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Comment by titzer | Hacker News Reader

I had to file Australian income taxes for two years. I was kinda terrified of it. I logged into the government website with information I received in the mail (TFN), plus a phone call to link my information to my web account.

My taxes were pretty simple, admittedly. But the government website already had all of my income information pre-filled out. I entered a bank account, entered my health insurance details (hey, hey, affordable universal healthcare), and submitted. I was literally done in 15 mins.

The Australian government practically fell all over themselves to promise me they would get me my refund as soon as possible. They sent a text within hours that promised something like five business days. It was done in three. I never had to deal with them again.

WTF America.

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US could have simple taxes. Basically a standard deduction for everyone. But what that means is getting rid of a lot of tax credits including mortgage interest, charitable donations, education credits, child care, medical care, energy and disaster, just to name a few.

So instantly any proposed changes would get resistance from housing, charity, education, parent groups, medical industry, ESG among others. Think about how many times politicians say "we should encourage [good thing] and discourage [bad thing]". What do you think they're talking about? Changing the tax code.

And if you think the US government knows if you installed solar panels on your roof this year or something, then you're sorely mistaken

You could still have all of those deductions, but let people request that the IRS do their taxes for them, which would cover the 90% of cases where your standard deduction is optimal for you.

They have my bank accounts, they have my brokerage accounts, they have my W-2s. There's no reason I can't just ask them to do my taxes for me.

The IRS might not be able to know about every credit/deduction, but they could host an online form, pre-populated with what they do know (most income sources for most people, family size/child deductions, etc) and then give a simple list of credit/deduction checkboxes/inputs. Even that would be worlds better than paying for TaxCut or a CPA every year, or doing it all manually on paper.

So basically IRS recreates turbo tax?

Essentially, yes. But with income and other knowable data pre-populated and none of the dark patterns and at no charge.

I've had this conversation with (dutch) government employees a good number of times long ago.

I use to wait with filling out a form until the absolute latest moment. I knew they [often] couldn't process the forms until they had all of them. I would get reminders and sometimes a phone call.

I explain my sabotage: If you already have access to these numbers. Why are you asking me for it? If it is up to me I will exercise my right to make a mess of it.

Same for paying taxes: You present it like I have a choice I can pay it or I can not pay it? But if I don't pay it you will give me a 5 euro fine and then a 50 euro fine and then the 800 euro fine and then you take the money out of my account or seize my income. So they choices are: 1) PAY or 2) PAY. Just take it out of my account? Why would you invite millions of people to make a mess from your administration?

I give the employee an example. I can request a form, it is send to my house, at the top of the form it asks for my name and address. As if I have nothing better to do? Then I return the form and someone has to check my name and address???? As if they too have nothing better to do. Multiply the effort by many millions and by dozens of forms and it becomes a horrific waste of of time.

Why are we doing this?

Now it is just a web page that shows the data they have on me. I click accept, even if it is slightly inaccurate and I'm done. Wonderful!

Sweden here. We beat you by 5 min. No seriously, WTF America?

Imagine being scared year after year they're going to come after you with fines and jailtime for missing $100 somewhere. They are famous for being relentless and overworked. They also go after poor people more often than rich people by a long shot (percentage wise, not just absolute numbers) because they know poor to middle class people can't afford a lawyer/accountant to fend them off. It's a racket.

> They also go after poor people more often than rich people by a long shot (percentage wise, not just absolute numbers) because they know poor to middle class people can't afford a lawyer/accountant to fend them off.

Adjusted Gross Income, Audit rate

0 8.9%

$1- $25,000 0.7%

$25,000-$50,000 0.4%

$50,000-$75,000 0.4%

$75,000-$100,000 0.4%

$100,000-$200,000 0.4%

$200,000-$500,000 0.6%

$500,000-$1,000,000 1.1%

1,000,000-$5,000,000 2.5%

$5,000,000-$10,000,000 5.1%

over $10,000,000 8.6%

Please don't make stuff up

https://www.nolo.com/legal-encyclopedia/what-are-the-odds-be...

So this describes P(audit | bracket), the probability of me getting audited give what I earn.

But those brackets are very different sizes. What I'd find more interesting is "do they focus on minimizing the amount of money stolen from other tax payers?" That would be more like the absolute number of audits in each bracket, divided by the total number of audits. (or audit hours, if you want to go for a "bang for buck" type analysis)

I don't know their internal incentives, but I would imagine they have an incentive to get as much money as they can, balanced slightly by catching outright fraud. There's a fixed cost to auditing. Auditing people that they believe have small discrepancies in their taxes just isn't worth it.

I read there's a secret formula that screens out cases that can be considered for audit and auto-approves the refund. It's secret because if you knew it, you could obviously exploit it.

