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Comment by toomuchtodo | Hacker News Reader

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)

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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.

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.

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.

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