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Comment by rm999 | Hacker News Reader

This stuff aggravates me. My taxes aren't abnormally complex (single, one state, very few deductions, one w-2), but I get several 1099s for my investments and end up spending an hour filling them in manually, importing CSV files from my brokerages, and double checking the numbers. What annoys me is all the forms clearly state the IRS has also been sent this information; I'm literally filling out forms in a slow, error-prone way just so the IRS can run a simple == check to make sure I entered them in correctly. I feel like it's something my third grade teacher would force us to do to kill time.

I don't care about the 30 dollars turbotax charges me, I'll send 30 dollars straight to the CEO or promise to burn it. What bothers me is that I've been forced to do manual data entry - a pet peeve of mine as a programmer - because the government has been lobbied specifically to be less efficient.

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I haven't manually entered more than a trivial amount data into TurboTax in years. Most banks and brokerages seem to be on the direct-download bandwagon these days.

Are you endorsing TurboTax as some sort of appropriate monopoly on tax prep? My bank can tie in to TurboTax, but why should I have to support a private company lobbying to make the tax code worse on purpose just to do my taxes easily?

I went through the same thing as the commenter above and it was OBNOXIOUS. Even worse, there's no real reason for it be done the way it is.

Oh, and then I realized I'd made a really stupid (but easy to make) mistake that altered the amount I owed by $12 and had to file an amended return.

Really really obnoxious.

I'd bet anything people would care 10x less about getting taxed if filing weren't such a hassle.

Tax Slayer is cheaper and better than turbo tax. fyi

I was replying specifically to this paragraph:

> I don't care about the 30 dollars turbotax charges me, I'll send 30 dollars straight to the CEO or promise to burn it. What bothers me is that I've been forced to do manual data entry - a pet peeve of mine as a programmer - because the government has been lobbied specifically to be less efficient.

in which the author reveals that he or she uses Turbotax, but finds the manual entry of data into the program onerous. I found this interesting as a criticism, since my own experience is that I virtually never have to manually enter anything into Turbotax. There was no endorsement of Turbotax or other judgement about the primary question under discussion in the article.

The government is not bad at code because of lobbying, they're bad at code because of fluctuating budgets, low salaries, and ridiculous processes.

Yet, Government programs have excellent customer service as compared to corporate equivalents. I use one example: student loan servicing. My loans were serviced by the largest company in the business for years, it was pure torture. When the department of education offered to assume the loans, I was happy to have the pain gone. They have been absolutely lovely to work with, clear, transparent and... helpful.

some government programs have excellent customer service as compared to some corporate equivalents

I am sure we could find counterexamples here.

Ever been to the DMV?

I've been to the DMV to get an ID and it wasn't bad at all. The worst I've seen happen to other people is a long line. What are the big problems people apparently have with the DMV all the time? I'm from NY if that makes a difference.

Most Texas DMVs are hugely understaffed, I assume deliberately because they don't want to fund more staff, so the wait is generally long, like 2-3 hours long, and the facilities you're waiting in are old and poorly maintained. However, that's pretty TX-specific; TX generally underprovisions government services. The CA DMV is much nicer, and you can even book a specific time online!

The CA DMV's online booking is convenient, but it really becomes the only way to get service.

I made an appointment for mid-afternoon to register my motorcycle. I was in and out in 15 minutes.

When I had gone in 2 years ago to get my drivers license, I didn't know about making appointments. I spent 5 hours at the DMV that day.

For many CA DMV services, if one is a member of AAA, a AAA (CSAA) office can handle the process easily.

This convenience or a single roadside service call can make the annual fee worthwhile (but check first if they can/will tow/service a motorcycle!)

You can renew your license in Texas online every other cycle, the only reason it's every other is they want you to come in to refresh you photo every decade, so make an appointment.

Yeah, I do it online when I can, but I had to go in in person in 2011, and it wasn't particularly pleasant. I didn't know you could make an appointment; when I asked at the time you couldn't. Seems like there is now some kind of "get in line online" feature, though it's not available at all locations: http://www.txdps.state.tx.us/administration/driver_licensing...

Blame your city government. St. Louis City Hall houses the DMV and all other city offices and the service is stellar. I've yet to have a bad experience in over two dozen trips there.

