Congress Is About to Ban the US Government from Offering Free Online Tax Filing - <AUTHOR> https://www.propublica.org/article/congress-is-about-to-ban-the-government-from-offering-free-online-tax-filing-thank-turbotax <comment><USER2> NPR's Planet Money just re-ran an episode[1] related to this. In 2005, California ran a pilot program where they sent simple, pre-filled tax forms[2] to a sample of the population. 98% of people liked them and would use them again. In 2006 it would have become standard for California, but failed in the legislature by a single vote. Opposition was from two factions: lobbying by Intuit, and Grover Norquist claiming that it violated a pledge for no new taxes. Fascinating stuff.

Later, California's Franchise Tax Board, went ahead and made it an option anyway, but hardly anyone knew about it. It was since been superseded by California's free online option: CalFile[3]. Of course, it's not that helpful if you have to go through the whole federal process anyway. But it serves as an example that it could work fine here in the states like the rest of the world if Congress would be willing to go for it instead of bowing to Intuit and Grover Norquist.

1\. [https://www.npr.org/templates/transcript/transcript.php?stor...](https://www.npr.org/templates/transcript/transcript.php?storyId=708195702)

2\. [https://en.wikipedia.org/wiki/ReadyReturn](https://en.wikipedia.org/wiki/ReadyReturn)

3\. [https://www.ftb.ca.gov/online/calfile/index.asp](https://www.ftb.ca.gov/online/calfile/index.asp)

<comment><USER3> I will say, vote with your dollars. If you don't like Intuit's lobbying, please don't feed the beast and use their services.

<comment><USER4> What are suitable alternatives? Aren't they the best in class, regardless of how shitty that class is?

<comment><USER5> I have used Credit Karma Tax since it came out (I think this year was 3 years) and it has been a great product and is free for both federal and state filings. Doesn't support some more complex scenarios, notably partial year and multi-state returns (you can still file your Federal return with it, though).

Edited to add additional details as to what isn't supported.

<comment><USER6> Have you compared to TurboTax? Is one better than the other at finding deductions?

<comment><USER5> I have not done taxes on both for the same year and compared the two. I have used TurboTax, as well as a variety of other online tax filing solutions, in the past. TurboTax might be better polished and provides better explanations, Credit Karma tax gets better every year, and I find the downsides to be a good trade off for not supporting Intuit.

<comment><USER7> I did my taxes in both last year (started in TurboTax and learned about their abuses - a coworker suggested Credit karma) and found the numbers to be identical. My taxes are relatively complex, more than most people. I'm very happy with the service for the second year in a row.

I admit that they don't have quite the community links that TurboTax does, and there are some situations they won't handle (for instance, income from 2+ states)

<comment><USER6> I have a friend who works there, and still didn't know they did tax stuff. I'll have to give it a try this weekend!

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER8> This is pure anecdote, but...

A NOAA employee told me about the time their boss caught holy hell from a Senator because the NWS had the gall to update a particular weather product they offered by adding color to the map. Evidently someone had a business essentially downloading the free NOAA data and improving it by coloring the maps and selling that as a product. When NOAA made it free, they called their Senator in anger. And said Senator slapped NOAA's wrist.

Seems like the same school of thought in a much bigger market.

<comment><USER9> Michael Lewis wrote about the NOAA and this exact type of thing in his last book. In essence the NOAA spends lots of tax payer money to collect weather data but can't do much with it other than give it away exclusively to a handful of entities that can repackage and sell it.

The eventual dystopian end state could be where the NOAA can't alert people to tornados and only those subscribing to a weather service would be alerted to get to safety.

<comment><USER10> You can get an emergency radio capable of receiving VHF NOAA weather alerts. There is typically at least one of the frequencies within range where ever you are. You can subscribe to weather alerts through RSS on their site as well.

[https://alerts.weather.gov/](https://alerts.weather.gov/)

You can even pass lat/long points to the forecast page and it will pull up the closest weather station, even points in the ocean work.

[https://forecast.weather.gov/MapClick.php?lat=43.4802&lon=-1...](https://forecast.weather.gov/MapClick.php?lat=43.4802&lon=-110.7624)

<comment><USER11> > You can get an emergency radio capable of receiving VHF NOAA weather alerts.

Apparently this was grandfathered in a long time ago. NOAA is only allowed to send weather reports by radio and on specific frequencies. Doing the same with the internet, why that would be communism!

<comment><USER12> And for the record, NOAA Weather Radio is pretty cool -- I like to get my weather from it when I'm at home.

I'm right in Boston, and I can pickup transmissions from the Blue Hill Observatory with my cheap Baofeng.

</comment></comment></comment></comment></comment><comment><USER13> Planet Money covered tax filing a few years ago and visited it again recently: [https://www.npr.org/templates/transcript/transcript.php?stor...](https://www.npr.org/templates/transcript/transcript.php?storyId=708195702)

My understanding is that the main opposition appears to be (1) the tax preparation lobby to protect their business interests and (2) anti-tax activists that believe that making people calculate their own taxes will make them more aware of how much they are paying in taxes.

The second argument blows my mind because I can't imagine that the set of people who would just pay the IRS without double checking their math are reviewing the tax filings from the third party they use right now. In other words, I would really like to see a survey of how people currently file their taxes in comparison to how they think they would if there was an IRS free filing for everyone or something like the ReadyReturn mentioned in the NPR story.

<comment><USER14> Yes, you're right that people in that camp are unlikely to review their tax filings from their 3rd party. However there is an incentive for that 3rd part tax company to save their customer as much as they possibly can. The bigger the refund, the happier the customer and the more likely they are to come back next year and give you more money. In the Planet Money episode they spoke with the Republican dude and his biggest point was that his goal was to support a system where people paid as little tax as possible, and this current system we have is just that.

<comment><USER15> If complicated taxes are a Republican anti-tax strategy, why did Reagan and the 1980s republicans pursue a strategy of vastly simplifying the tax code?

Doing taxes is a tax -- in hours and fees. Only the wealthiest people who can spend $10K on tax prep to save $100K via loophole deductions, oh.

<comment><USER16> Simplifying the tax code in the 80s was the public sales pitch. The real strategy was to dramatically cut taxes on the wealthy (e.g. by eliminating the top several marginal tax brackets).

But keep in mind, the Democrats controlled congress, so reform had to gain bipartisan support.

<comment><USER17> No-one paid the top brackets because the tax code at that point was riddled with ways to generate tax losses that reduced liability. The tax reform really was a good thing (unlike 90% of what happened under the Reagan administration)

[https://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986#Passive...](https://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986#Passive_losses_and_tax_shelters)

<comment><USER18> There is openly available IRS data on how many households actually paid highest bracket.

You are wrong that nobody paid it.

</comment></comment></comment></comment></comment></comment><comment><USER19> Oh man, I've had government provided automatic filings for ages now (Finland). US is really odd how it emphasizes the benefit of the middleman over the benefit of the individual citizen (it seems). Or have I completely misunderstood what's going on here?

<comment><USER20> The question I have is whether a government provided automatic filing would actually be cheaper (or more effective) than say, Turbotax.

I see a couple of ways in which it might not be as favorable:

1\. It costs more than $100 per tax payer per year to implement (about the cost of Turbotax). However the flat $100 or so that most people pay to Turbotax can be seen as a kind of regressive tax.

2\. It is less effective at finding the biggest possible return.

<comment><USER21> _> The question I have is whether a government provided automatic filing would actually be cheaper (or more effective) than say, Turbotax._

The question is valid, but the numbers do not add up. TT asks ~$50 for federal return. If everyone in US used the service, the cost would amount to over 16 billion dollars. That is more than the entire IRS budget[1] right now.

[1] [https://www.irs.gov/statistics/irs-budget-and- workforce](https://www.irs.gov/statistics/irs-budget-and-workforce)

<comment><USER22> Every single living person does not file a tax return. You can't just multiply the cost of preparing a return by the population.

<comment><USER21> It's an order-of-magnitude estimation. Turbo Tax offers multiple products with different prices. Even if you plug in more exact numbers and use the cheapest product you get a hefty sum of 9 billion (150M individual returns * $60). IRS total budget is 11.5 billion and they do way more than just process returns.

There is no way an e-File system run by IRS would costs _additional_ 9 billion dollars per year. They already do most of the calculation internally.

