I was just thinking that an open-source tax engine is the way to go in the future. I would like to see it maintained by the USGOV.
I wonder if there is a PR that Intuit filed to add this to the readme.
Seriously, I wonder how much money Intuit has spent to terrify people into using their software. Each year, I look around for alternatives so I can avoid giving them money, and each year I find some reason to grow fearful of an IRS audit and go with the company that has convinced me they are less risky than anything else. I wonder if that is truth, or if I've been programmed to think that.
That being said, audits are incredibly annoying if you didn't make a mistake, especially if children are involved. The Examinations department of the IRS is hard-headed, to say the least, and they will often make any excuse to deny you credits that you are actually entitled to. In order to get a fair hearing, you have to appeal the case to court. (The U.S. has made the appeal and court processes pretty doable even for taxpayers without an attorney, though.)
For those unaware: You get a 1099 when you're paid as a contractor, which means taxes haven't been taken out yet. It's fairly common for temp work and similar oddjobs that don't warrant a dedicated employee.
There was no audit in my case. They just sent me a letter that boiled down to that I had missed that 1099, and they were correct. I was just a little miffed that they waited almost a year to send that letter, which by then had higher interest / penalties than if I had been notified sooner. Still way better than an audit would be, though.
I had an A+ experience being audited after my initial shock. They even have a secure message system where you can communicate via a website with the IRS including uploading files instead of having to mail letters back and forth. Definitely some clunkiness but overall it was solid and worked.
Not sure I'd recommend the experience but I definitely found it nothing to fear. I also found I didn't need professional assistance with being audited (I did seek it out but due to the time of year being so close to the next year's tax due date, I couldn't find someone right then so I decided to try fixing it myself).
There's also the issue that if the code wasn't bespoke but also sold to non-government entities for similar missions (i.e. government does not hold exclusive rights), then it can be protected as the contractors IP. But for the IRS this would be rare, they are pretty unique and often do things their own way.
* You can sort of do this without the code. The IRS is not allowed by legislation to base an audit decision on any information that is not covered by eFile, so contents of forms 1041QFT and 990T, or any attachments to what could have been an electronically submitted form, is out of scope. As long as what you submit in the core set of forms aren't statistical outliers, then you're good.
It really isn't - the point is freedom access, not free use. Information acquired this way doesn't magically become public domain, it may (or may not) have other constraints on it.
See e.g. https://www.justice.gov/oip/blog/foia-update-oip-guidance-co...
Again, IANAL, do your taxes, please. But it does seem like the system is legitimately designed with an ethos of just making sure taxes get collected and isn’t about being vindictive.
What I always do if in doubt is to attach a letter setting out my assumptions. I've outright had to tell the tax authorities I didn't know the real numbers one year, because I realised shortly before filing that I'd lost documentation in a move, and so a whole bunch of details were estimates. Even that was accepted without additional documentation.
Of course I'm sure there are countries that are worse.
If you think you have about $5k in valid deductions, but you can't provide any documentation upon an audit, then that $5k will be reduced to exactly $0 and you will owe all additional taxes plus interest and penalties.
Please explain to me why they are *DUE* said taxes...
What is the gas tax for, what is it intended to perform
What is the lottery tax for, what is it intended to perform
What is income/state taxes intended to perform
Where are the metrics for what tax==intent==outcome results?
Please - give me a detailed response.
On other hand, if you are audited, it is not a big deal as long as you were not intentionally defrauding IRS. My boss used to get audited almost every year for his business. IRS would ask for receipts, and once he provided those, it was end of story.
I'm tempted to go back to paper forms. It wasn't hard, just annoying the one time I forgot to copy line 13 of form 1234 to line 43d of form 5678 and then had to amend my state filings.
Every year when I manually copy information from my W2 onto an online form, I think that tax season must be the biggest data entry clusterfuck in the world.
Complete agreement, though there will in some cases be a need to file forms to supply information that they don't already have. Additional deductions, for instance: charitable contributions, deductible expenses, etc. But those forms should be "here's the information", not "here's the information and a pile of careful calculations implementing an algorithm".
I tend to use taxcut, which is a bit closer to turbotax, but frankly its messed up things that I only found by reading a paper copy of the return before filing and noticing numbers that didn't make sense (doubling values by adding imported values with hand entered ones, that kind of thing). I had problems like that with turbotax in the 1990's but haven't used it since the bootloader fiasco.
https://www.irs.gov/e-file-providers/free-file-fillable-form...
If you’re reading Hacker News, you can probably figure it out.
Why not pay an accountant? Why is everyone trying to do their own taxes? By the time you've spent a couple of hours looking for alternatives... you might as well have just paid a professional to do it!
Spend a couple hours reading the instructions, use the IRS free fillable forms website, and you do it once and every year after it’s quick and easy. Things don’t change much year to year. If you don’t understand, post a question a personal finance forum and someone will pipe in with an answer.