Stop telling people about that DMV branch in city hall! It's one of the best kept secrets in St Louis.

my local dmv is excellent, no lines, no wait, just 2-3 old ladies happy to help.

in a larger area, it's a 'pick a number' and wait drudgery.

ymmv

There's an obvious distinction between state governments and the far greater competence of Federal agencies. As someone who works in a business that's heavily regulated at the local, state, and Federal level, I can tell you that the differences aren't subtle. (It will also vary quite a bit depending on the state and locality.)

DMV in the District had a pretty long line but was fine otherwise. The biggest problem I saw was people who had not read the provided information/required materials in advance of coming then started arguing or pleading their case.

You get problems when the employees cannot interpret the rules correctly, though. For example, proof of residency can be utility bill from the last 60 days, OR a DC property tax bill, and they reject a current DC property tax bill that wasn't issued in the last 60 days.

Yes. In the last decade or so, the Virginia DMV has been painless for typical tasks. Most common tasks can be performed online - registration, license renewal, even obtaining titles after paying off loans (assuming the dealer/bank held the title electronically). The few times I've had to show up in person, I've been in and out in 30 minutes or less.

BTW, despite DMV being the common complaint, I've been dealing with DMV a number of times and never had a problem. Dealing with the IRS was somewhat nightmarish though - while I can't complaint about customer service per se (people I spoke to were polite and tried to help me within what they could) the processes and the transparency were quite Kafkaesque. Basically somehow IRS decided I owe them a ton of money, and I spent several months (not consecutively, just how long it took to be resolved) trying to find out why and how to make them realize it's not true. I never found the answer to the why question but when it got to the question of me owing them something like 17 dollars (there also were cents, I just don't remember the exact sum) I just paid it up to put the whole thing behind. I still don't know why exactly they wanted it and what was wrong (my return was pretty simple and I asked professionals and IRS service people, nobody had any idea).

I had a situation last year where the IRS sent me a notice that I owed something like $20,000 in taxes from a single 1099 they claimed I did not file. In fact, they had missed a decimal point on the 1099 and read something like $75,000 rather than the $750.00 that was on the 1099. After re-sending them copies of the 1099 and all the data I had on what I filed, they responded saying the matter was settled and apologized for the inconvenience, but I'm still bothered by the fact that had that decimal place error been my own fault, I would have been fined $3,000 (according to the documents they sent) but when they make the mistake they just send a form letter apology.

You didn't lose any money, did you? They just made a mistake, nothing wrong with that.

You can also make mistakes too. However, if they are going to be easy with it, many people are also going to make "mistakes".

I've had quite the opposite experience. Dealing with the DMV here in Pennsylvania is always a nightmare with long waits and dealing with employees who are rude and make it known they'd rather be getting a medical procedure than renewing your license or some other aspect of their job. I've only had to deal with the IRS in an official capacity twice and both times (while a PITA for the reason I had to deal with them) the people with whom I spoke were exceedingly polite, helpful, and most importantly knowledgeable about what they were helping me with.

I say this not to say that you're wrong by any means, just to offer another anecdote.

My DMV provides excellent customer service. You sign in and get a number and are routed quickly and appropriately.

DMV offices in many states are actually run as private businesses under contract to the state, not by the state government directly.

In my state, actual government offices are generally less seedy looking, better staffed, and friendlier than the universally-privately-run DMV offices are.

Deputy Registrars are independent contractors and are selected on a competitive basis as described in the Ohio Administrative Code and RFP. Deputy Registrars receive service fees of $3.50 for each vehicle, driver license and ID card transaction; and $0.90 for each vision screening performed. All fees are established in accordance with the Ohio Revised Code. Contracts are generally for two or three years per Section 4503.03 of the Ohio Revised Code.

http://bmv.ohio.gov/rfp.stm

All that said, the private contractors do get the job done, but they do it in a way that's efficient with employee time, not in a way that's efficient with customer time.

DMV in New Jersey is great. It really is. Completely painless for everything I've done there including getting a license, buying/selling cars, trailer registration, etc.

DMV in Connecticut is horrific. One of the worse "customer service" experience.

Which says to me, all of the reflexive "DMV sucks" comments are missing the real question - why does it suck in some states and not others?

The DMV in New Jersey is not great. It is, however, better than it was ten years ago.

It also depends greatly on which office you go to. Trenton is, unsurprisingly, horrible.

Yes, I went to the DMV in Illinois to get my license and managed to complete the eyesight, written and driving tests and walk out the door with my new license in maybe an hour and a half. I didn't even have an appointment.