</comment></comment></comment></comment></comment><comment><USER23> What propublica left out:

To be clear the Intuit's of the world are not acting altruistically, however they've created an odd alliance with anti-tax advocates who 1. Think that any government provided system will favor the government over tax-payers and make it easier to sneak in stealth tax changes and 2. The anti-tax lobby cynically (and correctly) understands that in order to keep taxes unpopular, making them painful is useful.

<comment><USER24> >sneak in stealth tax changes

I don't think we exist in a world where this is possible.

<comment><USER25> I can imagine it happening. The US tax code is so complicated that most tax payers don't really understand it. Heck, most tax payers don't understand how marginal tax rates work or why having a large refund isn't actually a good thing. I can absolutely believe that a majority of people would accept a negative change to the tax code due to an inability to understand it, choosing to just accept whatever they're being told to make it all go away until next year.

<comment><USER26> Most tax payers can't multiply two fractions. It could be as simple as filling in 3 fields on a form, they'll still march down to Jackson Hewitt and pay someone hundreds of dollars to do it for them.

<comment><USER24> Which, IMO, is a failure at the government level.

Either make it so stupid easy a nearly illiterate child could do it, make it unnecessary (just have the IRS file for us), or massively improve the terrible state of the education system in the USA.

<comment><USER26> Or, just get rid of the income tax altogether as it's pretty draconian.

</comment></comment></comment></comment></comment></comment><comment><USER27> I've often read headlines noting that the tax-prep lobby spends huge sums to preserve the status quo. But the numbers quoted in the article as evidence don't appear to support that claim. $6.6m seems low relative to these figures [https://www.opensecrets.org/lobby/top.php?showYear=2018&inde...](https://www.opensecrets.org/lobby/top.php?showYear=2018&indexType=i) *

*I can't vouch for this site or its data

Relevant quote from the Tech Crunch article: "One reason why folks Congress could be pushing this through is all of the money that H&R Block and Intuit spent to lobby Senators and Representatives. ProPublica estimates that the tax prep industry has spent $6.6 million to advocate for the IRS filing deal. The Ways and Means chair, Neal, received $16,000 in contributions from the two companies in the last two election cycles, according to the ProPublica report."

<comment><USER28> The perrenial misunderstanding about lobbying in the US is that it's about money. It's not. It's about access. The money spent by lobbying firms is almost always in pursuit of that access. AKA buying a $10,000 plate at this donor dinner gets you a sit down with the Senator.

Not only do lobbyists get more accessible they get more credibility. The lobbyists are high paid lawyers at respected firms. They have degrees from respected schools. They have worked on the issue at discussion at lemgth. So when citizens are stacked up against these people they seem comparatively crankish.

This provision isn't in the bill because Intuit bribed someone. It's because that 6.6 million bought a lot of sit downs with committee members. Sit downs in which lobbyists told a convincing story of how it would actually be better for everyone of the IRS couldn't do this. Honestly they probably made some process argument for this. Something like it would get challenged in court anyway and be a big waste of money. Or about how you should make it illegal so the Executive Branch won't do it on their own and they'll have to take congressional input. And the lobbyist almost certainly believes whatever line their feeding the politicians.

It's like most broken things in life. No one is evil stuff just breaks.

<comment><USER15> Paying for access _is_ a bribe. What confuses people is that yes it really is incredibly cheap to bribe Congress and get crazy high ROI, because Intuit can get organized (it's already a corporation with management) afford $6Million in bribes but Americans for sane tax policy can't.

This is what "moneyed special interests" refers to.

<comment><USER29> Just to clarify something: if you pay $10,000 for a plate at a campaign fundraiser, that is not reported as lobbying expenditure. It would not be included in that $6 million number.

Only direct spending on lobbying gets reported as lobbying expenditure--not campaign donations. Direct spending on lobbying includes the salaries of registered lobbyists and their support staff, contractors and vendors to create reports and ads and websites, law firms to give advice, etc.

When you see "X company spend $6 million on lobbying," not one cent of that money went to the politician being lobbied, either directly or indirectly. At the federal level, a lobbyist cannot even buy a Subway sandwich for a member of Congress. It's a felony.

Campaign donations are reported separately. Those donations are sometimes done to enable lobbying, as the post higher in this thread correctly states. My point is just to clarify how the numbers get reported.

<comment><USER28> Oh yes, I did muddy the water there a bit thank you for the clarification.

</comment></comment></comment></comment></comment><comment><USER30> To me (as a Dutchman) this sounds crazy. Here in Holland the _only_ way to file your taxes as in individual (I don't know about company's) is to login to the government tax website (with my digid (a government issued digital identity)) and then to simply check if all the information that they have collected on me is correct. It usualy is.

All I have to add is my deduction items, and BAM! it's done. Also, we automatically pre-pay our taxes because it is calculated and payed for by all employers.

<comment><USER31> The dutch tax service even has a great slogan for this ideology: "Leuker kunnen we het niet maken. Wel makkelijker". Roughly translated, this means: "We can't make it nicer. But we can make it easier.".

Every year, they add some improvements to the entire system. They basically prefill your entire income and capital. Including stocks, dividends and other things. The only things you need to fill in yourself are some of your deductions (there are some which are prefilled as well).

They open the filing of taxes every year on march first. And every year there are lots of people who fill it in on the first day. This year there was even someone who handed their taxes in 18 seconds past midnight.

<comment><USER32> For those who are concerned about privacy: the banks are required to file your 1st of January balances and only the whole sum, not the specification and only the Social Security number in combination with the balances. You can specify more detailed (e.g. 'green' investments) but that is up to you.

</comment></comment></comment><comment><USER33> I just filed my taxes this morning.

I owe the government $4,600. I received an "underpayment penalty fee of $44" because I did not "pre-pay an estimated tax" each quarter. Something I have never done in the ~25 years I have been paying taxes.

Not only do they want the $4,600 by 4/15 they also want an estimated $1,200 "pre-payment" for 2019 by the same date or I will incur this same fee of $44 next year.Plus 3 more payments of $1,200 each quarter. So they want to hold my money without paying me interest. At least in my bank I earn more than the $44 penalty in interest each year.

This is bizarre. I surely didn't know about this nor did I read anything about new tax laws as I imagine most people don't.

<comment><USER34> Strictly speaking, you're holding _their_ money for a year without interest.

The estimated payments are not prepayments—they are payments that match what most W2 employees would pay every paycheck, but isn't the case for 1099 (or otherwise self-employed) individuals, since they don't have taxes withheld from their paychecks.

<comment><USER33> I get where you are coming from.

What if I have a baby in January or February? Then I would qualify for a deduction and then I am indeed overpaying them.

What if I lose my job? or get a job that is less money?

It's not their money unless I earn the money to pay them, IMHO.

It should go both ways.....why can't I ask them to estimate a refund then and give it to me in advance?

<comment><USER34> > It's not their money unless I earn the money to pay them, IMHO.

Of course—and in my understanding estimates account for this. If you earnings diverge such that you will not owe that money in the end, you don't have to pay it and won't face a penalty, as long as you've paid a certain percentage of your year-end tax liabilities.

And to be clear, I'm not arguing from principle. They should make it much easier and straightforward to pay and understand taxes regardless employment arrangement. However, in practice, they view estimated taxes (quarterly) or paycheck withholdings as required payments or they will levy penalties. :-)

<comment><USER33> I feel you. I'm not trying to argue with you at all :-)

I get both sides of the situation. It just seems the side of the tax payer doesn't matter.

</comment></comment></comment></comment></comment><comment><USER35> What's preventing a OSS solution to this? What I can think of off the top of my head:

* Lack of e-file permission

* Lack of any kind of legal recourse or audit protection for the user

* Constantly changing tax system

After a casual search on GitHub I see a few calculator projects but nothing serious.

I'd be down to help make a free competitor to Intuit. I see no reason to use a non-static site unless it's to keep previous years data, but that's iffy and sounds like it requires a whole other legal consideration.

<comment><USER36> The problem is that the system requires constant maintenance every time some tax law changes in any state, and great maintenance is something that only the most well funded OSS projects get. And you need participation from lawyers and accountants, not just software developers.

As the article notes, there are already free solutions for people with basic income situations (W-2, some bank interest, no stock sales) making under $66k. Personally, I don't mind paying $100 to turbotax for the peace of mind of knowing that at the very least, they have a staff of tax experts looking over the details of their filing process.

