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I would really like to see the IRS get this done and done well. There's really no excuse for their inability to give us a preliminary tax report, allow us to in

I would really like to see the IRS get this done and done well. There's really no excuse for their inability to give us a preliminary tax report, allow us to input the details they don't have, and pay our taxes without all the wasted time and effort.

gamblor956 5y ago
The IRS is not permitted to do that, by law. You can thank Intuit for that.
- PopAlongKid 5y ago
  That is not true. In fact, Intuit and H&R Block dropped out of the Free File Alliance primarily because of the following change made at the end of 2019 to the Memorandum of Understanding. The following sentence in Article 2 of the MOU is hereby stricken from the MOU: "In recognition of this commitment, the federal government has pledged to not enter the tax return software and e-file services marketplace."[1] [1]https://www.irs.gov/pub/irs-utl/FFI%20Signed%20MOU%20Addendum%2012-26-19.pdf https://www.irs.gov/pub/irs-utl/FFI%20Signed%20MOU%20Addendu...
  - gamblor956 5y ago
    You are confusing two different (but related) things. The Free File Allowance is intended for lower-income individuals to e-file for free. (Some tax service providers still participate.) The IRS withdrew from the agreement preventing them from providing their own such software to low-income taxpayers, but it's a moot point since they don't have the resources to create such software. What the parent commenter was referring to was the EU-style tax systems, where they send you a pre-filled in tax return, you verify the amounts and sign, with minimal input/preparation required by the taxpayer. That is what the IRS is prevented from doing, by law, as a result of Intuit's lobbying.
    - PopAlongKid 5y ago
      Can you provide a cite for the law you refer to? I just reviewed all the section descriptions in the IRC (USC Title 26, Subtitle F - Procedure and Administration §§ 6001 - 7874) and can find nothing like that.
PopAlongKid 5y ago
In my opinion, a substantial number of taxpayers would not be in favor of that, they like our current system of "voluntary compliance" because it allows even the little guys the opportunity to fudge a little without getting caught. Fortunately, most do not take advantage of that opportunity, but the "tax gap" (legitimately owed but unreported and uncollected taxes) is quite large. More importantly, automating the keypunching of a few standard forms such as W-2, 1099-R, 1099-INT/DIV/B, etc would only cover a small portion of the "time and effort" to prepare most tax returns. The IRS does not know what your filing status is (married filing joint or separate, single, head of household), who is a dependent of whom (there are two main flavors of dependency to determine), whether and how much you made or lost running a business or being a landlord, your medical expenses, charitable donations, real property taxes, your total gambling wins/losses, the list goes on. Even things that are reported, such as contributions to your IRA, don't get reported to the IRS until well past the original filing deadline. Because of all these things, there is no way the IRS could give you a "preliminary tax report", they can only import a limited set of data for you. California does actually have something like what you are asking for, CalFile (formerly ReadyReturn), but originally it was limited to "single, no-dependents, standard-deduction, only-wage-income, one-employer, with a maximum adjusted gross income of $139,917. The purpose of ReadyReturn was to make it easier for taxpayers to file their returns, and to make the filing process more accurate and faster."[1] [1]https://en.wikipedia.org/wiki/CalFile https://en.wikipedia.org/wiki/CalFile
- toomuchtodo 5y ago
  If other country revenue systems can do this, why do you feel the US tax filing landscape is so different? As gamblor956 mentions in other comments, this is not a technical or practical limitation, but regulatory capture via statute. https://blogs.worldbank.org/developmenttalk/how-are-countries-making-it-easier-pay-taxes https://blogs.worldbank.org/developmenttalk/how-are-countrie... https://www.taxpolicycenter.org/briefing-book/what-other-countries-use-return-free-filing https://www.taxpolicycenter.org/briefing-book/what-other-cou... > Denmark and Sweden, both small countries, operate tax agency reconciliation systems. About 87 percent of Denmark’s taxpayers and 74 percent of Sweden’s had their returns filled out by the tax authorities in 1999. Spain, Estonia, Finland, Norway, and Iceland have also implemented tax agency reconciliation systems. CalFile was purposely kneecapped in a fight with Intuit. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1668912 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1668912 | https://escholarship.org/content/qt1tw989zv/qt1tw989zv_noSplash_0a26275e80a11b2633dcc5eaa38721db.pdf https://escholarship.org/content/qt1tw989zv/qt1tw989zv_noSpl... > Under the auspices of the Free File Alliance (FFA), Intuit, manufacturer of TurboTax, has been attacking state-run, free e-filing services for several years. The latest victim, Virginia’s successful iFile program, succumbed late last year. Through it all, the unquestioned crown jewels of state e-filing programs – California’s CalFile and ReadyReturn – have managed to survive. But this year, Intuit has ratcheted up its annual campaign to end the two programs. In the process, it is peddling some familiar falsehoods as well as some newly crafted misrepresentations. > This article describes Intuit’s nine lies, the false arguments about ReadyReturn and CalFile that Intuit and its lobbyists have been telling elected officials, staffers, and nonprofit organizations serving California’s low-income communities. It also evaluates Intuit’s proposed Free File alternative to the state’s existing programs. For all of Intuit’s assertions – whether regarding the purported shortcomings of the state programs or the purported benefits of the Free File initiative – the article offers a point-by-point refutation.
sul_tasto 5y ago
my understanding is that tax attorneys are lobbying against such reforms, for obvious reasons

gamblor956 5y ago

The IRS is not permitted to do that, by law. You can thank Intuit for that.