I'm aware this isn't the case in all states, but that says more about the priorities and competence of the people running those governments than it does anything else. Unfortunately a lot of people seem resigned to the idea that things are going to be run poorly and don't even bother punishing the politicians who are shirking their responsibility of administration and blaming their own failures on some abstract idea that government is always inefficient.

I just recently went to my DMV in sunny CA to get my DL renewed (I made an appointment as without one it's literally half a day in lines). I had slated 2hrs of non-billable time on my calendar, but I was out in 15m - with the to/fro latency, it was 45m total.

Good government service.

I'd say DMV's customer service is better than Comcasts's or Verizon's.

Here in Michigan we have the Secretary of State's Office http://www.michigan.gov/sos/

Service wise they do a pretty good job. They've spent the past decade or so beefing up their online and automated services. In most cases you don't even need to go to an actual office if you're dealing with a license or plate renewal.

The INS (err, BCIS, err, USCIS --a great sign of a well run institution is how many times it needs to change its name cough Xfinity) comes to mind. They are the most horrifying bureaucracy with which I have ever dealt.

In my experience, I would tend to agree that customer service from the government is generally better than corporations, from the DMV (though states my vary), County Clerk Recorders, Passport offices and even the IRS, and they generally seem happier than customer service folk at corporations who read verbatim from support guide trees and are incentivized to do what's in the best interests of the company rather than you.

Yea, I find the DMV surprisingly helpful. The old saying 'Good enough for government work' used to mean over engineered and built to last, now it's a euphemism for how much you can get away with when outsourcing government work.

In my experience of living in four different US states that the quality of customer service in government departments varies from locale to locale and even department to department, just like in corporations. My visit to the DMV here in Texas was quick and easy but the visit to the DMV in Las Vegas was such a maddening experience I'm surprised anyway bothers to get a drivers license in the first place. In the office if someone announced they were going to the DMV we would assume their inability to escape and start looking for a replacement. I heard stories of a guy that got in line as the foundation was being poured for the DMV and he's still there to this day, fifth in line.

I think you probably get the point.

The IRS was recruiting for interns at my university recently, who could eventually become full time workers. However, I found that at best I could enter as a GS-9, and those were positions with 5 years of expirience. The best salary I could get from that was $53,000 in NYC. Even the lowest offers my friends were getting were $60k in a low-cost area.

If the government was able to fund it's IT operations at market rates, or pay outside the GS we'd all be much better off. I don't know about the federal level but my state relies on outside contractors to make web applcations, who mostly do a half-assed job and disappear when maintenance becomes a problem.

The government doesn't do anything at market rates. They employ below market rates, and contract external companies above market rates. This is (unfortunately) by design.

Why do you say "by design"? Whose design?

A certain group of politicians want to replace all government functions with private contractors, and most of those are captured by various lobbying groups representing said contractors.

For what its worth, government jobs are also a bit more secure and generally provide pensions and other benefits.

Whether those benefits are worth a decreased salary depends on the individual.

Unfortunately, the pensions are largely gone the way of life 401(k)s, and with the furloughs that have been coming due to Congressional instability, those things are not really that true anymore.

The GS salaries aren't the complete picture once you factor in benefits and the pension. Traditionally, gov't salaries have been below market rate with the understanding that you and your family would be looked after. But with the current administration and legislation I wouldn't depend on that agreement remaining in place for longer.

If you're young and job hopping I wouldn't look at a gov't job just yet. 35 with a family of 4? I would seriously consider it.

> If the government was able to fund it's IT operations at market rates, or pay outside the GS we'd all be much better off.

I can't speak to market rates but the Federal government does indeed have alternate pay schedules that they can use (in theory) for IT expertise. E.g. scientists and researches have their own specific pay grades for their work, "hourly" workers have FWS pay instead of GS, etc.

You're right that the government workers are generally underpaid in my experience though. I struggle with the same thing here in DC, except that I'm trying to fill GS-5 positions to do work which involves knowing lots of policies, manual interpretation of individualized orders, and having to do all of that in a "customer service" environment.

It used to be that they hired at GS-7, but accelerated you to GS-12 in 2.5 years. GS-9 at 6-months and then 11, 12 after a year each.