Now, if the IRS came along with an official app that showed me what information they already had and I just needed to make some small adjustments from there (assuming my tax situation isn't complicated), then yeah, I'd use that. And it's a bit crazy that we _don 't_ have that. But unlike many countries, we are taxed at both the federal and state levels, which makes the process much more complicated. And to complicate things further, the two interact: I can deduct some of my state taxes from my federal taxes (though less than before). And don't even get me started with the complications of a move from state to state.

EDIT: thinking about this a bit more. What really annoys me about the current system isn't necessarily that I pay to file my taxes. It's that it's so easy to miss things. Maybe i have a bank account that earned $12 in interest and I earned $20 from money that I put into lendingclub.com two years ago. It's annoying that the government _has_ this information, but on the other hand, it's very easy for me to not see (or forget about) the email/snail-mail that I got about this income and then forget to declare it on my taxes. Yes, I know that the IRS isn't sending me to jail for forgetting to pay $5 in taxes, but in general, the process would be much less stressful if I had some kind of centralized reminder of all the income I made.

<comment><USER37> Let the irs handle federal and let the states worry about their own.

<comment><USER36> The problem is that these two interact. You get a deduction on your federal return for your state taxes. There are those who want to eliminate this (and the 2018 changes significantly reduced this deduction), but doing so is--IMHO --unfair to those living in high tax states.

</comment></comment></comment></comment><comment><USER38> One thing I don't understand (possibly as a Canadian, possibly just as a conscious person) is how little it costs to bribe your highest-ranking politicians.

The article suggests that tax filing is an $11B industry and that companies spend ~$6M lobbying your corrupt senators. The _chair_ of the Ways and Means committee received ~$16k in donations from Intuit/H&R.

Wait, what?

Never mind how inexcusably transactional this political 69 sesh is... it's obviously table stakes for these people.

What I can't process is that $11B of revenue only spent $6M to bribe these guys. Why not spend $100M? Why not spend X? Are the senators just selling themselves short?

For perspective, $6M is like 10-12 totally normal homes on my totally normal suburban street.

If I was in the business of bribing politicians, I would allocate a lot more than $16k to the chair of the committee. Just saying. At least send all of his grandkids to the Ivy Leagues.

<comment><USER39> Maybe we can't comprehend it, the same way that I can't comprehend, say prostituting myself for money. If I consider the prospect, it would have to be for ridiculous sums. Yet everyday people are selling themselves for - from my point of view - a pittance.

I guess, if you're in the business of selling your principles (corrupt politician), you're suddenly competing with a wide pool of equally corrupt people, probably with cutthroat tendencies, who are willing to go cheaper than you and take your place? Could be that driven, principled, smart people are hard to find, but people willing to be corrupt politicians are dime a dozen and replaceable.

<comment><USER38> There's many different kinds of sex work, but the movie Indecent Proposal taught me that everyone has a price. My first question, if someone solicited me for prostitution, would be to clarify not how much but what would you like me to do? If you want me to sleep with your hot wife, my price is within reach. If you want me to be gangbanged in a public park, you probably can't afford it. All semantics aside, while I don't know anything about you, my gut tells me that most people would turn to prostitution with far less trauma both faster and more consistently than you might expect. In fact, it's really only the culture in the west that gets really uptight about pretending many romantic relationships aren't highly transactional.

Plus, my hope is that good citizens would make money selling sex long before they sell the trust of their electorate. It's only a morally bankrupt crime that could in some cases be treasonous if you get caught, right?

</comment></comment></comment><comment><USER40> Meanwhile, in my little country (NZ), as a regular salaried worker, I only had to interact with the IRD in the years that I had a few side gigs in addition to my regular employment.

Most years I don't interact with them at all. Don't even have to file.

I guess in the USA they are worried the IRS will get it wrong, so on the chance they will, everyone has to follow really complicated processes, even if their tax affairs are simple...Am I wrong?

<comment><USER15> The USA has "deductions", which are convoluted rat races where everyone does a bunch of paperwork so they all get a small discount which is cancelled out by higher overall rates. The IRS can't tell you which deductions to take, since they don't know your whole life situation.

It's the same structure that makes you pay 3% extra for everything you but so you can get 1-2% back as a credit card refund, and makes you get a supermarket loyalty card, and frequent flier miles, etc.

<comment><USER41> Australia has "deductions" and the filing forms are plenty complicated, doesn't stop them making a nice website with a free e-filing system.

For pretty much everything is prefilled, and you just double check from your own records, fill in the various deduction screens for whatever class of deductions you're claiming.

</comment></comment></comment><comment><USER42> I'm self employed and had to explain to my kids why taxes in the US were so complicated and took hours to do over the weekend.

There must be powerful forces at work because Republicans have touted a flat tax or a return the size of a postcard for decades but when they controlled all three branches of government couldn't get anywhere near enough votes to pass it.

It's truly an abysmal system and I hope my kids don't have to do a giant math problem every year when they're adults.

<comment><USER43> > There must be powerful forces at work because Republicans have touted a flat > tax or a return the size of a postcard for decades but when they controlled > all three branches of government couldn't get anywhere near enough votes to > pass it

They don't actually try to pass a flat tax because it is not feasible to actually do a flat tax in a country like they US with such a wide range of incomes. Even with a low rate, there will be people poor enough that paying the tax is a major hardship. So every even remotely serious "flat" tax proposal has some cutoff and only applies to income above that cutoff.

But then it is not actually a flat tax. It is a progressive tax with two brackets. Once you get there, it is really hard to come up with a convincing argument that two brackets is better than more brackets.

If the calculation wouldn't mystify most taxpayers, what would probably be the most sound theoretically would be a continuous bracket structure.

The other reason they don't do it is that the flatness of the rate structure has pretty much nothing whatsoever to do with the complexity of a tax return. If you changed the rate structure from a progressive rate with several brackets to an actual flat rate, or a more realistic two bracket progressive system, that would shave about 1/4 of a page off the several thousand pages of the tax code and tax regulations.

The complexity of it is all in figuring out which income is taxable. Once you've got all the income classified into the various relevant tax categories, the actual calculations where you use the rate structure is trivial.

<comment><USER44> Every flat tax proposal comes with a Negative Income Tax portion to counter regressitivity. People misunderstand what flat tax proposals are all about.

With a tiered tax system, individuals need to be the ones who pay taxes because people who combine income from multiple sources need to pay differing amounts of taxes. With a flat tax system, all income is treated exactly the same so governments can switch to collecting income taxes from corporations. Corporations basically report the amount they spend on payroll every year and pay some percentage of that as a tax to the government. _Then_ the government takes some portion of that money and remits it back to individuals as a negative income tax (essentially a UBI).

Flat tax changes the way money flows, instead of company -> individual -> government, it goes company -> government -> individual. It's both easier to tax corporations than individuals _and_ easier to give money to citizens than take money from citizens. These two powerful benefits alone are meant to make up for the severe rigidity and lack of flexibility that flat tax systems intrinsically have. It's an open question whether these two things are enough to make up for all the flat tax flaws but I don't think there's an obvious right or wrong answer that we've discovered yet.

<comment><USER45> Seems like it would harm job growth, because labor costs would increase for low wage jobs.

Also what about income from investment?

<comment><USER44> It's an open question whether anything would change between a company giving you $12/hr and a company giving you $8/hr and the government giving you (the equivalent of) $4/hr as a monthly lump sum.

Income from non-salary sources aren't generally covered by flat tax proposals because they're so complex and the existing tax system would still exist to deal with them. However, for the vast majority of citizens, salary is their only source of income and their experience with the government becomes "how much can I convince the government to give to me" rather than "how do I try to avoid the government from taking from me".

</comment></comment></comment></comment></comment><comment><USER46> Every time I pay for TurboTax I hate them even more for lobbying for this type of legislation.

<comment><USER47> Have you considered any alternatives? I use taxcut but have used sites in the past like taxbrain.

<comment><USER48> For the vast majority of people, filing your taxes by hand is so easy, I'm not sure why more people do not do it. It also has the side benefit of making the government pay more to collect your taxes.

The IRS is also extremely wonderful to deal with, and is happy to answer your questions. I've had questions about procedures before (even made a mistake), and you just call (or they call you) and you fix them.

<comment><USER49> > It also has the side benefit of making the government pay more to collect > your taxes.

Why would that be a benefit? It means more taxpayer money is _literally_ going to waste.

