US Tax Filings are down 5% as of April 15, 2017 | Hacker News Reader

US Tax Filings are down 5% as of April 15, 2017

irs.gov

78 pointsrodionos99 comments

In the past, many illegal immigrants filed taxes to get refunds. This year, many tax preparers are reporting a large decrease in illegal immigrants using their services, because of fear that the information would be shared with the federal government.

http://www.npr.org/2017/04/17/523634144/tax-filings-seen-dip...

I don't know about illegal immigrants but there used to be a thriving business for scammers and fraudsters. These days you're asked to go to one of the identity verification offices of the IRS with a state issued id and social security card.

This applies to previously flagged accounts, audited filings etc.

http://www.cnbc.com/2015/02/11/tax-refund-fraud-to-hit-21-bi...

I seriously doubt this could account for a 5% drop in filings. Also, the primary reason that illegal immigrants file tax returns is to obtain refunds. Yet the total dollar amount of refunds disbursed actually increased this year despite the large drop in filings. If the drop in filings were immigration related, a similar drop in overall refunds would have been the likely result.

Why not? 4.5 million people without SSNS filed last year.

http://www.npr.org/2017/04/17/523634144/tax-filings-seen-dip...

The drop in returns received was 6 million.

> Also, the primary reason that illegal immigrants file tax returns is to obtain refunds.

Could you source this statement? I haven't seen anything besides speculation about this subject.

If a US citizen whose income exceeds a defined (low) threshold must file an annual tax return by law, then what other sensible reason would there be for an illegal immigrant to do the same if the primary compliance tracking mechanism is a SSN?

One important reason is to qualify for financial aid at private colleges and universities. I have worked with undocumented parents of documented students applying to really competitive colleges. Some of these colleges will meet their financial need even if their parents are undocumented so these parents file their taxes, often owing taxes, to demonstrate their income.

Makes sense. Thanks for pointing that out.

Could you provide a source for your speculation?

Precisely what part was speculative?

I wasn't aware that it was even possible to file a tax return without a valid SSN...then again, I've never manually filled out a 1040 either.

How would an illegal immigrant without a valid SSN file a tax return?

EDIT: Disregard...from the parent's link article: Many of these people use Individual Taxpayer Identification Numbers, or ITINs.

The IRS also wants its cut of your drug slinging and theft. http://money.cnn.com/2013/02/28/news/economy/illegal-income-...

How could an illegal alien even get an ITIN? Wouldn't being in the country legally be a prerequisite? Or are forged documents used?

Could the 5% drop be accounted for considering the numbers are for April 14th 2017 and not after the filing deadline of April 18th 2017? Seems like many people would file and/or postmark their returns Monday or Tuesday.

Both dates are 4 days before the tax deadline for the respective years.

Different days of the week, though. That affects behavior a lot.

Tax day in 2016 was also April 18th.

I'm wondering if it had something to do with Easter. There might be a lot of people who were tied up with family stuff and figured they could start on Monday. Last year Easter was in March.

Why not use stats from April 18th then?

Cause IRS devops isn't there yet. They (collect?) release metrics on Fridays.

It is Friday? Roughly 4PM on Friday, which means they'll likely be closing down shortly. Seems odd for them to do it as such a last minute thing.

I have to wonder how politically motivated this might be.

I met an older couple a while ago who refused to file taxes to protest the war. Wasn't illegal mind you. They simply made sure that they didn't earn more than cut-off ($9k I believe). They just travelled around in an RV, played folk songs, and made their living off the kindness of strangers and random odd jobs.

If enough people to affect IRS statistics were this idealistic we'd probably be living in a far different world than we are now. Unfortunately, or fortunately, most people are not so politically committed or even interested enough to do those kinds of things. The couple you speak of sound pretty exceptional. Most people are content to just have a job, go home to relax and play with the kids, pass out in front of the TV and rise the next day to do it all over again, and don't even think about politics until election day (if they even vote, which many don't).

I can imagine the "effectiveness" of this protest... I feel like if you are going to endure personal sacrifice to make a stand, you need to consider what the overall impact/objective is and make sure you are doing the right thing to achieve that objective. There were probably far better paths to go down for these folks.

I don't think of it as a personal sacrifice. I longer have the blood of innocents on my conscience. Also: I now own most of my own time, which is my highest value. Low consumption living isn't the sacrifice I thought it would be when I started.

To each their own.

Then they weren't really protesting anything. Just living normally.