Even the numbers for lower incomes are a little misleading because fraudsters know the probability of audit and know they can exploit the system by using fake identities to file claims for relatively small amounts. Bret Johnson spoke about this in an interview with Lex Fridman [0] and said 3 days a week for 8 months out of the year he was filing a tax return every 6 minutes using fake or stolen identities. Then he spent the rest of the week driving to ATMs around the state to withdraw the returns. Fun fact, a standard briefcase can hold $150,000 in 20s. So obviously the IRS needs to go after absolute fraud as a deterrent as well as the large tax filings where the money is.

[0] https://www.youtube.com/watch?v=cC1LFC0KFSw

You're not going to go to jail because you're $100 off on your taxes.

If you're $100 off on your taxes, they are going to tell you that you're off, give you the reasons why they think you are off, and ask you to pay them.

Now, if you keep refusing to pay, and refuse to provide a reason why, eventually, some point a long way down the line, jail becomes an option.

Or alternatively pay you if you're off in the other direction, which I've had happen to me before.

New Zealand here, the first I knew about my yearly tax obligation one year, was them depositing my refund into my account...

Israel here -- full-time employees generally don't file taxes on their own. Your employer will ask to fill out a single form for any changes in tax status (such as single parent or disability).

On the other hand, self-employed individuals do need to file, which is not simple.

i'm not surprised. I've heard the same from many foreign friends. I think USA is one of the few if not the only country that makes YOU responsible and liable for your taxes. I always thought it was such BS when you hear about it from other countries

I feel like its all to keep accountant and lawyer jobs

> WTF America.

Americans have been programmed to assume anything the government can do, a company can do better.

It's similar in the UK. You collect your end of year employment tax summary from any employers and file your self assessment online for for free using the HMRC website. There are helpsheets for most stuff and it's all over in 20-30 mins

You didn’t trade any stocks, right? Because most of the complications are coming from complex tax situations not from simple salary earnings.

Stocks aren't complex. Your broker has all the information the government needs. In the US, you have to manually enter that data into government forms.

Not to mention there is a standard e-forum you can file with turbo tax and h&r that automatically do all of the filing

Sweden here again. Most of our stock brokers submit our taxes from trades to our tax authority. If you're doing basic buying and selling, it's all prefilled in tax form every year.

This is just not true. While that is more complicated, it's still stupidly complicated to do something as simple as fill out the W-2 form if you have a single job with a salary, and if you're a freelancer with lots of clients that don't pay you the same way and don't give you a salary it's all but impossible.

> all but impossible.

This is somewhat hyperbolic. Reporting income to the IRS is pretty easy. Dealing with deductions and credits is not hard, but is hard to get right. The whole process ought to be much, much easier than it currently is, but it is not "all but impossible". I even managed to teach all 3 of my kids how to handle 1099s and other stuff, and if they were a bit intimidated (they were), they didn't find it actually hard.

I don't believe I'm being hyperbolic. Maybe everyone else is just smarter than me, but every time I filled it out myself it was extremely confusing and difficult to the point where I gave up and was generally told I'd made tons of mistakes when someone fixed it for me.

It's *one* political party wants to make taxes hard so people hate it. If your taxes are simple and if you misfile something, government will fix it before sending you refund or send you notice that you owe them. That means IRS can calculate the taxes. But it doesn't have authority for send you prefilled tax documents.

Which one is that? I've seen proponents and opponents of simplified tax reform on both sides and for different reasons.

Two things going on here:

1. "simplified tax reform" as in "change the tax code to eliminate a bunch of complexity that we think adversely affects the people who vote of us"

2. "simplified tax reform" as in "enable the IRS to precompute the tax forms for 80% of the US population, since they can"

Sure, #1 is bipartisan (even if the things to be eliminated are not).

#2 is opposed almost entirely by Republicans only, just as they are the only party to consistently oppose realistic funding levels for the IRS given the current tax code and legal requirements.

True. Ostensibly, doing #1 could lead to number #2 to a degree. I think both parties have come up with plans to make the filing part easier, but plans from both sides have incomplete or only partially easier implementation.

I think the IRS has made it fairly clear that there are no real technical hurdles to doing 2. right now (certainly, free e-filing is absolutely not a technical problem).

I might or might not support 1., but 2. is doable regardless.

Well, 2 is only sort of doable currently. There are many things in current tax code that are not reported/recorded at transaction time but are required to be reported at filing time, either on the income side or the deduction side. So there's still a lot of manual work involved for many people, but prefilled forms could save some time for the parts you don't have to redo.

You can already efile for free. Implementation and options could be better though.

https://www.irs.gov/filing/free-file-do-your-federal-taxes-f...

2 included the phrasing "for 80% of the US population". That matches (roughly) the percentage with no itemized deductions and (I believe) the similar percentage with no income to report other than W2 and 1099 transactions.

And yes, i use FreeFileFillableForms and have done for many years now. It works, but it's a bit clunky.

Ah, true, although I think 80% is high. That might be the number taking the standard deduction, but there are still credits and deductions even if not itemizing.

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