</comment></comment></comment></comment><comment> purple-again This is deeply frustrating. I can not tell you how many people I see paying $200-300 for some random "tax preparer" set up in a corner mall or the front of a WalMart simply because they do not understand there are a number of free resources that would prepare their 1040EZ for them at their income/complexity level.

These same people get back a $1500 "return" so they think they are getting a good deal. Its pure greed and theft from some of the most needy members of our society. Absolute shame on everyone involved in this process.

<comment><USER9> Apparently the $150 is worth it to these people over using their agency to google how they could file for free.

<comment><USER50> We can't assume rational agents.

<comment><USER51> Or perfect information. Or infinite time to acquire information.

</comment></comment></comment></comment><comment><USER52> I just filed my taxes in 10 seconds using the tax authority's smartphone app. It had pre-filled all my deductions such as interest using info reported from my employer and banks.

Apart from bribes from those who make tax software (which should be pretty easy to expose) I can't understand why congress wouldn't want to make paying taxes simple and efficient?

<comment><USER53> There is a podcast episode of "Planet Money" that goes into the history of this [1]. Pretty much it goes: If taxes were easy, people would hate them less, and not fight to abolish them - Grover Norquist.

1: [https://www.npr.org/sections/money/2017/03/22/521132960/epis...](https://www.npr.org/sections/money/2017/03/22/521132960/episode-760-tax- hero)

</comment></comment><comment><USER54> > The Free File Alliance, a private industry group, says 70% of American > taxpayers are eligible to file for free. Those taxpayers, who must make less > than $66,000, have access to free tax software provided by the companies. > But just 3% of eligible U.S. taxpayers actually use the free program each > year. Critics of the program say that companies use it as a cross-marketing > tool to upsell paid products, that they have deliberately underpromoted the > free option and that it leaves consumer data open to privacy breaches.

During the years I was eligible for this program, I used TurboTax for free through it and it worked fine. It was a basic version that didn't support complex transactions such as capital gains but for most people making under 66k it would have worked fine.

Very interesting to see only 3% use it. It would probably work well for a lot more of those 70%.

The paper forms are also easy enough to do manually, but can't be e-filed and so the refund comes slower.

<comment><USER55> This statistic is misleading. Throughout the filing process consumers are bombarded with opportunities to upgrade to a paid tier. They make paying more the default option and demote the controls to continue using the free version to have secondary or cancel-like styling. I had to constantly back out and go back to the free version, because I accidentally opted into a paid tier.

Another reason might be that "automatically" filling in your details from uploaded / linked documents is often a paid feature. I uploaded a doc it asked for, it showed me the info, then when I opted for the free tier it cleared the data and made me type it in myself.

<comment><USER56> Turbotax is a pioneer of dark patterns. Enter anything beyond a w2 and it wants $70.

</comment></comment></comment><comment><USER57> If I read this right, you can still use the free service the IRS provides if you make less than $66,000.

Has anyone used Turbo Tax or H&R "free" versions to file? I can't use them & last time I tried they charged you to submit your taxes electronically but otherwise it was simple & easy.

I also know many cities offer services to help people file simple taxes for free.

I believe this bill also states the IRS cannot send debt collectors after people making less than $66,000.

This bill may not be as bad as it looks. I don't expect the IRS to make software for complicated taxes as that's a very difficult challenge. I question if it's necessary to bar it, but I'm guessing that was to keep their deal with the Free File software.

Either way it would be nice to see representatives state their position & reasoning behind this bill. It seems it has wide support across the aisle which is rare these days.

<comment><USER58> > If I read this right, you can still use the free service the IRS provides if > you make less than $66,000.

You did not. You can contact the private companies such as H&R Block and request _Their_ free service if you make less than 66k - and subject yourself to their upselling and scam artistry, to try and get you to pay anything more than "free."

> I don't expect the IRS to make software for complicated taxes as that's a > very difficult challenge

The vast majority of people file extremely simple taxes, as they're salaried workers with minimal assets. Most first-world countries provide a pre- populated tax form with the relevant data (since your employer already submits it), for you to peruse, edit, and hit the submit button on. If other countries do it without a problem, I don't see why it's too technically difficult for us to do the same.

<comment><USER59> Exactly. W-2 and 1099 income is really straight-forward. If anything the IRS should provide ways for you to submit all your non-W2/non-1099 income to them and roll them up into a new form so that no matter what your situation you can "fetch" your current returns, sign them, and submit them. No need for third- parties at all. Any additional complexity is a symptom of rent-seeking IMO.

<comment><USER15> You are saying that IRS should write a TurboTax competitor.

<comment><USER59> Honestly if a company exists solely to solve an inefficiency they lobby to create, that's not something I care to defend. Taxes are in the public interest and as such profit is just not a concern of mine. There's plenty of other ways to make money than regulatory capture and rent seeking. I want the IRS to do what's best for Americans and that is either providing a way to file free of charge or eliminating the complexities of the tax code. I don't care which.

<comment><USER60> The IRS isn't authorised to simplify the tax code, it would have to be Congress.

<comment><USER59> Fair point. I guess that just leaves a free filing tool :)

</comment></comment></comment></comment></comment></comment></comment><comment><USER61> One rather insidious thing about H&R Block's online tax filing website is that, once the hapless user has chosen to have a real human "tax pro" review their tax return (for an additional fee), _the user cannot un-choose it!_ The website does not offer you that choice.

Even worse, when the user calls the H&R Block help number, a computerized voice does offer the user the option to downgrade, but notes that it will _have to delete all of the data the user entered!!!_

Talk about sleazy.

<comment><USER62> Is not sleazy. They have two systems but no export from one to the other and why should they? It's free.

You build it for free.

<comment><USER61> No. It really is sleazy. I'm talking about a situation where the user _is_ paying for the H&R service. This is a paying customer, not a free user.

This user then adds a tax pro review service but decides later that they do not want that add-on service. But now the user cannot remove that added-on service on the H&R website. The user calls in to an automated phone line which tells the user that, in order to downgrade, the system must clear out all of their data.

<comment><USER62> The free system is a different system built by a different team. Integrating the two systems would be a nightmare.

Don't attribute to maliciousness what can be attributed to incompetence.

</comment></comment></comment></comment><comment><USER63> If you follow down the original on ProPublica and find comments there, you will see that there was no such provision. And the one that actually referencing IRS is says that IRS should continue to cooperate with private sector to make free tax filing and must maintain free portal. I would like to see actual provision to which this website referencing, otherwise it is click bait.

<comment><USER64> It's in the referenced contracts.

That statute states IRS should continue the program (67 Fed. Reg. 67247), "including any subsequent agreements and governing rules established pursuant thereto."

In 67 Fed. Reg. 67247: "During the term of this Agreement, the IRS will not compete with the Consortium in providing free, on-line tax return preparation and filing services to taxpayers."

<comment><USER65> Yeah, and unless the IRS has imminent plans to implement free tax filing this new clause has no real effect. It's not a constitutional amendment, if the IRS wants to offer this service in 5 years they'll probably need a huge multi-year appropriation and this clause to be revoked. Adding it in to this bill costs nothing and probably made the GOP reps willing to sign on.

<comment><USER64> Of course IRS can go back to congress and revoke this.. Yes, this this make the GOP reps willing to sign on.

The question is: why we want this bill? It is not giving any benefit.

That's what "ban the IRS from creating a free e-filing system" means.

<comment><USER65> The bill has dozens of provisions around taxpayer protections. One of them is to affirm the Free File program. That's not the only thing in the bill at all.

</comment></comment></comment></comment></comment><comment><USER66> Headline is a bit misleading: The IRS does not currently offer free online tax filing, and bipartisan Congressional leaders are seeking to codify this status quo.

<comment><USER24> I am very confused - last night I filed my taxes in an hour flat on freefillableforms or whatever that terribly named piece of software is. I thought this was a service provided by the IRS?