Also, for me the sacrifice would not be low consumption living but rather riding around in an RV singing folk songs. Sounds like torture. As you say, to each their own. I actually really enjoy what I do for a living.

Alternatively, if someone wanted to protest, they could make as much money as they like, then just donate it to their cause to avoid taxes.

You may deduct charitable contributions of money or property made to qualified organizations if you itemize your deductions. Generally, you may deduct up to 50 percent of your adjusted gross income, but 20 percent and 30 percent limitations apply in some cases.

from https://www.irs.gov/charities-non-profits/charitable-organiz...

I suspect lots of folks are doing this. I do (earn under the taxable limit I mean. I still file). Meet Dave Gross, my inspiration https://sniggle.net/TPL/index5.php

Here's how the math works: https://sniggle.net/TPL/index5.php?entry=howto

I no longer winter in Palm Beach, but I also no longer have blood on my hands.

For a single person under 65: standard deduction $6,300 plus personal exemption $4,050 = $10,350 can be earned before income tax is due. More, if you use tax advantaged retirement and HSA accounts.

Note: this only applies to the personal income tax, not the payroll or self employment taxes.

Year on year chart: https://apps.axibase.com/chartlab/626f6fb9/3/#fullscreen

The job reports numbers looked really good for 2016 but there were always questions about the "missing workforce."

A possibility I haven't seen raised yet in this thread is that more people are below the threshold to file, although 5% seems strikingly high.

Are there any statistics on how many people file a Form 4868, the 6-month extension of time to file? Since 2006, no reason is needed and it's granted automatically, but this wasn't initially well known, so I'd expect usage of it to be slowly increasing as word gets around. But I haven't found any published numbers.

You still have to pay any taxes owed at the time you file the form. That may not count as "filed", though.

True, but if you want to maximize a refund without a re-filing, this might be one way people justify the decision.

A bit off topic, but I'm going to rant here anyway.

I filed using the Free Fillable Forms. They got rejected with an XML validation error. OK, I'm a programmer, I can (and did) figure it out from that. But most people aren't. Imagine that your grandmother is filing her taxes, and gets an XML validation error. What is an XML validation error going to mean to her?

Now, they've got a handy Web tool that you can paste the error message in, and it will tell you what's wrong. But why should you have to? When they email you that your submission failed, why don't they run the error message through that tool, and mail you the results?

I use the same thing. I often get an error for forgetting a field or something when filling in the information from the W-2.

First, let's ignore that the government already has that information and having to enter it again is dumb to begin with.

But aside from that, you'd think it could catch something like that immediately when filling out the form, instead of having to wait several hours for the IRS to process and reject it.

Free Fillable Forms is made by Intuit. If you look at the network tab in your browser's developer tools, you will see that it makes requests to Inuit APIs.

They have an incentive to make the service as terrible as possible while still technically being usable.

I believe we'll be stuck with this mess so long as the IRS partners with the Free File Alliance.

Well, if they're Inuit APIs, I can see why there might be hangups. Something's bound to go wrong between here and the Arctic regions.

It could be because the deadline was the 18th this year.

They were due on the 18th last year as well.

But not on Easter weekend

Out of the people returning, do we know how many fall under the income requirements? Is it possible to ascertain those who aren't paying taxes out of protest?

So the national debt is about 70x the annual tax revenue?

That is refund amounts, not revenue.

Annual federal tax revenue is just under $4T[1]

Keep in mind a lot of our "debt" is future obligations, which makes comparing to present day revenue kind of useless.

[1] http://www.usgovernmentrevenue.com/total

?? All Debt is a "future obligation". That's what debt means.

A lot of debt represents expenses already incurred instead of budgeted future expenses.

Congress essentially mandated savings for future expense.

whoa, so a lot of our national debt is just obligatory future spending, and we add it to the total figure because we don't have a choice about spending that money in the future?

I honestly didn't realize that!

Well we do have a choice. It usually manifests in suggestion of extending the retirement age.

US individual income taxes are about $1.8T a year (the $250B number in the link is refunds). There's also about $1.2T in payroll taxes paid by employers, $500B in corporate taxes, and a few smaller things like tariffs and interest, etc., adding up to a little over $3.5T total revenue per year.

The current gross national debt is just shy of $20T. So, that's about 6x the annual government revenue.

In theory, national debt is "good debt" like a home mortgage, and having a home mortgage worth about 6x your salary seems pretty healthy.

