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Comment by rocketbop | Hacker News Reader

> A direct-to-IRS e-file system is wholly redundant and is nothing more than a solution in search of a problem," said Rick Heineman, a spokesman for Intuit, the company behind TurboTax. "That solution will unnecessarily cost taxpayers billions of dollars and especially harm the most vulnerable Americans."

Extraordinary that he could say that sentence with what I assume was a straight face.

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"A fence around the chicken coop is wholly redundant and is nothing more than a solution in search of a problem," said Sly the Fox. "It will unnecessarily cost the farmer thousands of dollars and especially harm the most vulnerable chickens."

More like an escape door in the coop; the big-government-hating, freedom-loving chickens still can choose to stay in the coop.

On some counts, he is not wrong.

It will cost taxpayers billions of dollars. Those billions of dollars will be well spent, and may be a net 0 cost for taxpayers after the savings on eFiling.

This is a revocation of the license to print money by the tax prep industry.

I am always intensely skeptical of the phrase "cost the taxpayers" when presented as a pure loss. It is almost always the opposite. It's like saying "Exercise costs a person energy and nutrients." Well, no shit, but you get more value out of it than you input in the form of burned calories and muscle strain.

Really well put. It costs the taxpayers trillions of dollars to support the United States.

Billions of dollars is a massive overestimate.

It will indeed cost dozens of millions, but billions? Come on.

We're not building the F-35 here.

Look up the cost of the healthcare.gov website project*

People complain about government contractor costs for a reason

*Last I checked it was north of a billion in 2014 dollars

Great example. It was the genesis of the US Digital Service and 18F. Complaints are valid, but so should be recognition that the government took rapid action to course correct. Promises made, promises kept.

https://www.usds.gov/report-to-congress/2016/healthcare-dot-... (US Digital Service: Stabilizing and Improving HealthCare.gov)

https://archive.is/Boysy (Washington Post: White House launches ‘U.S. Digital Service,’ with HealthCare.gov fixer at the helm)

https://www.usds.gov/report-to-congress/2016/projects/

https://www.itdashboard.gov/reports

And a project close to my heart as an identity/auth wonk: https://login.gov

Healthcare.gov on the backend had to interface with systems from a bunch of different government agencies and companies. Many of those systems had not been designed to interface to other agency and company systems. They all had their own APIs and data formats.

That all greatly increased the complexity of the project.

An IRS e-filing system would just be adding a public interface for taxpayers to a system they already have.

It will absolutely cost more than a billion dollars. Have you seen the cost of other government web services?

And, like all software, it is not a one-time cost. Maintaining a system like this is an ongoing cost for decades to come. Well-spent money.

Yeah, the article states some range between 64 million and a few hundred million. But over the course of years, total costs will surely be over a billion. I'm happy to indulge the lobbyist quote in that spirit.

> We're not building the F-35 here.

That's true -- one potential upside of the IRS plan is that an online tax submission site cannot constantly crash into the ocean.

One way for it not to cost tax payers billions of dollars to drastically simplify the tax code while they are at it. A big part of the cost is directly attributable to the complexity of the rules to be followed to figure out how much to pay based on your circumstances. Throw all that nonsense out and all that should be left is a relatively simple "You made X, so you owe X * rate"

The complexity of the tax code is a result of negotiations between various political and commercial interests and lawmakers at the federal and state level. Simplifying it means changing a whole lot of laws touching taxation, which is practically impossible when the people negatively impacted by each change will be lobbying hard against. It's hard enough to get a single bill through congress. If they somehow achieved the impossible feat of changing all bills that touch taxation, the code will start accumulating complexity again starting from the next day.

The complexity of the tax code is a result of the starting assumption that all income belongs to the government and anytime they exempt some kind or level of income that is a "cost" to the government that then has to be offset by other rules in the tax code

The tax code can't ever be simplified... simplification is effectively equivalent to eliminating all the various tax breaks that people are eligible for. A simple (perhaps the simplest) one sentence tax code is "everyone pays 10% of gross income"... this is considered regressive. As you add to the tax code to make it less painful, it grows more complicated.

Some large fraction of the population effectively pays no federal income tax at all. The rules for exempting them and discounting them to the point of $0 owed alone accounts for some significant portion of the tax code.

You can make a progressive simple tax.

The problem is not progressive taxation, the complexity comes in when government attempts social engineering via the tax code by incentivize behavior they deem "good" and penalizing behavior they deem bad

i.e tax credits for EV's , children, different taxes for married vs unmarried persons, etc etc

If you make it progressive enough to satisfy popular opinion, then you'll have something alot like we have now. The social engineering, as you call it... those are what people think of as "fairness". No one's going to win office simplifying that stuff away.