<comment><USER67> I think freefillableforms.com -- maintained by the Free File Alliance -- is an example of what the article complains about:

> _The Free File Alliance, a private industry group, says 70% of American > taxpayers are eligible to file for free. Those taxpayers, who must make less > than $66,000, have access to free tax software provided by the companies. > But just 3% of eligible U.S. taxpayers actually use the free program each > year. Critics of the program say that companies use it as a cross-marketing > tool to upsell paid products, that they have deliberately underpromoted the > free option and that it leaves consumer data open to privacy breaches._

I've never used it so I wouldn't know if it's chockful of upsell adverts. It's certainly very hard (I couldn't do it, at least not in the past 5 minutes) to find a reference to the Free File Alliance on freefillableforms.com. But this is what is buried on IRS.gov:

[https://www.irs.gov/e-file-providers/about-the-free-file- all...](https://www.irs.gov/e-file-providers/about-the-free-file-alliance)

> _Free File offers a multi-year agreement between IRS and the Free File > Alliance to provide free service(s) to more taxpayers. Previously, free > offerings were not consistently available and were subject to modification > or discontinuation from year-to-year. With Free File, taxpayers have easy > access to IRS.gov, which offers a list of all free offerings on a single web > page. Under our agreement, Free File Alliance companies offer both free > preparation and free e-filing services. There is no cost to qualifying > taxpayers._

> _Note: We do not endorse any individual Free File Alliance company. While > the IRS manages the content of the Free File pages accessible on IRS.gov, it > does not retain any taxpayer information entered on the Free File site._

<comment><USER68> Free File Fillable Forms are pretty easy to use for anyone, regardless of income. It doesn't hold your hand and walk you through it, but assuming you can read English at a 4th grade level, I feel like you should be able to do it. Not that I think it should be even this complicated to do taxes, but it's not a terrible option.

[https://www.irs.gov/filing/free-file-do-your-federal- taxes-f...](https://www.irs.gov/filing/free-file-do-your-federal-taxes-for- free)

<comment><USER69> It's still maintained by the Free File Alliance. So you're giving your data to a third party that's not the government. I use it, but I would rather I didn't have to share my financial information with third parties to do so.

<comment><USER70> No matter what, you will always be using software and systems controlled by other entities. From you web browser, to the operating system, the data transport links, routers and switches in between, and when the data gets to the destination the software is typically written and maintained by commercial contractors hired by the government.

<comment><USER24> Right, but I would argue that this is more explicitly "putting my data on someone else's server." If it was a _government_ server, well, it's there already anyway.

</comment></comment></comment></comment></comment></comment></comment><comment><USER71> At least bipartisanship is not dead :-). The name also has a nice Orwellian touch "Taxpayer First Act".

</comment><comment><USER72> I feel sorry for people living in the US, how can they call this a democracy anymore? Demos means people. You are ruled by companies at this point.

<comment><USER73> Good thing they don't call it a democracy!

It's a republic. There's a meaningful difference.

<comment><USER74> If the most positive thing to say about the US political system is that it does not feature a monarch...

</comment></comment></comment><comment><USER62> I just fill out my taxes the best i can and submit it and if the irs corrects it I send them more or cash the check.

It's not hard and no accountant had ever dabbed me more than they cost.

If you can code you can fill out a form. Every year I day in going to automate it but it's easier to just fill out the forms.

I'm looking forward to an audit for the free tax advice.

Be legit. Stop worrying. Keep living.

</comment><comment><USER75> You know, I get the uproar about this, but I'd like to put one thought into your heads before you respond:

Imagine, as complicated as tax forms are, and as obtuse as the IRS instructions are compared to TurboTax.

Now imagine the government puts up a website for you to file your taxes.

Do you really want to use that? Do you think it will be as easy to use? Do you think you'll have a nice wizard to walk you through it? Will it be faster than TurboTax?

Now, a year or two after their site has come out, and TurboTax has seen a huge drop in revenue (they don't know it, but it's only temporary), they decide to shut it down because they can't compete with both free and "government guaranteed" even if the site sucks.

Will you be happy then?

Seriously - I get the frustration of the current situation, but if you've ever done it on paper and have anything other than the 1040EZ form, this should give you pause.

<comment><USER76> Then why crush the option? Let the market determine it. If Intuit's product is so much better then it will win.

<comment><USER75> Because the free-priced government option will drive out the non-free commercial providers. Even if this only lasted a few years, it would put some of them out of business.

In other words, for the same reason we have laws against unfair competition.

<comment><USER77> The U.S. used to primarily have for-profit firefighting. Switching to a state- run system drove out the commercial providers. And that's by all accounts, a wonderful thing.

Business for the sake of business is not necessarily good. If the business does not provide real value any longer, it shouldn't exist.

<comment><USER75> So why not have the government run everything then?

Government for the sake of government is never good.

<comment><USER77> Who are you arguing against? I never suggested anything of the sort.

Some things lend themselves very well to for-profit businesses. Others do not. Firefighting and filing your taxes _to the government_ strike me as two things the government can probably handle better than capitalists.

</comment></comment></comment></comment></comment></comment><comment><USER78> This is one of the best examples of the perverse incentives that lobbying from some industries can turn into. Regardless of the arguments, government not competing with business, etc.. this is stupid. It requires a twisted viewpoint to think that making it hard to file taxes is a good thing.

</comment><comment><USER67> Related past HN threads:

[https://news.ycombinator.com/item?id=19392673](https://news.ycombinator.com/item?id=19392673)

[https://news.ycombinator.com/item?id=13853150](https://news.ycombinator.com/item?id=13853150)

</comment><comment><USER79> This is one of the more explicit examples where complexity is stealth- deliberately is promoted.

Tyler Cowen (and in his own way, david graeber) made a point that really stuck with me. Badly paraphrased:

The introduction of PCs & software to the office, _has not increased office worker productivity at all._ It's very hard to define or measure white collar productivity, but to the extent that it can be measured... it hasn't improved. From another angle, university administrations, tax collectors, accountants, legal departments, international customs agencies, etc. have as many or more people and don't seem to be producing a whole lot more.

To paraphrase Graeber's more beligerent take on it: Getting more efficient at paperwork just produces more & more complicated paperwork.

</comment><comment><USER80> I'm confused because I can't tell what this actually refers to. It says:

> _Congressional Democrats and Republicans are moving to permanently bar the > IRS from creating a free electronic tax filing system._

But the IRS _already_ has one. I used it yesterday to fill out and e-file my taxes. It's "Free File Fillable Forms" (freefilefillableforms.com) that is basically an online replica of the tax forms, some fields get automatically calculated, but you have to manually calculate the actual level of tax you owe, and it's submitted electronically.

And all income levels can use it, unlike the free tier of commerical tax prep programs which are limited to below a certain income level.

I use it out of principle -- it's harder to use, closer to filling out tax forms by hand (unlike the "wizard"-type interfaces of commercial tax prep software), but I don't want to support the commercial solutions exactly because of lobbying like this.

So I can't tell what this bill aims to do specifically. Is it trying to get rid of Free File Fillable Forms, or is it preventing the IRS from building something better?

EDIT: Free File Fillable Forms is apparently a _private_ organization that the IRS website links to. In my years of using it, I'd always assumed it was provided by the government. Wikipedia clarifies:

"Another component of Free File is Free File Fillable Forms, which is available to all taxpayers, including taxpayers whose incomes are greater than $66,000. It is an alternative to Free File Software, although both are free. Free File Fillable Forms is operated by a private organization, the Free File Alliance and not the IRS. Though IRS links to it, they do not endorse it or any product... There are no income restrictions for using Free File Fillable Forms... It provides free electronic filing. Free File Fillable Forms is managed by the Free File Alliance." [1]

I'm still unclear, however, if there's pressure to get rid of this option that is free for everyone. I sure hope not.

[1] [https://en.wikipedia.org/wiki/Free_File#Free_File_Fillable_F...](https://en.wikipedia.org/wiki/Free_File#Free_File_Fillable_Forms)

</comment><comment><USER81> How about simplifying the tax code so we don't need computer programs at all?

<comment><USER82> Why? The more equitable the tax code the more complex it becomes. And assuming you're aiming for the most fair system I don't understand only applying our computational resources to rendering superheroes and recommendation engines, when we could scale the tax code complexity (and fairness) relative to our compute resources.

</comment></comment><comment><USER83> > The Ways and Means chair, Neal, received $16,000 in contributions from the > two companies in the last two election cycles, according to the ProPublica > report.

When companies make contributions like this, why don't politicians just take the money and then do whatever they want anyway? The companies have no recourse to complain or get the money back do they? How does this work?

<comment><USER84> House Representatives have 2 year terms. If you'd like to hold onto that job for longer than 2 years, you have to campaign again, which means raising money again. Do you think TurboTax is going to keep investing in a congressperson who isn't doing what they want?