Do you know of any good articles explaining the concept of 'good debt'?

I understand the position that govt taking debt out if the funds can increase economic growth->more tax revenue. However, this concept seems to break down when debt is carried over year to year and used to pay interest expense on other debts.

If you can borrow money at X% and put it towards a productive use that generates Y% returns, then it is worthwhile to do so when X < Y. The government can currently borrow money at around 1-3% interest [0], depending on the length of the term.

Presumably, the return you can generate from borrowed money diminishes as you borrow more money, so "good debt" is some amount of money that you have borrowed that allows you to be more productive and pays for its own interest, in a sense. But borrowing even more than that would start to become less useful, and drag down your overall return.

[0] https://www.bloomberg.com/markets/rates-bonds/government-bon...

6x your salary is pretty high. I've stuck to 4x personally.

I've read articles in the past which claimed 2-2.5x, historically.

Hm, I wonder if that implies that more people waited closer to the final deadline this year?

Due tomorrow, do tomorrow.

A lot of people wait till the final deadline since e-filing is so easy. Or at least that's how I tend to do it.

That's what I thought, until the IRS needed a credit card last 4 digits and phone number to confirm my identity, and said that my phone company couldn't verify my identity...?

What an awful system. I probably wound up a day late with the postage because of that, but those assholes are lucky I filed at all. I was about ready to just throw my 1040 in the trash chute and give up my rebate as a lost cause. My time is worth more than this antiquated horseshit, and if I've learned anything from my grandpop it's that audits don't mean shit if you just keep ignoring them.

So, there's your procrastinator's attitude in a nutshell I guess.

You can ignore audits?

Sure. If you aren't self-employed, your employer already pays your taxes and you're likely owed money by the IRS. It's your choice if you don't want to collect it.

If you're self-employed and not reporting income...well, that's another story. But this is terrible advice that you should definitely ignore, anyways.

I didn't ask if you can avoid filing taxes or collecting the money you're owed; I asked if you can ignore audits, since the claim was the latter.

Right, and it really depends on how serious they are. If they think you owe a lot of money, then no, you cannot ignore them. If they think you're just an asshole who can't be arsed to deal with them or is not capable of doing so, they really aren't going to do anything.

Like I said, my grandfather owns a business and hasn't filed in decades. It caused my Uncle some serious consternation when he took the reigns, but he never faced any consequences in the form of being held in contempt, asset seizure, etc. Just some nastygrams every now and again.

But again, this is awful advice; I was mostly being facetious. You should not just outright ignore your taxes, you should at least make a desultory effort to get SOMETHING in. But damned if I'm going to bother pulling together any more forms than are in arms/web's reach, or mail in anything more than the bare minimum.

To more specially answer your question, legally you don't have to show up to an audit. The audit is supposedly in your best interest, because it will stop the clock on racking up penalties and interest, assuming you pay them afterwards.

If you just keep ignoring it, eventually you will die and your estate won't be released to your heirs until the tax man gives it a final audit, and your estate will have to pay penalties and interest back to when you failed to pay.

If you're poor and/or broke, then sure, ignore an audit, because they can't get blood from a stone. :)

It is possible to do so, I suppose, but the results are normally catastrophic financially. You can have levies placed on you if you end up owing $5,000 or more. You can have liens placed on your property if you owe $10,000 or more. You can have your passport revoked nowadays if you owe $50,000 or more.

Avoid the catastrophe.

Call your 2 Senators and Representative. Call your state's Congress people. [0] Let them know you care about this. Advocate for systems like ReadyReturn, the one proposed by Professor Bankman. [1]

0. https://whoaremyrepresentatives.org/

1. http://www.npr.org/2017/03/29/521954033/stanford-professor-l...

The IRS had huge problems with identity theft last year. They had to do something. Better to have those sorts of problems than to have them coming after you for a $20k payout to some scammer.

I don't care if a scammer scams the IRS out of $20K; that's their problem, not mine. If they think I'm responsible, well they can check my accounts; they're shit outta luck.

And their protective measures demonstrably did not work, anyways. Requiring a tenuous chain of several checks to all succeed is ridiculous; I have plenty of ways to verify my identity, FFS.

>they're shit outta luck.

This is why the new measures exist.

Right, but that's not helpful if I'm unable to efile because of their "new measures." Why not allow several forms of ID, like maybe a driver's license or passport? Why is a phone number the blocking step? Who designed this system?

