Lobbyists begin chipping away at Biden’s $80B IRS overhaul

Hence the term 'Revolving Door' https://en.wikipedia.org/wiki/Revolving_door_(politics)#

I don't live in the US and as such have never interacted with the IRS, but you're equating actions with a very different scope.

Looking at it from a game development Perspektive:

The tax filer(intuit in this example) is the client running on untrusted devices, The tax office is the server which has to do a sanity check for each action to assure they're not cheating.

Essentially the "client" has a lot of branching actions it could generate and the server only has to validate one of these.

From my perspective this client should be provided by the government with public apis for alternative implementations, as they're the one's providing the server.

> The IRS already prepares your taxes for you. There is simply no way around this: they have to prepare them to check the numbers they get from personal filings

I'd be interested to hear that I'm wrong, but I believe this is not true. The IRS almost certainly does not calculate on their end what your taxes should be, but rather uses some much cheaper heuristic which they compare to your return and if it's "close enough" then the amount they stand to recover from auditing you is less than the cost to audit, and the IRS simply accepts the difference.

That's different, because all that money is going into a huge, publicly-traded, rent-seeking corporation, so it's OK.

Also, Intuit size always baffles me.

I've been checking on their Open Source work ( Argo CD, Argo Workflows... come mostly from Intuit. I hate the Corporation, not their people ;) ) and when they talked about their K8s deployments in KubeConEU past year I was surprised by them.

Straight from their slides:

  900+ teams
  5000+ developers
  230+ clusters
  7000+ namespaces
  ~77320 nodes

Same here in The Netherlands.

Same in Germany.

I got a message on Saturday of all days that my prefilled tax return for 2022 was ready. Logged in to the Finnish tax services website and found out that was the government owes me about 100 euro in overpaid taxes. Won't be paid out until August though.

I did have to go correct my tax information for 2023. For some reason my work-from-home tax deduction was set manually to 900€ instead of the full 920€ that I'm allowed. Hopefully now my 2023 tax filings will be correct.

Same in Australia. The complexity increases if you have investment properties, or self manage tax, etc. But for the large majority of employees in the country you can simply log onto their website and effectively one-click confirm that your details are all correct, and that's it.

The US system is incredibly complex. The federal government wields very little on-the-ground political power compared to states, but what power it does have is effected via tax policy.

It is as if the EU wanted to regulate mobile phone roaming charges by offering a tax rebate on your phone bill, which it then used to calculate a penalty that is added to the phone companies corporation tax bills. There is no federal EU tax bill passed on to citizens of course but if there were you might continue to have your payroll taxes go to your country’s government but you could then submit your phone bills to the federal EU government to get money back from any tax they levy on you. They’d have to levy it in the first place but to avoid unfairness they offset it against anything your state takes, first.

At the other end of the spectrum, some city funding is done via income taxes. That seems a lot more equitable than, say, the UK where you pay a rate based on the value of the building your landlord bought. Because it’s an income tax though, and because double taxation is anathema to any voter, it too must be used to offset state and federal income tax.

In a way it would be a lot easier if each entity could just stick to one kind of tax. Maybe city funding via property tax, state funding via income tax, and federal funding via corporation tax. The power of federal government is restricted via the tenth amendment, so it’s always going to try to end run states rights via the only means it has — your tax form. That seems unlikely to change. Also I’m not sure my off-the-cuff idea of having the federal government answer only to corporations (via corporation tax) is a very good one, but it is a good example at least of how the machinations of taxation, if not the politics, might be easier if things were picked apart.

Do you do any entrepreneurial activity at all or is your entire income salaried employee work?

Same in most countries.

The US was a weird model where they ask you to resubmit the same information they already have in hope you will declare more income than they know about.

In part, because the US taxes you on your global income, not only your US income, which means that there will be income they won't know about unless you declare it.

For the majority of people that only have income from salary, it's an unreasonable burden and Intuit has lobbied the government so that it continues to be a burden.

Funny, but it is the same here in Bulgaria. Terrible, horrible, no good, very bad governmental intervention.

I hear Sweden is also a cashless society with occasional negative interest rates -- sounds wonderful. Are there any benefits? For example if you pay on negative interest rates can you apply that to your income tax filing?

That's funny, my friend just fills out his taxes as soon as they are eligible to be submitted with rough guesses. The IRS sends the forms back to him corrected (they already had the correct form) and then he mails them back again.

The US already has pre-filled forms, the interface for the "pre fill" button is just a bit convoluted.

but think of the children!

And that’s why Norway has been one of the happiest countries for many years

And others, but chiefly this. This is not a technical constraint, it's a lobbying-fueled legal, policy and political constraint. We're keenly behind the ball as technicians on this one.

I'm gonna respectfully disagree. Sort of. Does Turbotax and H&R Block lobby to protect their businesses? Yes, of course. However, that lobbying is basically meaningless compared to the political pressure from the real beneficiaries of the current US tax system: the wealthy and big corporations who spend, say, $5-million on tax attorneys in order to save $50-million in taxes. That's who ultimately created the US tax system, that's who stands to lose the most from reform, and that's who's gonna work to protect the status quo.

A huge majority of folks wouldn't need to bother, and the rest could make changes if they are needed.

The flow in most other countries is:

- Various sources provide the tax authorities with your taxable income, already withheld amounts etc.

- Your tax filing system, which can be the authorities' or a third party's, pulls these numbers and shows them to you.