Within 10 years you'll get a capped GS-14 spot (105k-136k) and by 15 years, you'll have 5 weeks vacation, 13 holidays, alternative work schedule, 13 days of forever accruing sick time (think family medical leave for having kids). Oh, and you can't be fired unless you do something really stupid -- so clock in and out 9-5.

Oh and you get COLA increases even if you don't get step or grade raises.

I only lasted a year, but I have friends that are still there. The fact that you can't get fired also applies to the colleagues you'll be working with...

The government doesn't pay low salaries to coders, (remember, all they really need are CRUD apps. This isn't rocket science), its just HORRIBLE at hiring.

Rather than leaving any hiring decision to anyone who knows the issue at hand, hiring is done based on a process which is optimized to be legally unimpeachable. When government succeeds, nobody gets credit, but when they get sued, its cover your ass time. This is why ALL government processes, including hiring, are first and foremost about CYA.

I've been able to witness some of this in the State of California. This system is designed to try to prevent the government from overspending on software. They can always point to a public RFP and open bids if anyone objects. However, it is not designed to produce the best value for the state.

First the RFP has to be written, which itself is a very political process and may have been initiated by a contractor/sales-person convincing someone they need the software or process in question. They'll often help write the RFP if you let them. These RFPs are often signed off on by non-technical people who are not qualified to really understand the technical details.

Then the state has to get multiple bids. Sometimes the RFP is written so specifically that many options are excluded. For example, I've seen an RFP that required the state pay for the software. The way it was worded excluded an OSS contracting company from providing support for a Linux solution. A more public example is the LA School District looking for computers for their students. They are required to support both a keyboard and touch, which is prime market for Windows Surface devices. It could theoretically go to something like an iPad, but it makes it very hard for laptop makers to compete.

Finally the state is required to take the lowest bid that meets the requirements of the RFP. To reject a bid the state has to show that it does not meet the requirements. They can't simply take something that is better value, they have to take the cheapest solution that meets the minimum requirements.

You forgot the part about when == is != they get to charge you a giant penalty. That's no accident.

Only if it's malicious or intentional. A mistake will be picked up and you'll get a form a year or two later asking you to accept or challenge proposed corrections. If less tax was paid than required you have to pay that + interest...which really isn't that unreasonable.

I'm not saying the whole system isn't needlessly complex, but don't make it out like the IRS is actively out to get you.

My return for 2008 or 09 was a mess. I had one 1099 I never received from a former employer I'm convinced was trying to screw me, I had one 1099 sent to a former address and a debt forgiveness 1099 from a credit card charge off. I got a packet from the IRS listing the adjustments, what they proposed I owed and very clear and detailed instructions on how to respond to each of the three changes.

Incredibly easy to resolve the entire ordeal within weeks, including full payment.

I have no doubt that if the IRS truly made it a policy to extract as much money from everyone as they could, they would have just audited me and nit picked every math error ad nauseum until I was drowning in penalties and interest.

This is part of why I have a CPA now.

I challenged the adjustments to one of my returns and the most difficult part for me was finding a damn fax machine while I was on hold with a very helpful woman at the IRS. In the end they admitted they made a mistake (to their credit, an understandable one) in saying that I made a mistake and I lost a total of maybe an hour or two of my time.

I'm sure if I didn't have three separate things to verify and pay or challenge it would have been quicker :)

I ended up challenging one of the three and I spent more time writing that letter and including supporting documentation than anything else.

>> If less tax was paid than required you have to pay that + interest...which really isn't that unreasonable.

If I pay too much, do I get interest back on the overage?

If you made the mistake of paying too much, why would the government be liable for the interest on that error?

It's not so much of a mistake, per se, but a function of dealing with estimated tax payments as a self-employed person with fluctuating income. I could very easily pay the amounts required, and then suffer a bad Q4 and have a much lower tax obligation than what I've paid in, all while meeting the mandatory minimums that the IRS requires me to pay quarterly.

Of course, I'm not allowed to just pay the full amount when due, which would solve the problem (for me, but potentially cause much larger problems for people and the government w.r.t. those who don't/can't budget appropriately).

It is nice to hear (from fotbr) that in the case of an actual mistake on behalf of the IRS that they actually pay interest... I did not know that, and wouldn't have expected it.

I got paid interest because the IRS took longer than they were supposed to when they processed my return claiming the first time homeowner credit. I wasn't expecting it, and I certainly wasn't expecting the interest rate I was paid to be higher than any non-credit-card interest rate, but it was.

