IRS will study free tax filing options

toomuchtodo 3 years ago |

> Unlike many developed countries, the U.S. does not offer free tax filing services for taxpayers, who instead pay billions of dollars every year to highly profitable private tax prep companies.

> The industry has tried to block or subvert a government free tax filing system for decades. ProPublica has reported for years on how companies have sometimes even tricked customers into paying for services that they should have gotten for free. Those articles led to investigations by federal agencies and states as well as a barrage of consumer legal actions. The reporting was also cited by Senate Finance Committee chair Ron Wyden, who was behind the new provision. The companies maintain they did nothing wrong.

Propublica has really done a tremendous job driving this forward.

cheeselip420 3 years ago |

Any government bureaucracy with forms and worksheets should be 100% replaced with software. Change my mind. I do think api.irs.gov would be terrifying though given the ACA debacle...

Note that I'm not saying we don't need agents or enforcement or anything like that - I mean the paper-pushing, form-filing bullshit that eats up countless hours of time.

tonfreed 3 years ago | |

In theory yes, but every time I see a department trying to do this they inevitably hire a big four firm to do it for them and waste billions to get an inadequate application delivered 3 years late that no one uses

boppo1 3 years ago | |

I use Free fillable forms + instructions. There are too many edge cases for software to catch. If they just cleaned up the freefillableforms.com ui to look like it's from this decade and perhaps auto-find relevant instructions, it would be the best possible tax experience.

Rackedup 3 years ago |

How about automated filling options....

vkou 3 years ago | |

This. I'd happily pay the IRS $30 if they could send me an itemized tax bill, that I could either attest to and pay or contest.

They have all the information they need on me, they double-check my work, just do away with the whole dog and pony show.

landemva 3 years ago | | |

> do away with the whole dog and pony show.

Eliminate the personal income tax. Everyone in personal tax side of HR Block and IRS can find some other career which is useful. Rake the beaches or something.

mangoTangoBango 3 years ago | | |

Just do a 10% flat federal sales tax + negative income tax if below a certain threshold.

But this is way too logical for the main political parties to implement.

sillystuff 3 years ago | | |

> 10% flat federal sales tax

Rich folks only need so many mansions, yachts and designer sweat pants. This would further shift the burden of taxes onto lower income folks who spend 100% of what they earn.

The IRS could just present a form behind a login with an itemized fully calculated tax return with an accept? "yes" / "no". They already have all the information they need, and already do the work when checking returns for errors.

Taxes are a pain because both, corporate capture of government by powerful tax preparation companies and also because a certain political ideology wants paying taxes to be as unpleasant as possible to make the concept of taxes as unpopular as possible.

thisarticle 3 years ago | | |

> Rich folks only need so many mansions, yachts and designer sweat pants. This would further shift the burden of taxes onto lower income folks who spend 100% of what they earn.

This is a feature not a bug of that plan. There’s no amount of tax that’s too low when the answer to “How much do you need to be happy?” is more.

warning26 3 years ago | | |

Flat tax wouldn't solve the fundamental problem, which is making people calculate their own taxes.

In the vast majority of countries with personal income tax, everything is automatic and individuals don't need to do anything. Political parties in the US have an incentive to make things as complicated as possible to trick people into thinking ideas like a flat tax would be helpful.

landemva 3 years ago | | |

I would support federal sales tax (exclude uncooked food at grocery stores and some base amount of home energy use) if federal personal income tax is abolished and if sales tax is implemented and enforced by States (like the current road fuel tax which States collect and send part to feds).

Can't reply to a nearby comment, so -- few rich people have taxable personal income because they either don't receive W-2 income or they hire people to structure and pursue the deductions. In other words, yacht owners are rarely rich people and instead are owned by companies (controlled by rich people) so it is a business expense.

midoridensha 3 years ago | | |

Why would they want to do this? This would seriously hurt the corporate profits of Intuit (maker of TurboTax).

katdork 3 years ago | | |

why would anyone want intuit to have money they don't deserve to begin with?

oh no! think of the companies.

lol.

midoridensha 3 years ago | | |

Exactly! Why should the IRS care about taxpayers? Intuit's corporate profits are much more important to the IRS and the decision-makers in Congress that the taxpayers keep re-electing.

refurb 3 years ago | |

I lived in a country that did this.

I would get a message that my pre-populated form needed review.

I’d then track down all my statements that fed into those numbers - charitable deductions, payroll, retirement, investments. Then I’d sit down and add it all up to make sure the numbers were right.

Not a whole lot different than doing my own returns in the US.

Far simpler, of course, but not because the forms were filled out but because the tax code was just way less complex.

jleyank 3 years ago |

Hope they do something to simplify/speed up the current paper-based system. The last two years, 6+ months to process and get a refund. So much of a delay that they paid a reasonable amount of interest on the refund being held. Which, of course, must be filed as in come in the next year...

tonfreed 3 years ago |

I don't know if the US has the cultural impetus to automate a lot of this stuff. Here the ATO collect pretty much any transaction you do.

Your income is reported and taxes will be withheld from each paycheque, your bank gives them all your details, and your healthcare provider also provides reports.

I can imagine the average American would be uncomfortable with the required data collection.

boppo1 3 years ago |

Freefillableforms.com is almost perfect. Only problem is most people don't know it's there. Also it's a bit ugly/clunky.

diogenescynic 3 years ago |

"Study" meaning do the bare minimum until people forget about it.

rufus_foreman 3 years ago |

ProPublica of course are the supposed "reporters" who cooperated with criminals in the IRS to publicize private tax returns in order to serve their political agenda.

I do not trust ProPublica.

I do not trust the IRS.

I do not trust those who trust ProPublica.

I do not trust those who trust the IRS.

tonfreed 3 years ago | |

The US was founded on tax evasion, it's time to do your patriotic duty