- If they look good, you press "send" and you're done. If anything is missing, you amend it; if anything is wrong, you correct it.

- If you omit anything that wasn't included, that's still tax evasion and punishable in the same way as omitting data or forms on your IRS return.

An important scenario here is "I have nothing to amend, and I'm sure you got it right" – in which case you don't need to do anything but are still liable for any omissions. Not filing a report is the same thing as filing a default report. And if the tax authorities find anything unclear or suspicious, they can still require you to file one.

It's not exactly a secret what they get in terms of automated reporting from employers and financial institutions, though.

Why do I have to mail them, on paper no less, the same forms all over again?

That’s very much because the IRS doesn’t have the funds for complex legal action.

Are you suggesting they should completely give up auditing middle-income taxpayers? That feels like demanding the police should stop all road traffic monitoring because it targets regular people who are just trying to get somewhere by car.

If the law isn’t enforced for a particular group, it doesn’t exist for them. But completely even and fair enforcement is an ideal that’s usually impossible to reach — the traffic cops only catch a small minority of speeders and drunk drivers.

Sounds like a good reason to eliminate tipping.

Poor and middle class people probably really do cheat on their taxes a lot more.

I used to wait tables. Not reporting most of your cash tips was absolutely standard - you reported the minimum amount necessary to equal minimum wage, so your employer wasn't required to make up the $7.25-$2.15 difference, and both of you had to pay less taxes. Some bigger companies, in collaboration with the IRS, started instituting "tip compliance" schemes, which do really suck in that they assessed your tip income to be a % of sales, regardless of reality.

Additionally, tons of middle and lower class people use not tax software, but local "accountants" of varying quality. In the US, anyone can do your taxes for you. The selling point of these accountants is that they're going to get you back more than anyone else. Well, most people have fairly simple taxes, unless they own a business. There's not much they can do besides the standard deduction and child tax credits. So these accountants claim all sorts of deductions for which their client is not actually eligible. Sometimes they are "smart" and choose ones that are relatively hard to audit (e.g., mileage), sometimes they choose ones that are easy to audit (EITC). A lot of people get away with these for years or sometimes, seemingly ever. I have a close friend who did this type of thing for 10 years before finally getting caught.

A wealthy person is paying a real accountant who is going to do things by-the-book. They're also more able to structure their wealth to reduce taxable income. Probably the most common fraud you see with wealthier people is small business owners claiming business expenses that aren't. Once you get into the ultra-wealthy, there's all kinds of entirely aboveboard games they can play.

Have you heard of people paying fines for getting their taxes slightly wrong?

I know people who spend 5 minutes filling out the form with rough adjusted guesses based on the previous year, send it in, and thus trigger the IRS sending the corrected version.

They will charge you extra [edit: I meant "the amount you owe"] if you underestimate, but this is hardly a fine.

This is a myth that the IRS already knows what everyone owes. They usually have most of your income information because it gets reported by employers and banks. They have information on some deductible expenses but not all. They often don’t have the cost basis for capital gains, so unless you want a huge tax bill, it behooves you to provide it. I didn’t fill out 15 pages of information they already have.

Yes, for 90% of the population who have one W2 and take the standard deduction, the IRS could just mail you the bill. But that was the point of my comment: don’t leave the rest of us in Intuit’s clutches!

The tax code is full of subsidies in the form of "credits". Some are non-refundable, so it only applies up to the amount of taxes you owe. But many are refundable so it can send your tax bill into the negative. That is, a refund. It's a convoluted form of social welfare in all but name.

Because before I was a poor student I was a well-paid software engineer. Not as well-paid as I would’ve liked (and not well-paid enough to buy a degree in cash), but enough to have taxes withheld from my paycheck. The money they owed me was mostly that withheld cash.

In French speaking traditions the magpie is also a thief.

To me magpies are literally thieves. They take shiny objects which are sometimes valuable. I've heard more than one story of people who lost jewelry to magpies. Of course, even though they are territorial it isn't obvious that magpies understand that they are stealing. But their intention doesn't change the result.

Yep, here's the tax code, here's the forms, here's my scanned box of receipts and bank statements. Figure it out. Oh, and while you're at it, take a little license and get creative please, I still need to get my kids through trade school before you evolve and make that work obsolete too.

That seemed really low to me - I've itemized pretty much whenever I've had a mortgage. So I've always assumed for most people with a mortgage it would make sense.

Looking here it seems you're pretty much right - https://taxfoundation.org/standard-deduction-itemized-deduct...

I suspect that whenever it happens it will involve human validation or adversarial AI systems to validate the result from another one. I hope I'm right!

Yeah we cannot damage our sacred economy

That's why the plan includes sending a check / refund to every person, to offset the "tax free income amount", IIRC.

Also - rich people don't really pay income and capital taxes because they have ways to avoid them altogether. (All these "charity funds" they make are just tax avoidance schemes).

Sales tax instead of income tax would be a huge time saver, and effectively work exactly like an income tax, without all the waste.

"Taxing the rich" could be achieved via other means if desired. Some wealth tax (let's say over 100M of net worth, .5%/year or something like that).

And income taxes hit high income people the hardest. It's not fair that I have to pay 6 figures of taxes when other people get away with paying multitudes less than me.

Considering Europe has a VAT of over 20% (27% in Hungary, 25% in Sweden), I'm thinking the consequences are more manageable than you think.