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Comment by polalavik | Hacker News Reader

Why do we have to take a stab at how much we owe in taxes when it’s known by tax collectors?

This happens all the time. I have a line of credit and I'll log on, view the current outstanding debt and pay it off in full. Some time later I'll log in again to see that I still owe $0.xx amount which is the interest I had accrued in the time it took the funds to move from one account to another. It sounds like this is the same situation this man faced, and yet he lost a $60,000 investment.

I recently paid a toll online (TxTag), and I paid the "total balance", but I missed that you have to check a second box (the amount "in collections") in order to actually pay everything that's due, and then I got hit with further late fees for that part, with no warning that, after this payment, I was still accruing penalties.

Screenshot of the interface:

https://photos.app.goo.gl/yAMrNg4VkrP68SLf6

Wow. I wonder how many other people got nailed by this? Ticking "total balance due" would've made me immediately figure everything was free and clear as well. Worse, since the "outstanding collection amount" is less than the total, it's easy to assume it would be included, you know, when you click total.

It's a pretty unfortunate dark pattern that's wide spread in these contexts; I remember my senior year of high school and freshman year of college there were no end of mandatory workshops we had to attend about finances and this exact phenomenon.

I have a collection from EZ-Pass in NJ.

The toll booth didn't read my EZ-Pass on MY car registered to ME an EZ-Pass customer. So EZ-Pass sent me a bill in the mail for $2.50 + $50 administration fee.

I went on their website to pay, and they gave me an option to add the license plate to my account and only pay the $2.50.

I did that.

Last week, after never hearing from EZ Pass again, I get a letter in the mail from a collections agency for the $50.

$50 admin fee for paying outside of the EZ-Pass system?

$50 admin fee for "running" a toll on the Garden State Parkway... funny is it read my EZ pass on the toll booth before and on the exit, so not sure how or why they couldn't use common sense to find out that it was their error.

If I had run that booth, then I'd still be on the GSP right now.

So you’re telling me you can just pay off the current amount? Effectively allowing you to ignore the amount in collections until they choose to settle or never pay?

Oh, I suspect it would go on your credit report if you kept ignoring it. And yes, they give you that option, to pay the current amount, except they misleadingly (or falsely) call it the "total balance".

What a horrific dark UX pattern.

Amen. All in all I ended up paying about $33 for one wrong turn onto a quarter mile of toll road.

Serious question... do we call it a "dark pattern" when the design was unintentionally flawed by incompetence?

Or is it only a dark pattern if the design intended to be deceptive by it creator?

If somebody stands to profit by a bad design, they don’t get the benefit of the doubt.

Assuming that's a Texas NTTA toll, don't pay that online. Call the number on the notice. If you're polite they'll usually waive the fees provided you pay the toll in full. The website has been terrible since the mid 2000s

I lost half a semester at university because of something like this. I paid my tuition in full, something like $6000, which didn't include a book store purchase I had made weeks before. I got two generic post cards reminding me to pay my tuition and nothing else until I got a letter informing me I had been unenrolled. No bill, no phone call.

I never went back.

It sounds like regulation is required that when an outstanding debt is shown, a payoff quote good for X days must be provided (and when you pay off, you receive a refund for excess interest depending on when the payment settles). My mortgage servicers do it, my auto loan provider does it, why is the county not required to do it? If you expect citizens to act in good faith in paying their debts, help them to do so inexpensively.

Who regulates the regulators?

Citizens, activists, journalists.

EDIT: @dredmorbius Thank you for the assist!

And lawyers, courts, and judges. For completeness.

In this case? Because they can then seize your property and make more money. In cases like income tax? Because tax prep companies spend money to ensure congress doesn't put them out of business. Perverse incentives abound.

The IRS has no idea how much you've donated to Goodwill, paid in medical expenses, or any other number of deductions.

90% of taxpayers don't itemize with the standard deduction expanded to as high as it is now [1]. And if you want to get crazy, all of that data could be reported trivially to the IRS (my health insurance coverage already is [1095-B/C], reporting my health care spend from my insurance company is a few extra bytes on that form electronically sent).

It is entirely reasonable to have tax collection agencies send a good faith estimate with a window of time for corrections if you have data they do not have. There are enough threads about the evil that is Intuit that their efforts to block the IRS from offering free tax prep need not be rehashed here.

[1] https://taxfoundation.org/90-percent-taxpayers-projected-tcj... (Nearly 90 Percent of Taxpayers Are Projected to Take the TCJA’s Expanded Standard Deduction)

Agreed. I think it would be better for everyone involved (excepting HR Block and their ilk) if the only thing tax payers had to do was file an amendment if their deductions didn't match what the IRS sent out. For the vast majority of people, they wouldn't have to resubmit anything. For those who do have more complicated tax scenarios, it's still dramatically streamlined.