I treated myself to a bottle of Lagavulin 16 and a couple good cigars.

Yes, usually.

No one pays penalties for simple mistakes. That's what FOX news tells you, but it's not true. We've made five-figure goofs on taxes in the past and a simple letter explaining the mistake (assuming it's an explainable mistake and you didn't get caught in actual attempted fraud) is enough to get the penalty waved.

This is my experience as well, and the experience of everyone I know. At least for us, the IRS is not out to give us the run-around.

Besides, if you think about it, even if you figure the IRS is greedy and only motivated by money, the biggest returns for them are catching fraudulent millionaires dodging tens or hundreds of thousands, rather than slapping you with a $100 fine over a $2.38 mistake.

Another profitable tactic would be to find the sweet spot of people who make enough money that they can be accused of large tax errors, but not make so much money that they can afford to fight it all the way out in court.

Seconded. Mine was a 6 figure mistake. I fact, it COST the IRS money to contact me. Once they sent info I realized the error, and that I did not in fact owe 6 figures. Paid it anyway so my wife wouldn't stress about penalities, restated ( took a year) and then received a refund with hefty interest paid by the IRS. Along the way their support line was helpful in getting some questions answered.

At the risk of seeming flippant, but if you can afford to pay a six figure mistake just "so my wife wouldn't stress", then she probably really didn't have too much to stress about, financial burden of penalties or otherwise.

That's like saying you shouldn't get stressed about receiving a parking ticket as long as you have the money to pay the ticket. Or you shouldn't get stressed if you get dinged with a penalty for not using an airline ticket or (pick your example). The truth is people do get stressed regardless of what their financial situation is. (Add: Logically they shouldn't but they do.)

More to the point the thing that causes stress is the fear of the unknown. The fear of "what if" where you don't know the outcome. One of the ways I have found to at least reduce a bit that stress is to come to the acceptance that the outcome even worse case scenario can be dealt with or how it will be dealt with which seems to work for me as a mind game.

Add: Also the parent's wife may have a different financial upbringing and might have a case of ptsd because of family history or other factors.

My wife has several degrees in finance, and that is her field. So I am lucky that our finances are somewhat more well managed than a lot of other folks. Her "home budget" spreadsheet spans more tabs than many small business' budgets.

With that in mind, we keep a certain amount of "operating expensed" liquid, since we both tend to work in smaller companies than can go sour rather fast. Paying out that check to the IRS sucked up the majority of those liquid funds. If you've read some of my posts in the past (not that I'd expect you to have done so...), you'd see that I'm on the upper end of the age scale here, have been around a while, and managed to enjoy a run through the dot-com 90's. So, I do not have the finances of a single 20-something college graduate.

I looked at this IRS payment as an investment. I was very highly confident that I would get my money back (and then some), so that was the easiest path, all things considered. Had I been more in doubt I would have certainly kept the money, reasoning that I'd rather have them pry it away from me if it came to that.

I didn't mean for my comment to sound like I just go around writing 6 figure checks as the path of least resistance.

I don't know. Not paying what appears to be a 6-figure tax bill would be pretty stressful considering the amount of taxes the IRS would think you were evading.

thinly veiled brag.

No. Just data. I would have been more descriptive, but I was writing that reply on my phone.

If you think it's a brag, I apologize, I try to offer as much insight and perspective from my "learnings the hard way" as I can.

The penalty is in interest on the taxes. We had an incorrect entry in our 2010 return and had to pay about 12% in addition to the deficient amount. That would've been zero if they just verified it in 2011 and told us that there was an error. That is a penalty as far as I am concerned because I didn't get to choose the rate, I didn't get to fight it, and I didn't get to decide when it was due. It was an error on our part and a lack of efficient process on their part caused us to pay extra fees on top of the back-taxes. Whether you call it justified interest or penalty doesn't matter because it still costs me the same.

No. The current IRS interest rate for unpaid tax is 4%. You apparently paid almost three years late, which is getting pretty far afield from "explainable mistake" or "charge you a giant penalty for !=". Hell, if you had "cheated" and put that money in a mutual fund you'd have made a profit.

> You apparently paid almost three years late

Well that's the thing, the IRS can wait 3 years (or 6 if the error was bad enough), then look at your taxes, and pound you with 4%/year, instead of setting up a job to look at everything right away.

