Comment by fedups | Hacker News Reader

Comment by fedups | Hacker News Reader

I like propublica's reporting on this but geez, this needs an award for one of the top HN obsessions. Within the past 7 months:

TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free; 211 points -- 54 minutes ago

TurboTax to charge more lower-income customers; 144 points -- 3 months ago

Congress Scraps Provision to Restrict IRS from Competing with TurboTax; 82 points -- 4 months ago

Listen to TurboTax Lie to Get Out of Refunding Overcharged Customers; 171 points -- 5 months ago

TurboTax Uses a “Military Discount” to Trick Troops into Paying to File Taxes; 170 points -- 5 months ago

TurboTax and H&R Block Saw Free Tax Filing as a Threat; 355 points -- 6 months ago

TurboTax Hides Its Free File Page from Search Engines; 881 points -- 6 months ago

TurboTax Uses Dark Patterns to Trick You into Paying to File Your Taxes; 608 points -- 6 months ago

How the Maker of TurboTax Fought Free, Simple Tax Filing (2013); 462 points -- 7 months ago

edit: if you _still_ haven't gotten enough TurboTax reporting, there's a great Reply All episode that covers propublica's reporting as well https://gimletmedia.com/shows/reply-all/6nhgol

Americans are starting to wake up to the fact they live in what is by far the richest country, but that the systems in place just make the rich richer, while nothing is done to improve the lives of the middle and lower classes.

In this particular case, the rich are actively using the system to stop an improvement to the quality of life of regular people.

What's the point in living in the richest country in the world when your quality of life is lower than many countries that don't have nearly so much money?

The fact that America has the 10th highest GDP per capita [1] and huge swaths of it are little better off than a third world nation is a complete disgrace.

1: (its 4 micro city states above it, which are economically special, and 5 nations that could reasonably be considered full sized countries, however all of them still have relatively small populations)

I would argue that there are few, if any, countries in the world that this description would not apply to.

However, I agree with the point that you're making wholeheartedly. There's a very serious amount of wealth disparity around the world, and the rich have gotten so rich that they can't even feasibly spend all of their money if they had to.

You need to spend more time in better countries.

The lives of middle and lower class people in Australia, Canada, Scandinavia, etc. are much, much, much better than Americans, and improving all the time.

Do you think so? I live in Toronto and wealth inequality is still constantly at the forefront of political discourse. Obviously Toronto isn't indicative of the rest of Canada, but I don't feel as if poor Canadians are especially better off than poor Americans.

They are much, much better off. Just having healthcare makes a huge difference alone.

And yet the cost of implementing a government algorithm has not yet fallen to near-zero.

Furthermore, the government has surely implemented the algorithm itself in order to verify submitted tax returns, so the implementation cost of pre-computing everyone's tax should be comparatively small.

Maybe I’m overly cynical, but creating tax returns for everyone for free would prevent the IRS from allowing you to incriminate yourself by mis-filing (intentionally or not) and then levying huge penalties and interest on you 10 years later.

Everyone is hating on TurboTax for making money, but they’re pretending the government tax machine has no such motivation, which simply is not true.

> Maybe I’m overly cynical, but creating tax returns for everyone for free would prevent the IRS from allowing you to incriminate yourself by mis-filing (intentionally or not) and then levying huge penalties and interest on you 10 years later.

Many countries pre-fill the tax return, but require the citizen to submit it. The citizen is responsible for the submitted information, not the government.

That would expose the level of identity theft that the IRS does nothing about and actively tries to hide by refusing to provide identity theft victims with documentation.

https://web.archive.org/web/20161209003500/http://www.ayotte...

They can't levy huge penalties and interest on you 10 years later. Generally they have 3 years or maybe 6 [0].

[0] https://www.americanbar.org/groups/business_law/publications...

Yeah, that's overly cynical. :) If they switched to a pre-filled system, the revenue from penalties would go down, but it's quite likely the amount they would bring in would actually go up, assuming this reduced tax fraud. In 2016, they charged $24.1 billion in penalties -- but they estimate tax fraud cost them around $458 billion. If they lost 90% of the revenue for the penalties but cut the tax fraud even by 25%, they would be way, way ahead.

The government tax machine is in the business of collecting taxes, not running up fines. I've had several interactions where the IRS was totally with in their rights to fine me but they waved each fine because they understood it was unintentional.

The only times I've heard of the IRS going after people who unintentionally violated the rules, they were intentionally and obviously violating the spirit of the law but thought they were within the letter and were wrong.