Most people don't itemize now, that's true, but the IRS has no way to know who will itemize and who won't.

We could require all transactions that could theoretically be deductions be sent to the IRS, sure. "Trivially" is not the right word to describe it though. Think about charitable donations to tiny operations that have no IT department trying to figure out SFTP drops to the IRS.

I have to correct my cost basis for RSUs almost every year from my eTrade paperwork. Could they do it correctly in the first place? Sure.

Could it all be magically calculated for me someday, sure, anything's possible. But seeing how financial companies work from the inside, I chalk it up to incompetence more than Intuit's malice.

> Most people don't itemize now, that's true, but the IRS has no way to know who will itemize and who won't.

So just make the people who will itemize fill out a form and go through that whole process. Everyone else can just pay the bill and not worry about it.

As it is now, the IRS has a pretty good idea of what you owe, but offers virtually no help figuring it out. If you're wrong, they can come after you with punitive fees years later. In my case, they told me my employer had sent them an updated form with a corrected date on it 2 years earlier - which my employer neglected to tell me. I never knew about the mistake and my accountant assumed it was correct too. So not only did I owe $40,000 in back taxes and interest, my request to not pay fines because it was an honest mistake was denied, and I also had to pay $6,000 in fines. Because of a mistake they knew about and didn't tell me about for 2 years, that EVEN A FUCKING PROFESSIONAL TAX ACCOUNTANT MISSED.

But no - they don't know in advance who will have additional deductions so why bother with any of it for the 90% that don't? People are already going to, and often paying for, private services that they implicitly trust to tell them what they owe. Why can't the literal authority on the matter tell you first?

It sounds like your beef is with the employer, not the IRS.

The IRS knew your return was inaccurate when you submitted it. And it sounds like it was off by enough to trigger statutory penalties, which was appropriate based on the facts provided.

Yes, it sucks that your employer gave you the wrong statement, but there's nothing the IRS can do about it. Your employer had a legal obligation to give you the corrected statement when they filed a correction with the IRS, and if they did not your recourse is to go after your employer to make you whole for the penalties and interest owed. The IRS is not in the business of determining who is telling the truth about not receiving legally required documents.

Why can't the literal authority on the matter tell you first?

Because Intuit and HRBlock spend a lot of money preventing the IRS from implementing that sort of system. The IRS has proposed an EZ-file system like they have in Australia or in the EU many times, and has been shot down every time.

>> The IRS knew your return was inaccurate when you submitted it.

And didn't tell me for 2 years. I'm fine to pay what I owed. Not really cool with 2 years of interest and punitive feeds.

Believe me my HR rep got an earful, but unless I want to put up money to sue, that's all that will be happening. A lawyer didn't think I stood enough of a chance or would gain enough per hour to take the case on contingency.

The IRS knew in the sense that the computer system knew when it processed your return. No human knew until they reviewed your return, a review that was probably triggered because your return was flagged for the uncorrected discrepancy.

That's largely irrelevant. A computer picks up a discrepancy but no action is taken, and then I'm on the hook for interest and late fees?

But then I've heard "it's your fault we programmed the computer that way" from more than one government entity.

Literally every other first world country sends a receipt with how much the government took, how much you're owed or how much you owe and the ability to amend. Ours is intentionally made more painful because of anti-tax zealots that want it so and have admitted it. There is zero reason our taxes need to be as stressful or as Stone consuming as they are. Most of the time your "donations" still don't add up to more than the standard deduction. If you're wealthy enough to be above that, you're probably already using a tax professional and own either real estate or a business.

The IRS could actually write the software themselves and fully integrate what they already know with the option to fill in what they don't.

Yes, they could... If Intuit and HRBlock didn't spend a lot of money each year preventing the IRS from doing exactly that.

The IRS has proposed this many times, and have been blocked by Congress just as many times.

I'll grant you that they don't know your donations and major tax deductibles. But your medical expenses would have to be very high before you would even report them to IRS in the first place.

Do you directly spend more than 10% of your gross income on medical expenses? No? Then you can't deduct them.

In addition, most medical expense reporting is already reported to IRS. They literally get your whole pay stub information - gross pay, withholdings, 401k, medical deductions, pre-tax expenses, etc...

PS: I ran a company in one of the "high regulation" EU countries and the amount of tax prep I do today in USA jumped from 30 min per year for myself and 3 employees to 30h per year myself! Oh... I didn't have to pay anything to file my tax documentation online and I got my estimated tax docs pre-filled by the tax authorities.

Because lobbying is legal, and excellent ROI for TurboTax's maker.

Because it's a racket. Both government and the CPA cronies are complicit.

Pure and simple.

Rational countries disallow these kinds of activities, and give you all the information about you that they have collected. But Intuit would lose a lot of $79 customers.

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