That's how I feel whenever I am forced to interact with the IRS. Once, I went to one of their fully automated systems only to find that the entire website was only open between the hours of 9AM-5PM on weekdays! What?

I'm getting real tired of this shit. It's just unreasonable to expect me to jump through all of these hoops for something that they insist is so essential. If it's essential, then make it easy! If it's not easy, then don't make me do it!

Life is hard enough without the government ordering me to do busywork, and then failing to support the systems which they want me to use. Either it shouldn't be an order, or the system should work. Full stop. And I wouldn't be so upset if this horseshit bureaucracy and presumption of malfeasance wasn't starting to permeate every single aspect of modern life.

Damn, if your time is so valuable just hire an accountant for a few hundred bucks and let them file for you. That's what I do since I own a small consultancy. Total bill this year: $150. Time spent on taxes? < 1 hour.

Tax evasion and fraud affects us all, whether you want to admit it or not.

There have been efforts to change state/federal law so that tax agencies can send you a bill for what they think you owe, potentially saving you a lot of work. Unfortunately tax-prep companies have lobbied against it.

You must merely have your returns postmarked by the deadline. There's no impact by a failing e-filing system. Worst case, print them out, attach a check if needed and drop them in the mail.

> There's no impact by a failing e-filing system.

Unless you efile after the post office closes on the night of the 18th and/or don't own a printer and/or can't get there after efile fails but before the post office closes.

Or there are people like me, where my efile was rejected on April 19th. Now what do I do? If I try to efile again, it just says, "sorry, you're past the deadline". If I mail in a form it will technically be late, although I guess if they say anything I can show them my failed efile attempt...

Don't wait until the 18th? I always file my taxes in January. It's REALLY simple.

Also, being late isn't that bad. You'll likely get a notice in the mail detailing out any late charges. Which for being 1 day late will be extremely minor relative to your income.

That's great if your taxes are simple. Mine is not, and one of the critical forms didn't arrive in my email until April 16th, so I couldn't finish till then, and it affected other parts.

And yeah, I know being late isn't terrible, and in fact if you are owed a refund there is no penalty at all. But it's still annoying that it was late because critical government run infrastructure was broken.

There is a "perfection" period when things go wrong in e-filing. Granted, you shouldn't have waited until the last moment to file. That being said, you could have called 1-800-829-1040 for guidance on how to fix the problem through either fixing your e-filing or mailing it in with appropriate headings to still be counted on-time.

The main line was slow on the 18th and people had very little wait time. The 19th was much the same. There were an excess of operators who were waiting for calls on the non-specialty line.

Go read Publication 17 for guidance for next year.

Makes me a little nervous every year whether the turbotax site will hold up as everyone is filing on the last day, juts like me. Imagine their ops folks' schedule. Arpil - December: crickets. A little bump in January as new versions of the software are released to address tax law changes. Then more crickets. And last three days: hell.

my bank (which is also my stock brokerage) had an outage and though i did my taxes on saturday, I had a minor panic that I wouldn't be able to complete them without having access to my stock 1099s. I can only assume that outage was due to demand-related ops.

IRS penalties for late filing are a portion of taxes owed. Most people don't owe anything (rather, they receive a refund), so there is no penalty.

Turbo Tax is so prolific that when Intuit had capacity problems on filing day in 2007 the IRS extended the filing deadline for Turbo Tax users. http://www.accountingweb.com/tax/irs/irs-extends-turbo-tax-e...

Really? I get on that as soon as I can in February. Filing earlier gets me my refund as quickly as possible.

Though I'm also kinda weird, in that I actually rather like the process.

> Filing earlier gets me my refund as quickly as possible.

Not everyone overpays taxes in advance, so filing early provides no benefit other than moving a required task to the "done" pile sooner.

A great many folks don't get a refund.

I was exactly even this year, guess my withholding was correct.

If I could have waited, I would have.

Unfortunately, my return clocks in around 30 pages and has multiple attached schedules and worksheets, which means I can't just do it the day of.

They will be down 25% next year I imagine ...

I'll take that bet.

This makes sense because the last day last year to file on time was the 14th or 15th whereas this year it was 17th.

Returns will probably be higher this year once you account for that last weekend + Monday.

Incorrect, April 18th was the last day to file in 2016 as well.

Reviewing the Interactive Tax Assistant and/or Publication 17 at the IRS website would probably cure those misconceptions really quick.

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