IDK about that. As a non-resident alien for tax purposes for a couple of years I couldn't use any of the existing software (TurboTax, etc). I even tried to contact a tax accounting firm like HRBlock and they had no idea about things I needed to file that I discovered on my own reading the IRS publications. So I did the taxes on my own and every time it was the most painful thing happening that year (yes, that likely means I lead an otherwise stress-free life), it took 3 weeks at least spending most evenings a few hours making little progress on it each day. And at the end of it I never felt very confident about it and I likely left on the table possible deductions.
But if there's one thing doing that helped with is appreciate how easy and painless is to do it as a resident alien with something like TurboTax (takes a few hours instead of weeks) and it helped me understand the terms and instructions of some of the more complex issues that you may have to deal with even with TurboTax.
You need a real CPA with a tax focus if you have "complicated" taxes.
It seems like you are (were) a good candidate for a more comprehensive service for sure. Perhaps a better wording would have been "it's pretty simple as a resident and (W-2) employee," which encompasses the majority of those filing, and who probably don't need a service like TurboTax or an accountant.
So, having an accountant handling all the details, in the en puts the information at your fingertips that otherwise you have to scrape out of the box of receipts/etc. The tax filing parts are easy.
So why do people complain about it so much? To the point where they're writing their own custom software (?!) to do it?
Non W-2 or 1099 incomes with various deductions get things complicated though, and I would punt that to an accountant.
I have always done my taxes myself, on paper, even years when I had capital gains, education credits, 1099s, and small business (single member LLC) income. It's a bit time consuming but not difficult per se.
https://www.ftb.ca.gov/file/ways-to-file/online/index.html
Maybe a bit of an open secret? Found with "site:ca.gov", halfway down the DDG page.
Other little-known, useful USA services:
weather.gov new.nowcoast.noaa.gov
lol bro, I'm employed and married with 2 kids.
I guess that's considered a partnership.
;)
But I also had a few hours to burn. I understand preferring to spend that time with kids instead. But it is worth noting that it’s a much smaller time commitment after the first couple years.
Complexity covers corruption.
Why not just pay the nice mafia boss the protection money, and stop complaining?
First and foremost, it's a matter of principle. It's just not right to have the tax code written in the way it is written. It is written by special interests. If we all just said "complexity is no problem, we'll all just pay a small fee to accountants", not only will that "small fee" keep going up, but it will get more complex, and special interests will be better served to the detriment of everyone else.
Pragmatically I do hire a CPA, and in general like paying for the high level strategic advice. But the tax compliance services should be unnecessary. My tax returns should be a single text document that I can keep in git and copy/paste/update each year.
But why do you even need a tax return? Most countries don't need it for the vast majority of people. Why does the US?
In the case of W-2 data, seems like you can get it as part of a transcript if you want it:
https://www.irs.gov/individuals/transcript-types-and-ways-to...
Of course, you also get a copy of the same W-2 directly, but it doesn't seem true that "they won't give it to you" if you ask them.
However, that doesn't necessarily mean they're public domain. Trademark law still applies, for example.
Additionally, not everything the government uses, even exclusively, was produced or is owned by the government. Often, government contracts allow the contractor to retain control and ownership of the intellectual property. The government may also have copyright transferred to it and retain that copyright. A legal issue I haven't researched is the line between a work that is a government work under work-for-hire principles, and therefore is ineligible for copyright protection, and a work for which the government contracts and for which copyright is subsequently transferred.
Before attempting to FOIA the source code of a piece of government-exclusive software, I would first FOIA all government contracts for the creation of that software. Then you'll have something to go on when crafting the FOIA request you really want.
https://www.irs.gov/privacy-disclosure/use-of-federal-tax-in...
lots of vague stuff, but looking at the Google result, I noticed some differences. Ah, the meta description of the page reads:
Open source software, while it can be useful in many instances and appear to be cost effective, may present a security risk because open source developers don’t typically follow security best practices when developing their software.
Well, there ya have it! :D
https://www.irs.gov/e-file-providers/modernized-e-file-mef-u...
Because many eyes often make bugs shallow, there is a pretty good chance that a public release of the code will find errors that both find funds that are owed to the government and exonerate people who have been incorrectly billed.
What better purpose for the American Fuzzy Lop?
In the UK you can file electronically with the HMRC using their website. It guides you through several forms, tells you what numbers to input from your P60 (end of year notice from employer of salary and tax paid) P11D (end of year notice of taxable benefits) and a few other sources then produces a downloadable PDF copy, and submits them electronically.
It's not for everyone, e.g. Lloyds Names can't use it, but for 99% of people it's fine.
Why is it better in the UK? I don't think we have quite the level of regulatory capture, and still somewhat believe in public services, and spending money to make things better for everyone.
The ProPublica report linked in the OP:
https://www.propublica.org/article/inside-turbotax-20-year-f...