The real problem here is that Intuit and other companies lobby millions to maintain their status quo. The right thing to do would be to put every single dollar spent on these corporations into a government program that develops this kind of software or even does the taxes for you (this already exists in many countries in the EU.) Instead, in the US, you pay for Turbotax, they make a profit out if it, and then they use part of the money to lobby and keep the tax code and system rigged for their own benefit. I don't know if open source software is the solution here -- and as far as I know, the tax forms change every year, so it will be forever playing catch-up -- but it seems to be missing the point entirely.
I see this comment on every single article about taxation on reddit and HN, but can you be a bit more specific and identify what this lobbying does and actually point at some examples?
The intensity of industry opposition to CalFile has not gone unnoticed in Washington, D.C. In February, IRS commissioner Mark Everson told Congress that he was reluctant to set up an IRS direct e-file system in part because of the bruising battle he witnessed in California...And that leaves federal taxpayers with little prospect of a direct-to-government e-filing system anytime soon...In fact, the industry already ran Big Brother-themed ads in California when tax authorities there were setting up CalFile, a direct e-filing system for state taxes. Lenny Goldberg, the head of the California Tax Reform Association, says Intuit is leading the charge against direct e-filing.
https://priceonomics.com/the-stanford-professor-who-fought-t...
There is one program in America, however, that provides some taxpayers with completed tax returns. Since 2007, around 80,000 California taxpayers each year have paid state income taxes this way under a program called ReadyReturn.
ReadyReturn survived corporate lobbying for one reason: Joe Bankman decided to make easy tax filing his personal mission, and he spent $30,000 to hire a lobbyist to counter lobbying by Intuit, the maker of TurboTax software.
but here's something more interesting:
Since 2015, the tax preparation industry has persuaded lawmakers to include a line in the annual appropriations bill that bars the IRS from offering pre-populated returns to taxpayers. The Financial Services and General Government Appropriations Bill approved by the Senate last month extends that ban another year.
The codification of Free File in the Taxpayer First Act and the extended ban on pre-populated returns in the appropriations bill are steps in precisely the wrong direction.
I would be happy if there was just a place to upload the form to online. No fancy software needed. I have to mail my Quarterly 941 every quarter or pay some overpriced software to do it - https://www.irs.gov/forms-pubs/about-form-941
I think the popular counter argument is worth knowing. The TurboTaxes of the world argue that if the Government just sent you a pre-filled out form they could mess up many of them & you would possibly overpay if you didn't do your due diligence. This tends to get support from those who like to argue in favor of ideas such as "smaller govt" & "govt is inefficient compared to businesses where the capitalism market will pick the winners". Obviously both of these ideas are highly controversial.
Propublica is the definitive outlet for reporting on this stuff. They've spent years digging into bills and the millions that Intuit and H&R block spend lobbying around tax reform.
> “For a decade proposals have sought to create IRS tax software or a ReturnFree Tax System; All were stopped,” reads a confidential 2007 PowerPoint presentation from an Intuit board of directors meeting. The company’s 2014-15 plan included manufacturing “3rd-party grass roots” support.[0]
Also of note was how after they conceded to making a government-mandated (bad, hamstrung) free filing software alternative for those making below $39k, Intuit blocked it from Google with robots.txt: https://www.propublica.org/article/turbotax-deliberately-hid...
...Which is important because if you start from anywhere else on their site, they'll begin hurling upsell dark patterns at the user, despite proclaiming "free" in copy in many places.
Right now, if I google "file taxes for free usa," the page "TurboTax Free Edition"[1] ranks higher – which is not the same software. And, of course, they do not link to the actual FreeFile page from there.[2]
Edit: turns out that Intuit will no longer be offering that government-sponsored Free File alternative after this year (disclosed in a blog post titled "Accelerating Technology Innovation," hah)[3]. Good riddance. The US Treasury Inspector General found that only 2.4% of taxpayers (2.5 million) actually used the free file software, whereas 5.5x that number could have filed for free, but were likely charged for it instead:
> TIGTA estimates that more than 14 million taxpayers met the Free File Program criteria and may have paid a fee to e-file their Federal tax return in the 2019 Filing Season.[4]
Right. For most people that are on a payroll and maybe have a 401k and what not, tax preparation should be easily automated. In some EU countries, the government will send you a draft that you basically just have to sign and send back. For the remaining 20% (likely even less than 10%) of people with more exotic investments, it is probably safe to assume that they either have the knowledge to handle the edge cases themselves or the wealth to pay someone to do it for them.
It should also be noted that the IRS already has all of the information about you anyway. Your bank, your brokers, etc all send copies of your financials to them. At that point, filling in a tax return by hand is basically a potential form of punishment for not doing your homework right.
In the UK 80% of the population don't even have to sign anything and send it back. The rest have some employment income information on a website and have to supply the rest of the data, I found it pretty straight forward when I did it for the first time.
The US government is always honest and most assuredly will make their software with the end user in mind. Combined with the excellent customer support offered by the IRS and the US government's proven track record in creating stable software used by millions, this would be the best solution.
I can only assume you're being sarcastic, but this kind of attitude only benefits these corporations. It is a common tactic by the rich oligarchies to defund and delegitimize government institutions so that they are scorned by the population and eventually privatized -- a move that only benefits them in the end. I would suggest Noam Chomsky's "Requiem for the American Dream: The 10 Principles of Concentration of Wealth & Power."
In Spain the tax filling software provided by the government was migrated to a JavaScript browser based interface years ago (it was a Java app before).
The interface is responsive. I literally can send my taxes while I shit. The biggest hurdle is that the day the tax season starts servers can't deal with the load (because apparently everyone wants to be Ned Flanders and file their taxes the first day).
Thanks to the national ID e-card (which does have a chip with a private key and a certificate signed by the government's certificate authority) I don't even need a login/password to enter the tax agency web site, the card proves my identity.
This is not some advanced e-government shit, it's routine and every advanced country is expected to have it (just like universal healthcare, clean water or paved roads). Even development countries are starting to have these kind of web services.
At this point I suspect some people get paid to spread bullshit like this.
10 years ago I had some special tax situation that the two tax preparers I consulted were not familiar with. They took the safe route in preparing the paperwork. So I called up the IRS support line and a specialist talked with me in detail about my situation and told me the proper way to do it and it saved me $5k in taxes.
Absolutely, but wait times have been increasing due to budget cuts. There’s an unhealthy fear/contempt of the IRS in the US. It’s one of the most important government agencies, and it should be treated as such and given the resources to serve the people better, instead of serving as a perpetual political punching bag.
Almost as if their job is to make sure that you pay taxes correctly... It really makes sense that they would want it to be correct as it is less potential work for them.