<comment><USER85> This is why congress should be a conscripted service.

With a limit of two terms.... should only be able to vote to keep a certain person in office, but all persons in office should be selected just like jury duty.

Want to know how fucking retarded the world is. Do this. but at least it will diminish corruption from the likes of Pelosy and others who spend DECADES in their positions...

</comment></comment></comment><comment><USER86> This is so infuriating and needs to change. Ultimately the problem is our Congress who votes for this nonsense. It's a uniquely American problem, in most of the rest of the developed world tax filing doesn't require manual data entry, is quick (< 5 minutes), and free.

Made a video to help raise awareness of the problem and solution

[https://youtu.be/5YVnSVulQAE](https://youtu.be/5YVnSVulQAE)

</comment><comment><USER87> "The Ways and Means chair, Neal, received $16,000 in contributions from the two companies in the last two election cycles, according to the ProPublica report."

It's embarrassing and absurd how cheap it is to buy off congress from making everyone's lives easier. Can't a gofundme raise more than 16k to counter them?

<comment><USER88> Well that's quite a slippery slope... it's going to be corporations vs citizens in a bidding war making all politicians multi millionaires?

How about we go back to when politician wasn't a full time job, and you barely got paid for it? Make it illegal to pay politicians for any public services apart from a set nominal salary.

<comment><USER89> Just playing devil's advocate:

What if a fixed/low salary only attracts the already-rich whose interests will never be well aligned with the general public?

If you want superstar government that is the very best at what it is supposed to do, you need a superstar salary structure, something more like professional athletics. Our president should be paid millions (with complex incentive structures for measurable achievements), but under "at will" employment terms and accountable to the people.

<comment><USER90> Our presidents are alreay paid millions, typically billions. They just don't get it until after they leave office. Just look at the Obama's net worth. And of course Bill & Hillary pulling down 6 figures for giving a speech (that somebody else writes for them). I'd say they are paid pretty well already

<comment><USER89> Pay received after leaving office cannot by definition incentivize any behavior during the term.

<comment><USER90> Not sure what you mean. Politicians routinely do things while in office expecting a payoff later after leaving office. It's not always cash (in fact usually not), but certainly lucrative speaking engagements, often times board positions or "consultant" fees paid for very little work, professorships at prestigious universities (with 6 figure salaries despite teaching little or no courses), etc. The options are only limited by people's imagination.

</comment></comment></comment></comment></comment></comment><comment><USER91> Related to [https://www.peoplespolicyproject.org/2019/04/08/us- workers-a...](https://www.peoplespolicyproject.org/2019/04/08/us-workers-are- highly-taxed-when-you-count-health-premiums/)

Citizen overheads for essential services are as high or higher in the US as in mainstream developed nations, but laws dictated by corporations mandating (or making essential-in-practise) private provision clumsily hide them behind a fake 'low tax' banner.

Here in Aus our ATO makes the (dead simple) etax directly available to end users. Its popularity speaks for itself, and there'd be hell to pay if the ATO ever removed the service. Cf public healthcare etc - corporations are rightly scared of public provision. People like it & it's very sticky.

</comment><comment><USER92> In my country (Denmark) all companies reports everything to the IRS. Most people just have to review their numbers (on IRS website). Most people rarely has to alter that info or add to it. It is rare that a private person needs to hire an accountant to help with the tax filling.

<comment><USER93> Same in NL. I just press next-next-next-finish like I'm installing software in 2005.

</comment></comment><comment><USER75> While doing some research (trying to get my job done, too, but HN calls...) I found this:

 _If you make under $66,000 a year, filing your taxes online is probably free.

Every year only about three million people — of the nearly 100 million eligible — take advantage of the private partnership the Internal Revenue Service has set up with tax giants such as Intuit Inc and H&R Block Inc. to provide free tax preparation online, according to Tim Hugo, director of the Free File Alliance, which is made up of major tax preparers that manage the Free File program._

SOURCE: [https://www.marketwatch.com/story/how-to-file-your-taxes- for...](https://www.marketwatch.com/story/how-to-file-your-taxes-for-free- online-if-you-make-less-than-66000-a-year-2018-03-28)

</comment><comment><USER94> Something seems a bit off here - the article points to $6.6 million in lobbying and a direct contribution of $16,000.

The ROI on those costs must be stupendous! Say 100 Million people file taxes in the US, it doesn't take long to hit 10x or 100x returns.

Am I missing something? (I'm not from the US)

<comment><USER95> Aside from the free file program, which is a partnership with private companies, the IRS does offer a bare bones free fillable forms tax filing application.

For most filers with W2 income, there's nothing to it and they could easily do that. It's fairly simple and you just need to read the directions and do maybe a half dozen additions and subtractions.

Where the real return has come in is the millions, if not billions, of dollars that the industry has spent convincing consumers that taxes are super hard and complicated and open to tons of interpretation, that their tax filing experts know this ONE WEIRD TRICK to get you thousands back, and if you screw up even once the IRS is going to come after you hard and put a lien on your house and put you in jail. The reality is not like that at all - if you do screw up they are happy to help and it's actually pretty simple for most people. But this has engendered an incredibly deep mistrust of the IRS - most people would still taking their taxes to one of these firms or their local accountant because they'd be convinced they could get more back.

I'm not saying the system couldn't be even better for these filers, but it does require the federal government and the IRS to start collecting data they they don't right now, and the actual gain is pretty minimal in real terms - taxes for most filers is already incredibly easy and free. And the you've only solved half the problem - what about state taxes?

<comment><USER94> Ah yes I forgot the US has a separate state tax system. In Aus the federal government distributes taxes to the states (which of course is highly controversial amongst the state governments but the average person couldn't care less)

You can also claim back the cost of filing here I believe, so if you need to use a third party they are essentially paid by the government. Maybe that's why they make it so easy here?

</comment></comment></comment><comment><USER96> It's ironic that the 'postal mail' version is free but the online version costs money. Mindnumbingly aweful method of handling resources. Its much more convenient for the government and the tax payer to file electronically

</comment><comment><USER97> The number of people propsing a 3rd party take my data and advertise to me for the privlidge of paying money to the state need to rethink their position. No 3rd party sould even be useful, much less needed to satisfy your state and federal debts.

</comment><comment><USER98> This is pointless obstruction and ironically a waste of my tax money. You could easily have the government automatically complete your taxes for the simple cases and have software like TurboTax for the difficult ones.

To the people complaining about the possibility of a government run site being poor have you used TurboTax? I've used it twice now and will never use it again. The dark patterns, upselling and fake loading screens really obscured how simple my taxes actually were to do.

</comment><comment><USER99> This IMHO is the biggest issue the U.S. faces today, simply due to the fact that so many secondary issues stem from how conflicted lawmaking is in this country.

I don't know if it's the same way elsewhere. Maybe it is, and it just isn't as widely reported. But the fact remains that we _know_ this to be an issue and we're not campaigning enough to solve it.

The only other issue that I feel is as pervasive is the end of the Fairness Doctrine and the spiral into chaos that ensued.

<comment><USER100> One might argue if this is related to scale.

'Everywhere else' is usually < 30M people which is a totally different ballgame.

Can you imagine an EU level healthcare mandate? It'd be out of control impossible, and yet it works well enough a 'the state level'.

It'd be nice to see some really forward thinking states lead the way and forge a path, if a few caught on and there were material examples of 'how it could be done' then maybe there'd be hope.

<comment><USER101> Well, India's trying, maybe take a look there?

</comment></comment></comment><comment><USER102> This is totally backwards. Here the local gov't is encouraging people to use their electronic services so that they don't have to deal with endless stacks of paper forms.

</comment><comment><USER103> It's a little bizarre to me that the very act of paying an independent CPA to run through my taxes feels like a deliberate anti-regulatory capture decision, but there it is.

<comment><USER62> Imagine if the power company made YOU figure out how much you owed them every month.

</comment></comment><comment><USER104> Missing option #1: just don't collect income tax on 80% of people, since its not worth it. In this case, IRS would do automatic calculation, and if they say you owe nothing, you don't have to do anything.

Missing option #2: it is just foolish to trust the tax collector to tell you how much you owe. The only way this would possibly work would be radical simplification of the tax code. Since that is not going to happen...

</comment><comment><USER105> Where's the teeth in getting companies to offer a decent Free File option if you removed the threat that got them to create said programs in the first place?

