money in the first place. Lots of people want to make paying taxes painful, so once a year you have to spend hours facing the reality of how much money the government is taking from your paycheck.[1] Intuit just jumped on the bandwagon. It's a probably the most common lobbying tactic: support a position that politicians want to do anyway. [1] It works too. We love paying our taxes, but my wife and I have been stewing for a week about the patriarchal bullsht that is the marriage penalty. The problem is that the rage subsides by Election Day--they should move tax season to October.

acheron 12y ago
I would contend that's the opposite of what happens: most people get their taxes automatically withheld so they never saw the money in the first place, and then get a small refund after filing. If "we" wanted people to actually see how much money they were paying in taxes, we'd end automatic withholding.
- mrsteveman1 12y ago
  It's been my understanding that a significant portion (perhaps approaching > 90%?) of the funding for federal spending during a specific year comes from those "pay as you go" sources, i.e. withholding and quarterly estimated tax payments for those not subject to withholding. If that's the case, wouldn't the end of withholding (and presumably also quarterly estimated payments since they serve the same purpose) leave the federal government with a serious inability to "pay the bills" throughout that tax year?
  - harryh 12y ago
    No. The gov't would just borrow against the expected revenue windfall in April. The problem is that people wouldn't save enough money to pay their taxes and wouldn't be able to pay. It's the same reason your landlord expects you to pay monthly and won't let you pay yearly.
- 12y ago

Demiurge 12y ago

I have done taxes using the free way historically, on TurboTax. This year, I again opted for 'no charge' option, went though, and at the very end had to pay $104.00 without any explanation. I tried going back but I couldn't find if I had mistakingly selected something because they throw in payed options as you go. But I couldn't find or change anything, so decided to file instead of doing taxes the old fashioned paper way. I still have a bitter feeling, like I got scammed. I talked to a few friends and they had similar experiences, especially their older parents ending up paying more then a hundred dollars. I really hope IRS filing will happen, but with the amount of money they are skimming off poor folks and insider lobbying, I can't imagine it will.

lostcolony 12y ago
Time to switch to TaxAct?
- Demiurge 12y ago
  Thanks for the pointer. Definitely, next year.

towndrunk 12y ago

I dumped TurboTax years ago... very happy customer of TaxAct.

astraelraen 12y ago

I am a CPA and unless you have dealt with the IRS over the long-term, I think most of America has no idea how incompetent the IRS is. You would be frightened if they prepared your taxes for any more than the simple return, ie some W2s. I would not even want the IRS to automatically prepare taxes for "simple" forms such as 1099-Int/1099-Div or 1099-B for stock sales. And I do not say that from a "job security" perspective for the tax work we do. The solution isn't government prepared taxes, it is less taxes.

jeffasinger 12y ago
I agree, and I stand no benefit in job security from not having the IRS do it. The IRS will assume that the entire 1099-B is income, even though your cost basis (and therefore actual income) is right on the form. That said, I'd love to see Intuit go away.
- quesera 12y ago
  The 1099-B that you see is not always what the IRS gets. Specifically, cost basis is sometimes not reported. This will sometimes be noted on the form.

deleted 12y ago

[deleted]

kire456 12y ago

> Then Intuit mobilized against ReadyReturn, hiring lobbyists to oppose the effort in the capital and financing candidates who pledged to overturn it. > “People in other states who had been interested in it started saying, ‘We just don’t want to pick a fight with Intuit.’ ” Excuse me for not understanding US politics, but.. How is this not considered blatant corruption?

TheCoelacanth 12y ago
SCOTUS has decided that it's not corruption unless there is quid pro quo. In this case, the pro part is missing, because Intuit gave them money, and the politicians did something to benefit Intuit, but it can't be proven that Intuit gave them the money for doing it.

timedoctor 12y ago

This is a ridiculous idea. Might work for people who have a very simple tax return but the IRS could not possibly calculate my tax return it's incredibly complicated and is not based only on information that they have access to.

UnoriginalGuy 12y ago
So what you're saying is "It might work for 90% of the population with only a single job, but since it doesn't work for me personally, let's not."
scott_s 12y ago
I think you missed the actual mechanics of the proposal. The idea is that the IRS sends you something that says, "This is the information we have. This is what we think you [owe use | we owe you]. Sign and return if you agree." If you agree, then it takes you a few minutes and you're done. For many people, who have "boring" taxes, this would work great. But if you don't have "boring" taxes, then you could still do them yourself. The idea, though, is that relatively few people have to do this.

belorn 12y ago

I am a bit confused by the article, where it initial talks about how the system would be return-free, and that it would save everyone from doing record-keeping. But later, it talks about a system very similar to Sweden where tax returns has been prefilled with financial data, which people have to verify and sign. That system is not return-free and you still need to do record-keeping, since the numbers reported in by the employer could be incorrect.

hundt 12y ago

I volunteer through the IRS-funded program to help low-income people file their taxes.[1] I see a few dozen returns per year, and I don't know how representative they are of the "typical" return. I would say maybe 30% of them would be done correctly if they were filled out automatically based on what the IRS knows. The great majority involve one or more questions like: - (Education credit) When did you actually pay the tuition that your school reported to the IRS as "billed"? What kind of degree program are you in? - (Dependents) Did you provide most of your brother's support for the year? - (Earned income credit) Is your child a full-time student? - (Married filing separately) Is your spouse going to itemize deductions this year? - (Self-employed) What business expenses did you have? - (Obamacare) What months did you have health insurance for? Do you qualify for any of the exceptions for the individual mandate penalty? - (Mortgage interest deduction) Was this a home equity loan? - (Gambling income) Did you have any offsetting losses? As I said, I don't know how representative my sample is, but based on my own anecdotal experience, I just don't buy that the vast majority of people could have their return correctly prepared by the IRS without a TurboTax-like questionnaire. I would like to see more evidence for that claim. If we're talking about greatly simplifying the tax code, then that's one thing. Or if we're talking about the IRS developing their own version of TurboTax, fine. But the idea that "the government has everything they need and only lobbying from Intuit is preventing them from just doing your tax return for you" strikes me as highly suspect. [1] http://www.irs.gov/Individuals/Free-Tax-Return-Preparation-for-You-by-Volunteers http://www.irs.gov/Individuals/Free-Tax-Return-Preparation-f...

ern 12y ago

“It was a huge signal to politicians everywhere how much Intuit cares about this,” Mr. Bankman said. “People in other states who had been interested in it started saying, ‘We just don’t want to pick a fight with Intuit.’” Intuit is not a human being. It is a corporation. A legal fiction. It doesn't "care" about anything, nor does it have fights picked with "it". It can't autonomously decide to spend millions on lobbying. There are executives who make decisions to keep the tax system complex through lobbying, so that they can extract wealth from the rest of us and enjoy it for themselves and their families. I understand that this is a standard reporting convention, but reporters need to call the executives who make these decisions to account. They shouldn't go to corporate PR to do this. Once the media and public refuse to buy into corporate person-hood, we could see corporations behaving better.

JoeAltmaier 12y ago
Agreed. My litmus test is, unless you can name a person, then the statement of intent is meaningless. E.g. when I get emails from 'corporate HR' I delete them without reading them.

rmxt 12y ago

These comments should be merged with this submission: https://news.ycombinator.com/item?id=9381437 https://news.ycombinator.com/item?id=9381437

ende 12y ago

I always wondered why the IRS doesn't just deploy its own turbotax-like app. Then the fiasco with the health exchanges happened. So maybe government just doesn't do GUIs then. How about at least a RESTful API?