Is that what happened in this case? Again, this is turning into an anti-government diatribe. The original assertion was that the IRS would apply heavy penalties for getting math wrong on the return. No, that's incorrect. Then it was that they'll assess a 12% penalty. No, that's wrong too, it's just a 4% APR.

Now your claim is that they're... what, lying in wait? Deliberately maximizing penalties? That's not my experience (our mistake was caught after about 5 months I think). You have a counterexample?

(Edit: and reading the replies, the discussion has now slipped yet further afield from the original assertion, and in two directions: on one hand, it's now outrageous -- yet somehow still an argument against the reforms in the linked article -- that some people merely have "bad experiences" with the IRS. On the other the IRS are apparently now highway bandits literally robbing people with threat of force. I give up.)

how do you like working for the IRS? Seriously - you're arguing FOR the group that takes money from people at gun point?

Yes. That's how we pay for the public goods that our society relies on.

Since you had a good experience then we are to suppose that everyone has a good experience? I believe there are a good number of stories to show that people have had rather bad experiences with the IRS. Just like you, I'm sure there are stories of people having a good experience with the IRS.

You used yourself as an example, he used himself as an example, so I fail to see how he is required to provide another counterexample to you at this point.

Yup, 100%. I did the same, it was a big botch that I then took 6 months to finally get around to addressing. The IRS sent a few simple letters, and in the end there were no penalties-- I think I paid some ridiculously low interest on the money I owed and payed past the grace period they gave me from when I found out about it.

Interestingly - my experience, on innocent mistakes, has been varied.

I got hammered owing 6 or 8 hundred dollars for a $200 mistake when I was 10 years old and making money off of my paper route. (No, my parents didn't cover the bill nor do my taxes.)

And I made $10,000 mistake five years ago and they said "Oh - whoops, pay your bill and be more careful next time" and then called it a day.

We've become a nation of men instead of a nation of laws.

That is a reasonable conclusion to draw. But not the one I draw.

However there were 20 years between the 2 events.

And the first was found because of an audit, while the second I found and reported within a few months of filing.

There’s a lot going on here. The lesson I draw is: different circumstances different results. But both good and bad results are possible, for fairly similar inputs into the process.

> the first was found because of an audit

The IRS audited a 10 year old?

If it became known that they wouldn't audit a 10 year old, bad actors would certainly exploit it.

That they did. I assume it’s for the reason that maxerickson stated. These where some /really/ simple taxes.

Other than the huge (for me) fine, it was a fairly painless experience. My parents did handle it - but even for them other than the stress of knowing it was happening, I think it involved not too much work for them, and as far as they where concerned had not too bad an outcome.

I do suspect my parents double-checked my filings from then on a lot more closely than they had before.

> That's what FOX news tells you

Downvoted for egregious politicking. Let's skip the drive-by attacks on FOX and MSNBC, dailykos and drudgereport ... unless they're relevant.

I can see where you're coming from but given some of the content of the original story it's not entirely irrelevant.

I actually do wonder a little what Grover Norquist's deal is here. I understand his politics (sort of) but I assume receiving a statement laying out the calculations the government is going to use against you could only be an advantage when strategizing how to reduce one's tax bill. That he'd be against it is odd.

Maybe he really wants the whole process to be as inconvenient as possible so people will sign on to some of his other ideas.

What I've seen listening to Grover Norquist is that you can't take his positions at face value. Example: Before the 2012 election he said they'd primary Republicans who broke the pledge. After the election he started supporting compromises. I don't think you can rely on a straightforward statement of these people's principles.

Well, I couldn't really make a straightforward evaluation of Norquist's principles even if I were ready to extend that kind of trust to him. The guy is on the record as believing that the government's imposition of income taxes is equivalent to the Holocaust.

With him, it's always a question of whether he's crazy in the obvious way or in a more subtle way.

politician and principles, there's two words that don't belong in the same sentence...

He wants to continue using the stories about how awful it is to fill out tax forms in his crusade against the government.

Ten bucks says his organization, Americans for Tax Reform, gets money from Intuit, HR Block, or another similar company. Of course, we'll never know because 501(c)(4)s aren't required to disclose their backers.

How does it help vendors of tax preparation software and services if Norquist and his group succeed in getting taxes reformed, simplified, and lowered?

I think the reason Norquist opposes measures to make the existing tax system easier to live with is that such measures would tend to reduce pressure to implement his proposals to change it. He doesn't care one way or the other about Intuit, H&R Block, or your friendly enrolled CPA, the demand for all of whom would be reduced if he were to succeed in getting his proposals enacted.