</comment><comment><USER106> The government developing software to better interact directly with its agencies should be a mission of 18F and the individual agencies. Our Congress is thinking of doing the opposite.

Companies have no natural right to continue making money without competition from the government.

EDIT: Where does this ban the IRS from creating their own portal? It requires the IRS to continue the Free File Program, but does that explicitly bar the IRS from its own system?

</comment><comment><USER107> So basically congress is passing a tax to file taxes? ;)

</comment><comment><USER86> First of all this whole movement to keep taxes a pain in the ass to file is extraordinarily infuriating and uniquely American in its idiocy. I'm in South Korea now and filing taxes is as simple as logging into a website, entering your SSN, and verifying that the information is correct. Completely free and takes 5 minutes.

Second, I'm tired of people blaming TurboTax. The headline says "Thanks TurboTax". No, TurboTax does not vote on laws, our Congressmen do. If any Congressman is taking bribes and voting for this bullsh!t, then the Congressmen are at fault and need to be voted out of office.

I decided to take a quick look at the bill to see if it's really as outrageous as the article makes it, but I can't even understand what the bill says. It's like a 30 page document of legalese. Where in the document does it say that the U.S. would be banned from offering free tax filings? Why the hell do laws have to be written like this to be so overly verbose and indecipherable to anyone without a law degree? There should at least be a succinct summary at the top.

</comment><comment><USER108> Uhg, how do we stop this? Is it too late?

</comment><comment><USER109> I'm surprised more people aren't skeptical of the IRS themselves. Inverting the way the US does their taxes would disrupt a lot of careers of a lot of of IRS employees. I would imagine there is considerable pressure to keep the status quo from within the IRS itself.

</comment><comment><USER110> There should be an API for taxes, in which your employer, banks, or yourself can report income and recieve an exact tax amount to be paid quarterly.

Most deductions and credits should also be done away with to simplify the tax code, but I doubt the Intuit lobbyists would let that happen.

</comment><comment><USER111> This blows my mind. Here in AU, I can lodge mine online through a web portal. It's pre-filled with a variety of information including my reported taxable earnings (through company reporting), my superannuation information, my private health insurance (reported by those companies), any dividend payments made to me, etc. If any of the pre-filling is wrong (in my experience, it never is unless there's info it doesn't know about), I can correct it manually.

I basically only have to enter the deductions I wish to claim. Of course, if I earned money on the side that wasn't reported, I can self-report it too.

The only reason you'd pay for an accountant here is if you have complex tax affairs, or wish to save yourself time. Even when using one, you're ultimately responsible for the accuracy of your tax filing, and you're supposed to review the submission they draft.

I certainly believe that tax law should be understandable by the layman if all they're doing is a simple salaried employment, and by extension in all cases a person should be able to complete their tax requirements entirely on their own (even if that involves learning a large amount of tax law knowledge). There's something deeply unsettling to me about the concept of tax law being too obscure for the everyman to file themselves even in simple situations. Tax is a contract between the government and its citizens. The idea that a third- party private entity must be involved by law seems, to me, very opposed to the libertarian concepts that the US apparently holds dear.

</comment><comment><USER112> "It could also submit pre-prepared tax returns for people to approve and then file based on the salary data the agency already has."

That's the dream. Put the onus of doing the calculations on the government, and you get the right to disagree if you find fault with it.

Wouldn't that be great!

</comment><comment><USER113> It's really a problem for other businesses even more so than consumers. Productivity is probably halved while everyone is thinking and talking about taxes for several weeks. It's all I hear at work. I am surprised there is no business SuperPAC to fight against this.

</comment><comment><USER114> Disappointed by the overwhelmingly negative commentary here.

There are multiple private companies providing this service for low amount, as many have mentioned; for free for incomes below a threshold.

1) Why would you want the IRS to duplicate this effort and compete with these companies? Remember 'Free' in this context means paid for by tax dollars. Do you think the IRS is going to spend less to implement a filing system than one of the existing vendors has? If they do it in-house, do they even have the expertise? If they contract it out, is that much different from what we have now?

2) Everyone needs to file state taxes anyway. Seems unlikely the IRS is going to handle this, as it adds a great deal of complexity and isn't really part of their mandate. So if you create a free IRS filing system, then people still need to go to one of the existing vendors and import their info and pay to file state taxes anyway.

There are good reasons to think the IRS creating a system is a bad idea. Blaming passage on a few $K in lobbying is lazy.

<comment><USER115> Pretty sure these arguments wouldn't change if the IRS provided a free service to submit federal taxes.

1) They could still provide free federal tax submissions 2) State taxes could still be submitted through the companies

If the companies do in fact provide a service that is valuable the IRS should not be competition for them.

Now with that said. Intuit loads up their service with tons of dark patterns, and they spend money lobbying... why would they be doing that if they provide a valuable service?

<comment><USER116> They do provide free federal tax submissions. Everytime I see this stuff come up, I'm in disbelief.

I used Free File for over a decade when I had a lower income and 1040 type employment.

You seriously click a button here: [https://www.irs.gov/filing/free-file-do- your-federal-taxes-f...](https://www.irs.gov/filing/free-file-do-your-federal- taxes-for-free) Pick a provider and fill out the form. It doesn't even take more than 5 minutes. 10 if you're slow.

How is it on a site full of highly intelligent and educated individuals, there is one single comment about Free File and how simple it is. And it has been around for many years.

There are tons of comments in this thread about how income tax is not automated and free in the US, when it is actually _almost_ automated(fill out name and address and income and the software does the rest) and free for 70% of people in the US. How? How are this many people commenting and no one appears to be aware that almost all of the comments in this thread are incorrect?

On the state level, the federal government, for obvious reasons, cannot control that, but you will be happy to know that many states also support forms of Free File, although are often more restrictive. But with that said, many state taxes are just percentages of what your federal tax liability is so they are often half a page long forms for most people.

And regardless of all of that, and regardless of income, if you have a typical 1040ez income, you can go down to the public library, get the form which is literally two pages and fill it out and mail it in. It also takes about 15 minutes and in 100% absolutely free. Well, you have to purchase a stamp.

Seriously, do you not realize this has been the case forever? Are you located in the US?

And if you make over $66k a year? Come on, you can afford $50.

<comment><USER115> So these ([https://apps.irs.gov/app/freeFile/](https://apps.irs.gov/app/freeFile/)) are all still companies loading their site up with dark UI patterns so that people end up paying money to file their taxes. And sending in the forms via mail has always been free.

...I don't understand what possible value you believe the American public gets by paying companies money to do something that the IRS could/should be offering for free?(not meant to be curt... just trying to understand your perceived value proposition)

What is wrong with an electronic filing system offered by the IRS without a charge?

</comment></comment></comment></comment><comment><USER117> Corporations when there's no competition - "we are global leaders in innovation". Corporations (like TurboTax) when there's competition - "(sob, sob, sob), save us. here's some money"

</comment><comment><USER118> The situation is even worse for foreigners in the US. As a non-resident I have to use websites with horrible UX, it's totally confusing and I have to gather all the documents and print the forms to mail it to the IRS.

</comment><comment><USER119> So... maybe it's time someone build (or fund others to build) a free, online, tax prep service. Something that handles all but the really challenging cases. Do it just to screw the people behind this sort of idiocy.

</comment><comment><USER120> From what I understand, there are a lot of businesses that make money off the system being very complex but what is stopping an open source program being created that does everything for you like the paid tools do?

<comment><USER121> probably the lack of an open API, which is stable? (at least that's the case around here)

</comment></comment><comment><USER122> We can thank Grover Norquist and many other conservatives who want to make tax filing as unpleasant as possible so the very concept of paying taxes is vilified and the idea of government services are poisoned by association.

</comment><comment><USER123> As a comparison: in Austria you can file your taxes online (for free).

If you forget to file them for two years the gov will do an automated filing for you and transfer the money you are due to your bank account.

</comment><comment><USER124> In Brazil the govt supplies the software for free, runs in all major operating systems, and autofills what the IRS already knows if you have a digital certificate.

</comment><comment><USER125> The government shoots themselves in the foot?

Can anyone explain given the unbelievably bad record of government, why they would ever want more of it?

<comment><USER126> Exactly this. Often times when people complain about waste and corruption, their solution is more government.

</comment></comment><comment><USER127> One problem I can see with a standardized computer filing system is that there is unlimited ability to build complex tax law.