Lay off the Sim City, Herman Cain

Great idea. Let’s start with your pretax health insurance, standard deduction, dependent and mortgage/salt deductions.

Of course it will cost the taxpayers, that is the point right? I'm tired of paying out of pocket and would rather pay with my tax dollars which I will be paying regardless.

He's probably making the claim that his software, similar software, and tax preparers will find more deductions than the IRS system and cost taxpayers billions in lost refunds they're entitled to. Actually creating this system isn't going to cost billions of dollars.

that's being very generous, but i doubt that's what was truly meant. phrasing it that way would be a marketing statement on why to continue using their software over the free version from the gov't who would have a vested interest in you not using all of the deductions possible. those statements will absolutely be made soon. right now, they are only trying to get people to think it is a boondoggle that should be canceled like the superconducting super collider

"Billions of dollars"??

He might be right that it will cost a couple billion dollars.

A one time expense of a couple billion dollars is, like… I mean the public servants working on it should take it very seriously but it is a drop in the bucket, the US budget is measured in trillions. This is one of those “the difference between a millionaire and a billionaire is about a billion dollars” type things, except the billion is the little one.

Edit: I mean there are like 300 million of us, so even it it was shared equally, it is like… for the price of a particularly fancy latte we can all collectively fuck over these middleman tax processing companies, let’s do it!

For reference, Inuit's revenue was $12.7 billion last year, so they single-handedly cost the taxpayers more each year than this whole free system will.

Not just savings on preparation costs for tax returns in perpetuity but also savings in time for entering bank and wage data already sent to the IRS.

>>It will cost taxpayers billions of dollars.

Why on earth would, or should it cost that much? Unless they go full on "not invented here" and write it running on a IBM Mainframe running COBOL that they then pay an over priced consultant to somehow make web compatible

A place I worked built out a SQL server which had a TCO of a million dollars a year. 1 Machine. Don't ask me how it all adds up; the manager over it just quoted me that at a work social one time.

I don't know how much it cost a customer I had to build over a couple decades, but their eCommerce website had an operational run rate of at least 3 million a month just in cloud costs (not including all the other externalities).

All this to say that I can see how it might add up.

Exactly. I read that statement and now I think I need to go to the ER because I strained my eyes from rolling them so hard.

I'm curious what he means by this solution harming vulnerable Americans. Are they the same vulnerable Americans that TurboTax tricked into paying for their product after enticing them in with promises of "completely free filing"?

Nah, it's the shareholders and execs of TurboTax and the likes. How are they supposed to afford another Yacht.

Just a paid shill with no credibility. Reminds me of David Lereah who was the spokesperson for National Association of Realtors during the biggest housing bubble who claimed there was no bubble.

He could do this job poorly from the beach collecting a check until moving on to the next corporate behemoth needing to shovel dreck to the masses. I encourage him to do so while the policy ratchet gets pulled forward and IRS gains this capability. Just look the other way while the lives of 150 million+ taxpayers gets improved ever so slightly.

There are about ~160 million people who need to file taxes each year. TurboTax for each year costs something like $40-150 depending on how complex a version you need. If it costs billions of dollars to role out a free system that's as good as TurboTax, that'll still pay for the cost of TurboTax or similar software within a few years at the longest.

Just for reference sake in this thread, TurboTax has around 40 million users each tax year. Around half of taxpayers use tools to file on their own. So they have around 1/4 of personal filings, and half the do-it-yourself market.

Most of Intuit's business is sheltered from the hit it will take when the IRS completes this system. They'll probably lose a couple billion in sales off the top (out of $13.6 billion the past four quarters).

You could probably take away 3/4 of their entire individual tax prep business and their overall business would still be larger than it was in 2020. I'll be interested to see if it pops the bubbly valuation the stock is carrying (~60 times earnings).

Much better options than TurboTax already exist. I don’t know that a new one, even written by the government, will make a huge dent.

Yes, TurboTax is indeed redundant.

> Rick Heineman

https://www.linkedin.com/in/rickheineman/

https://theorg.com/org/intuit/org-chart/rick-heineman

Straight face? Easy. Everyone has to pay the rent, this guy is no exception.

>"Extraordinary that he could say that sentence with what I assume was a straight face."

If you can not lie and twist the facts you will not become politician / spokesman / etc.

all Republicans and a few corporate Democrats will still fall in line and do what he says.

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