In my experience you can make a good faith effort to figure out what your supposed to owe and pay it. In this case the IRS will treat you fairly and waive all types of fines. Or you can try to aggressively avoid taxes that you should owe in spirit. And in this case you have to be damn sure you're within the letter of the law because the IRS will try to hammer you if you color outside the lines. These seem like two fair options to me. And everyone I know who was slammed by the IRS was doing the latter.

I haven't looked this up, but I'm pretty sure audits are way down. There was a recent an article saying the IRS was focusing on auditing poorer people because it's too expensive to audit rich people. Since their budget is completely separate from tax income (and their budget has consistently been reduced), it was driven by their local incentives even if that means total tax income was way lower.

So what? Fuck TurboTax trying to rent seek mine and anyone's ability to pay taxes. What's next? Feudalism?

You know, there’s a paper form you can fill out and send in for free if you’re that angry about it.

Sure, that's always an option, but due the complexity of the tax codes, it's very easy to make a mistake when doing everything yourself.

For example, I used to work in New Jersey, and live in New York, meaning I would have to file two state tax returns, in addition to the federal. There are weird rules that you can deduct one state's taxes from the other, and then deduct the remainder from the federal taxes. The rules get complex really quickly, and even with helpful software I made a mistake one year resulting in a fine. I can't imagine how frequently I'd make mistakes if I had to do it manually.

TurboTax definitely provides a service by making it so that schmucks like me can do taxes, but if the tax code is that complex, shouldn't we have a software like this for free? At the very least, to provide some motivations to politicians to help simplify the tax code?

How much was the fine? What sort of mistake was made?

Fine wasn't that big, on the order of $150.

It wasn't actually directly due to the multi-state thing. I paid for my wife's college, and NY has a thing to let you deduct tuition from dependents on taxes. I had forgotten to attach the proof of payment for tuition, leading to me getting audited (in the most technical send of the word) and fined slightly. The biggest pain in the ass was the back-and-forth I had to do to close my case, which involved me faxing things multiple times.

Horrendous. Australia doesn't fine for making a mistake. They just send you a notice to pay the difference.

> to provide some motivations to politicians to help simplify the tax code?

You speak of NJ, NY, taxes, "mistakes", fines, potential "audits" by the IRS, then wonder why politicians would want to simplify and improve something that many of them likely grift from or cheat on themselves, due to that same complexity...

...and one of the biggest of these tax cheats hails from NY, likely has had his now (on again, off again) lawyer, who used to be mayor of NYC and before that as a US AG - probably ran interference for his cheating and other scams.

But all of them - and plenty of others - benefit from the complexity and other issues, and don't want it any other way, unfortunately. No real good solutions to that.

Hey now, no pointing out that the government has an incentive to keep the system difficult and confusing because it gets them money!

That’s absolutely not acceptable in this thread (I tried)!

Tax code complexity and the mechanics of filing are orthogonal. Fixing both is not a requirement for fixing either separately, or an excuse for not doing it.

There have been a couple of years where I worked several different out-of-state contract gigs, and a couple of years where I received unemployment due to me from an out-of-state employer. I was not trying to do anything monstrously complicated, nor was I some millionaire - I just did the jobs that I was able to land to feed my family and pay our mortgage.

I went to experienced tax professionals to help me with those returns, and _they_ were baffled, spent hours pulling out phone book-sized paper guidebooks, and debating with each other, and making phone calls to colleagues, and I had to file amended returns - in one case, _twice_. Fortunately they never charged me anything to correct the errors, but... wow.

What hope would I have had to get it right myself, trying to fill out the various schedules?

And you are a special case that does truely need an accountant to fill out their paperwork. Majority of people do not.

What form? do you mean just sending letters to my reps?

I imagine the same ones available before computers were widely available. You used to be able to pick them up at the local library.

I do that because I think it's inappropriate that any third party should have access to private financial information that's no one's business but mine and the IRS's.

Still, it's an irksome chore that I would prefer not to have to do.

That's an average of 5.28 months ago, which would've been around the beginning of May, less than a month after taxes were due to be filed. Three of the articles are from 6 months ago (mid-April), and one from 7 months ago (before filing was due). It shouldn't come as a surprise that taxes, and the cost to file them, would be fresh on peoples minds at that time.

It's an issue that affects almost every American, why not obsess? I've seen two stories in the past day about Google Nest which affects maybe 10%? What a bizarre obsession.

This is a site for "disrupting" anti-competitive bullshit, what did you expect?

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