</comment><comment><USER128> ProPublica estimates that the tax prep industry has spent $6.6 million to advocate for the IRS filing deal. Is this legal?

</comment><comment><USER128> In Brazil it has been by software for many years, recently there is a mobile version. For all tax payers.

</comment><comment><USER129> Non-story. IRS has never offered Free File. Their current program is in conjunction with for-profit providers

</comment><comment><USER15> Congress can't permanently bar anything. A future Congress can undo anything a past Congress does.

</comment><comment><USER130> Whenever you see a bill called "X First" for some X, you know who it's going to shaft - X.

</comment><comment><USER131> Does anyone know why Senator Wyden is behind this? It's surprising for me to see.

</comment><comment><USER132> Our country is literally being held hostage by corporations, this is incredible.

</comment><comment><USER133> My tax simplification plan of choice is repealing the 16th amendment.

</comment><comment><USER134> Would be even nicer if taxpayers would have to remit taxes on their own, instead of automatic deductions by the employer.

Preferably, they'd have to count paper bills with their own hands, savoring each one for just a moment, before handing it over to the government.

<comment><USER135> I've often lamented a system that makes people feel good about getting back money that was already theirs (without interest) and calling it free money.

<comment><USER136> That's how we learn how great BB is.

</comment></comment></comment><comment><USER137> Why do regular citizens even file their taxes in the first place? The IRS has everything they need, from W2 to financial statements from brokerages. All of this filing is required by law anyways. Do it for me and send me a bill or refund.

</comment><comment><USER138> The tax law should be written as exemplar runable code.

</comment><comment><USER139> this is crazy. basically a cartel in cahoots with lawmakers.

imagine if New company offered software to do this free?

I'm guessing rules make this impossible

</comment><comment><USER140> I sincerely hope this never comes to Canada.

</comment><comment><USER141> I could not think that this would be a _bipartisan_ bill. At least Credit Karma is still around, offering free tax filings (no affiliation, just a super-happy user).

</comment><comment><USER142> The symptom is tax filing. The cause is wreckless spending and near 0 efficiency. The enabling factor is the force of law to extract your money via tax.

</comment><comment><USER143> Your lobbying dollars at work.

</comment><comment><USER144> Can we not?

</comment><comment><USER145> I could've already intuit that

</comment><comment><USER146> As a vehement proponent of free markets I wholly oppose this sort of crony capitalism. I think this is something everyone in politics can and should agree on.

If the government is going to collect taxes they shouldn't be giving a certain industry a leg up on for charging money for people to pay taxes.

</comment><comment><USER147> Thus preserving our "beloved" private e-filing companies.

I've said it often, we are all mere resources to government, law enforcement and corporations.

</comment><comment><USER148> Taxes are complicated to file _because taxes are complicated._ I'm surprised the source of tax woes is left out of this discussion, and the obvious solution (a simple tax system).

The solution to excessive, complicated rules is less, simpler rules.

</comment><comment><USER149> I think that the work-around for this problem is an online tax filing service like that offered by Credit Karma, which like their credit score reporting service is supported by ad revenue rather than by charging a fee for the service.

</comment><comment><USER150> As the article makes clear, this is not a unilateral ban on competing with tax prep software companies, but rather a _deal_ (pre-existing but now codified into law) in which the companies agree to provide free tax prep software to low-income taxpayers and in exchange the federal government agrees not to create a competing product.

To me this sounds like a great deal for taxpayers. In exchange for not spending tons of taxpayer money on a project which may or may not turn out well, makers of existing high-quality products agree to voluntarily give free access to it to the majority of taxpayers.

The bill additionally codifies funding for the VITA program which provides free in-person preparation services for low-income taxpayers.

I think this is about as good as the situation can get without actually simplifying our tax code.

<comment><USER151> But is it really free? Or are you just paying in a different way?

[https://www.washingtonpost.com/technology/2019/03/07/when- ta...](https://www.washingtonpost.com/technology/2019/03/07/when-tax-prep-is- free-you-may-be-paying-with-your-privacy/)

<comment><USER150> That article is referring to a different breed of free service.

</comment></comment></comment><comment><USER152> The easier it is the file taxes, the closer you get to a direct link to your bank account where you "don't have to think about it". Affordances and friction can be good. And if you (actually) believe in equality, those affordances should apply to all.

<comment><USER153> Ugh, I hate this argument so much. It's the argument Grover Norquist goes around making to every Republican in Congress that that (in addition to Intuit's lobbying efforts) to stop this from ever happening. (There's a great episode of Planet Money [1] about it.)

In addition to just about every major country other than the US, California already has this and it's absolutely fantastic. I've literally never heard anyone who's actually used it complain about it and say they'd rather not have the option of filing their taxes in this way.

Imagine if your cell phone bill worked like US federal taxes. They would send you a blank sheet of paper and make you write down your minutes, texts, and megabytes for the month, and any other applicable fees you might owe, calculate the total bill yourself from that, and send a check for that amount. The provider already knows what you owe and calculated it themselves; they just aren't telling you, and you're threatened with additional fines or burdensome audits if your calculations don't match theirs. This causes you weeks of anxiety and dozens of hours of lost productivity every year. (Paraphrased this argument from the subject of the Planet Money episode.)

[1] [https://www.npr.org/sections/money/2017/03/22/521132960/epis...](https://www.npr.org/sections/money/2017/03/22/521132960/episode-760-tax- hero)

<comment><USER152> The cell phone company doesn't have guns or regulate my property rights. Your argument is weak. Turbotax is better than government software will ever be, and it's close enough to free that no one is out in the cold on it.

<comment><USER154> Citation needed that Turbotax is better than the government software that is used to validate millions of tax returns.

So much of this is just re-running information that other entities like employers, banks, etc. have already furnished to the IRS with a slim bit of additional data on top of it (vast majority of Americans) that there's no reason the IRS can't just compute it directly since that's what they're doing already when they validate a return.

</comment></comment></comment></comment><comment><USER155> I think this is a great idea. The risk of the IRS totally screwing up is just too high. And having an outside contractor do it is potentially even worse.

E.g. the State of Oregon contracted with Oracle to create a health insurance marketplace. $200 million dollars later there was nothing but lawsuits. [https://en.wikipedia.org/wiki/Cover_Oregon](https://en.wikipedia.org/wiki/Cover_Oregon)

Let that sink in. Two hundred million dollars and they couldn't get a fucking website working. Two hundred million dollars!

Anyone who has played with TurboTax or H&R Block software knows that the software is at least pretty good. There are plenty of nuances in the tax laws, and the software at least attempts to cover those. Sure, a good tax accountant probably can do a lot better, but for 98% of people the software is good enough.

Does anyone seriously believe that the IRS would do better? Why waste taxpayer money to find out?

<comment><USER156> > Does anyone seriously believe that the IRS would do better?

It's interesting to see the same arguments resurface as they do for healthcare.

Most non-Americans here live in countries where salaried employees have almost zero contact with the country's ex agency. No returns, no filing, it all just magically happens behind the scenes.

So it's kinda weird to hear Americans say "that's impossible! How can you trust government?!".

The worst thing about American exceptionalism is that it blinkers Americans from things that are not only done better by some other countries, but also the things that literally every other rich country in the world manages.

<comment><USER157> To be fair, American exceptionalism has little to do with the glories of our IRS.

Our tax code is also absurdly complicated- [https://www.businessinsider.com/2014-how-many-pages-in- the-u...](https://www.businessinsider.com/2014-how-many-pages-in-the-us-tax- code-2014-4) as an example. As I've said elsewhere, some of the most significant opposition to the IRS pre-filing taxes is trusting that it operates in good faith - or at least competently - and appropriate applies all deductions that a person is eligible for. Simplifying the tax code would go a long, long way to alleviating most people's concerns, I think.

<comment><USER71> that concern is simply not valid. The IRS would send you a proposed return and you could make whatever changes you want to make.

<comment><USER157> And many people will still go to a private tax service to verify that everything that could be accounted for is accounted for. The concern isn't that people wouldn't be able to make changes, the concern is that people would naively accept whatever they are told they should get back, even if that isn't the case.

To be fair though, I think this is somewhat less of an issue after President Trump's tax reforms; with the doubling of the standard deduction, it's become less fruitful for most people to attempt to itemize their deductions.</comment></comment></comment></comment></comment>