PopAlongKid 5y ago
That is not true. In fact, Intuit and H&R Block dropped out of the Free File Alliance primarily because of the following change made at the end of 2019 to the Memorandum of Understanding. The following sentence in Article 2 of the MOU is hereby stricken from the MOU: "In recognition of this commitment, the federal government has pledged to not enter the tax return software and e-file services marketplace."[1] [1]https://www.irs.gov/pub/irs-utl/FFI%20Signed%20MOU%20Addendum%2012-26-19.pdf https://www.irs.gov/pub/irs-utl/FFI%20Signed%20MOU%20Addendu...
- gamblor956 5y ago
  You are confusing two different (but related) things. The Free File Allowance is intended for lower-income individuals to e-file for free. (Some tax service providers still participate.) The IRS withdrew from the agreement preventing them from providing their own such software to low-income taxpayers, but it's a moot point since they don't have the resources to create such software. What the parent commenter was referring to was the EU-style tax systems, where they send you a pre-filled in tax return, you verify the amounts and sign, with minimal input/preparation required by the taxpayer. That is what the IRS is prevented from doing, by law, as a result of Intuit's lobbying.
  - PopAlongKid 5y ago
    Can you provide a cite for the law you refer to? I just reviewed all the section descriptions in the IRC (USC Title 26, Subtitle F - Procedure and Administration §§ 6001 - 7874) and can find nothing like that.

PopAlongKid 5y ago

In my opinion, a substantial number of taxpayers would not be in favor of that, they like our current system of "voluntary compliance" because it allows even the little guys the opportunity to fudge a little without getting caught. Fortunately, most do not take advantage of that opportunity, but the "tax gap" (legitimately owed but unreported and uncollected taxes) is quite large. More importantly, automating the keypunching of a few standard forms such as W-2, 1099-R, 1099-INT/DIV/B, etc would only cover a small portion of the "time and effort" to prepare most tax returns. The IRS does not know what your filing status is (married filing joint or separate, single, head of household), who is a dependent of whom (there are two main flavors of dependency to determine), whether and how much you made or lost running a business or being a landlord, your medical expenses, charitable donations, real property taxes, your total gambling wins/losses, the list goes on. Even things that are reported, such as contributions to your IRA, don't get reported to the IRS until well past the original filing deadline. Because of all these things, there is no way the IRS could give you a "preliminary tax report", they can only import a limited set of data for you. California does actually have something like what you are asking for, CalFile (formerly ReadyReturn), but originally it was limited to "single, no-dependents, standard-deduction, only-wage-income, one-employer, with a maximum adjusted gross income of $139,917. The purpose of ReadyReturn was to make it easier for taxpayers to file their returns, and to make the filing process more accurate and faster."[1] [1]https://en.wikipedia.org/wiki/CalFile https://en.wikipedia.org/wiki/CalFile

toomuchtodo 5y ago
If other country revenue systems can do this, why do you feel the US tax filing landscape is so different? As gamblor956 mentions in other comments, this is not a technical or practical limitation, but regulatory capture via statute. https://blogs.worldbank.org/developmenttalk/how-are-countries-making-it-easier-pay-taxes https://blogs.worldbank.org/developmenttalk/how-are-countrie... https://www.taxpolicycenter.org/briefing-book/what-other-countries-use-return-free-filing https://www.taxpolicycenter.org/briefing-book/what-other-cou... > Denmark and Sweden, both small countries, operate tax agency reconciliation systems. About 87 percent of Denmark’s taxpayers and 74 percent of Sweden’s had their returns filled out by the tax authorities in 1999. Spain, Estonia, Finland, Norway, and Iceland have also implemented tax agency reconciliation systems. CalFile was purposely kneecapped in a fight with Intuit. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1668912 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1668912 | https://escholarship.org/content/qt1tw989zv/qt1tw989zv_noSplash_0a26275e80a11b2633dcc5eaa38721db.pdf https://escholarship.org/content/qt1tw989zv/qt1tw989zv_noSpl... > Under the auspices of the Free File Alliance (FFA), Intuit, manufacturer of TurboTax, has been attacking state-run, free e-filing services for several years. The latest victim, Virginia’s successful iFile program, succumbed late last year. Through it all, the unquestioned crown jewels of state e-filing programs – California’s CalFile and ReadyReturn – have managed to survive. But this year, Intuit has ratcheted up its annual campaign to end the two programs. In the process, it is peddling some familiar falsehoods as well as some newly crafted misrepresentations. > This article describes Intuit’s nine lies, the false arguments about ReadyReturn and CalFile that Intuit and its lobbyists have been telling elected officials, staffers, and nonprofit organizations serving California’s low-income communities. It also evaluates Intuit’s proposed Free File alternative to the state’s existing programs. For all of Intuit’s assertions – whether regarding the purported shortcomings of the state programs or the purported benefits of the Free File initiative – the article offers a point-by-point refutation.

sul_tasto 5y ago

my understanding is that tax attorneys are lobbying against such reforms, for obvious reasons