As for myself, I happen to believe tax withholding was not one of Milton Friedman's finer inventions[1]. You should get your full paycheck every payday. Then, every quarter, you should have the privilege of cutting a check to the United States Treasury. That would keep taxes on everybody's mind!

[1] http://www.stephankinsella.com/2009/10/fck-you-milton-friedm...

>> No one pays penalties for simple mistakes. That's what FOX news tells you, but it's not true.

Citation needed.

Why are my points negative for my comment? Is it not true that he made a statement about FOX as though it were known accepted truth and did not back it up with a factual reference?

Since I can't reply to you in the other comment:

Like I said, it was an error on our part. I don't disagree that at all. I have absolutely no qualms in paying what I owed. But I wouldn't have paid a dollar over the amount owed if they had adequate systems in place to catch my typos and immediately notified me to fix it. But a lack of proper processes on their part meant it took them 2+ years to find an error and now I owe them taxes + interest. Whether I would've made or lost money if I had invested in mutual funds, stock market, or horse races is not the question. The problem is by making a mistake, I am now at their mercy for an unspecified length of time.

Also the error could not have been avoided by us. My wife was in school and we took the American Opportunity Tax Credit since it was higher than Lifetime Learning Credit. But turns out my wife's estranged stepdad had years ago, unbeknownst to my wife, taken Hope Credit for her by claiming her as a dependent. Long story short, we owed some taxes + interest after filing a correction.

This is where I simply don't understand the thought process. You got burned and had to write a check, and you're angry. And yes, a more efficient and effective tax regime (which is what the linked article is about!) would have caught that faster and you would have been less angry. But that's where this has to stop -- your rationalizations just don't hold water.

I mean, really: how is paying 4% APR on a loan[1] you got from the government "at their mercy?". It's not even a bad rate for an unsecured loan! People routinely pay much higher for car loans, and even now mortgages (which are at historic lows) are only a little better.

[1] Which is what this is. You walked around with extra money in the bank for three years, albeit accidentally. Why doesn't that fact figure in your analysis?

(FWIW: if the stepdad was really "estranged" and still claiming your wife as a dependent, then you should have been able to fight that. That's not how tax law works. My guess is that they weren't actually "estranged" three years ago, and she probably did meet the definition of a dependent. Again, that's your mistake if so.)

> I mean, really: how is paying 4% APR on a loan[1] you got from the government "at their mercy?". It's not even a bad rate for an unsecured loan! People routinely pay much higher for car loans, and even now mortgages (which are at historic lows) are only a little better.

Because I didn't want the loan. What's not to understand. I wouldn't have had a problem paying the full amount if they had told me sooner. Also it was over 6% because it was 2+ years and not 3.

> My guess is that they weren't actually "estranged" three years ago, and she probably did meet the definition of a dependent.

I'm certain it met the definition but not the spirit. It wasn't worth having us fight or prolong this. As it is it took 8 months, four registered letters, 20+ hours on the phone, and numerous meetings with my tax attorney to get this resolved. IRS didn't just say "Cannot qualify for Hope Credit because lifetime limit was reached." They outright denied it and asked for the full amount with interest immediately. If this was a business deduction like restaurant bill, we would've paid it immediately. But denying education credit without any reason why? We had no idea her 4 years credit was already used. We had to contact her school, Sallie Mae, review all of our past records etc. and finally our accountant suggested that maybe when she was younger, someone claimed her.

This 2 year $500 'unsecured loan' at a wonderful interest rate cost me easily over $3k and delayed my citizenship process by 8+ months. Did you know if IRS has an open claim against you, you cannot file for citizenship even if you're married to a citizen, lived in US for 13 years and have a green card? I'm not angry. I'm just saying their systems and processes leave much to be desired.

The facts keep changing here. How does a 12% interest accumulation on a $500 loan come out to $3000? Or maybe the $500 was the interest, in which case your "loan" amount was $4167 (which, I'll just say again, is hardly an insignificant fact -- lots of people would love to get a $4k loan at 4% with a 3-year baloon payment!). And I don't see why you ended up paying the remaining $2500k to a lawyer when even you admit the tax liability was correct (and in any case why would you pay >50% of the amount being contested on the lawyer anyway? That's just not worth it.)

The one item that strikes me is the bit about the citizenship. And I can clearly see how that would be a huge disruption. But frankly I'd blame an unjust INS policy here. I don't see how you're pinning this on the IRS for correctly (if inefficiently) enforcing its tax code.

Interest was just $65-$70 or so on the $500 'loan'. $3k was in accountant, tax attorney, paperwork fees. We also had to pay her school to send notarized transcripts to IRS because they wanted proof that she even went to school. And since the IRS letter arrived just 2 days before their deadline, we had to pay extra to the school to get it delivered overnight. Most annoying part is that Sallie Mae was the one that gave out the loan directly to her school.

I'm not saying the citizenship was IRS fault. I said a $500 'loan' that I never asked for, had no intention of 'stealing', had no way to know was pending, ended up causing months of paperwork, hassles, and undue stress. It is appalling that people expect me to treat this like a wonderful tax refund instead of what it was - absolute waste of productive time.

All of this could've been avoided by a single rule in IRS tax processing system that auto-sends a letter or email saying 'Our records show X yrs of Y lifetime credit have already been claimed. Please refile.' And I'm certain that I'm not the only person who had to go through a similar thing.

Because I didn't want the loan. What's not to understand. I wouldn't have had a problem paying the full amount if they had told me sooner. Also it was over 6% because it was 2+ years and not 3.

You had the use of the money in the meantime, which has a value. As for the delay in your citizenship, IRS does not make that rule, it's written into the immigration law.

"No one pays penalties for simple mistakes. That's what FOX news tells you, but it's not true"

My first reaction is "agree" as I have been through this as well.

But now I will modify that agreemet to recognize that not everyone is smart or capable enough to know how to approach fixing something like this with a letter. Or to take the time to read the letter or understand what is going on. Or maybe they go to the clerk at the tax prep office and they are clueless so they ignore the letter and then they have a bigger problem. Stuff like that does happen. There are probably more people who don't know or have the resources to handle this then people that do.

As an aside many years ago I received refunds of thousands of dollars of overpaid sales tax to a state by simply submitting a letter and a spreadsheet which they never audited or checked. I could have said anything with practically any amount (iirc maybe 20k was the amount requested inflation adjusted approx.). By simply presenting a spreadsheet showing the errors each month and writing a letter a check arrived back cheerfully iirc 6 mos. later. Just like that.

I should point out that I completely agree here. Streamlining any sort of manditory process, especially one like this that can affect people financially, is always a good idea. That, after all, is what the linked article is about.

But I'll also say that if you want to address tax complexities in a way that will most help those in need, catching unclaimed EITC returns (something like 30% of eligible filers don't claim it, I believe) is a much better use of effort than trying to eliminate underpayment mistakes.

I've paid penalties for an IRS mistake. I submitted my returns, and the IRS said "We found a mistake, here's $300 more than what you thought we were going to refund you!".

A few months later I got another message from the IRS. "You made a mistake and got $300 too much! Pay us back + interest."

Didn't feel like fighting it because I heard that can go south easily, especially for such a tiny amount, so I paid it back with the interest.

Rubbish. I made a $250 mistake on my tax return a few years ago and they just wrote me a nice letter about it. The only penalty I paid was some tiny dollar amount of interest. I don't dispute that people can have bad experiences with the IRS but they're not going to drop the hammer on you over a math error.

Turbotax has data import for some of the major payroll systems. However, making this work with IRS data directly, is a secure way, it not a trivial task and this task has to be performed by the IRS, not Intuit. Note that this is not what Intuit lobbied against - it's preparing the whole return (which is non-trivial, especially given law changes and thousands of options that exist) against just exporting data. I don't think Intuit would be opposed to the latter, but they are to the former.

'especially given law changes and thousands of options that exist'

The IRS needs to have this logic and data import anyway to be able to verify the return. So, all they really need to do is process everything by say March 15, and allow someone to see the data on a website and click (Accept).

I don't think IRS has all the data in one place. E.g. do they have my local property taxes? Do they have record of mileage that I could deduct for charity purposes? Do they have a value of goods I donated to charity? Hypothetical examples, there can be a lot more options, many of them not so easy for them to verify. That's why they audit - then if I am audited, I'd have to prove them it's true.

What about image recognition for tax documents.. auto-fill based on pictures of forms etc?

Turbotax has a smartphone app which does that, at least for W2s. I've seen TV ads for it.

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