IRS will look into setting up a free e-filing system

There&#x27;s no reason the government couldn&#x27;t just tell me how much money they took each year and give me a chance to contest it if I thought it was wrong.<p>One of my best friends lives in Tokyo and every time I have to think about taxes I get this little pang of jealousy at how sane and un-infested with rent seeking trashcans (intuit etc.) the Japanese system seems.<p>If you need the government to behave against the best interest of the people in order for your industry to exist maybe your industry shouldn&#x27;t exist.

One reason this has been difficult to get approve is that low-tax crusaders have been blocking it. However you want to frame that -- people who want no taxes at all, people who simply don&#x27;t want taxes to go up more, whatever.<p>Automatic income tax withholding was opposed for the reason reason(s). People who want taxes to be lower don&#x27;t want the &quot;pain&quot; of taxes to be hidden. They want people to cringe every time they write a check for tens of thousands of their hard-earned dollars, not just have it magically spirited off to the government.<p>Filling out taxes helps share some of the same pain. Every year, every tax filer thinks &quot;man, taxes suck.&quot; This undoubtedly has at least some effect on voters&#x27; willingness to pay even more.

One of the hurdles here is that the IRS has increasingly deputized tax preparers as their first line of enforcement via preparer penalties [1].<p>Another is that a free filing system with pre-populated returns shifts the information asymmetry involved in tax filing to be fully in the taxpayer&#x27;s favor. Many people have an &quot;I need to report everything because I don&#x27;t know what the IRS knows&quot; mindset. If the IRS populates a taxpayer&#x27;s return with all the info they have, there&#x27;s no incentive to report anything not listed.<p>[1] <a href="https:&#x2F;&#x2F;www.irs.gov&#x2F;payments&#x2F;tax-preparer-penalties" rel="nofollow">https:&#x2F;&#x2F;www.irs.gov&#x2F;payments&#x2F;tax-preparer-penalties</a>

As someone who worked on policies directed at the low-income population, all I can say is, it&#x27;s about time! The time and energy we put into promoting the District of Columbia&#x27;s EITC campaign, helping recruit volunteers to prepare taxes for free, etc. could have been much better spent.<p>I know there are challenges, mostly confronting lobbyists as the articles mentions. But we can put a man on the moon. . .

The passive phrase &quot;will look into&quot; fills me with dread. Old Seattleites will remember voting for a light rail system, only to watch friends of politicians get hired to &quot;consult&quot; on the project and piss away the entire budget in the consultation phase. Just do it!

We pay taxes wrong. A silly example shows this to be true.<p>Suppose there&#x27;s a planetary government and a solar government. Hear me out.<p>Filing a local, state, federal, planetary, and solar return each year is stupid. The solar government shouldn&#x27;t process trillions of returns.<p>We should file local. Local should file state. State should file federal. Federal should file planetary. Planetary should file solar.<p>Now take away planetary and solar. Clearly the way to traverse a tree is one level at a time.

My household spends 2 weekends per year on taxes. We own a few companies and would otherwise be spending time on those companies(or maybe our families).<p>A streamlined tax system is worth 4 days per year. I imagine that in the future, it will take more time as our businesses grow.

Like we have for years (Netherlands). We used to have an application you could download to fill your returns. It could be downloaded for Windows, Mac and Linux. Now it is just a website and it is very elaborate. Most people can go through the wizard and click OK; everything is pre-filled. Only if in some cases you require to fill in extra&#x27;s. Like selling your house and buying a new one makes the returns trickier. In those cases people often opt for letting the tax returns be done by a professional (well at least: I do).

Isn&#x27;t one of the legitimate barriers to an easy tax system that we have such a patchwork of non-communicating state governments and tax policies that for many people a pre-filled form would be badly missing info, or worse, missing out on credits people are due? Although, maybe no worse than it is now. It feels like the states treasuries&#x2F;tax collectors barely talk to the IRS (oversimplifying of course).<p>That and there are so many non-automatically-reportable exceptions (income doesn&#x27;t have to be logged and calculated consistently and sent to the IRS), loopholes, deductions, etc. in tax law. Although, again, most of the population could be satisfied &#x2F; correctly done with a baseline product. At least brokerage capital gains started being reported automatically (and mandatory) although I notice there are tons of errors than can crop up, as well as exceptions that break the system.<p>Not saying I like the situation Intuit keeps us in, and we should automate as much as possible, but aren&#x27;t there deeper reasons fueling their existence? We should fix those problems as well -- but I suppose that is asking Congress to pass or restrain themselves from mucking up the system every time they want to inject some favored loophole.

The single most frustrating thing about Turbo Tax is the data entry: I&#x27;m not an expert, and chances are I&#x27;ll get something wrong.<p>Now, the IRS has all the information to provide a pre-filled-out tax return. They even do it internally to check that I filed my taxes correctly! Can they legally provide it to me... NO! When I did have to deal with errors, I only knew because the IRS sent me a bill. (Someone sent an incorrect W2 to the IRS.) I never had the opportunity to correct the error before I submitted my taxes.<p>It would be so much easier if TurboTax could hook into an API that downloaded my tax return and then I could check it for errors. I&#x27;m sure they&#x27;ll figure out some kind of upsell that makes it &quot;worth it&quot; for me to pay them $100 as opposed to using the IRS&#x27;s version.

They&#x27;ve almost got a working system already. Free File Fillable Forms (alliteration intended?) has improved each year since it has existed. It has the downside that it <i>looks</i> like the paper forms, which is likely to be offputting to some. If they just finished it so that it (a) does 100% of the math for you (b) transfers 100% of the values between forms for you, it would be a system that could be used by anyone.<p>That&#x27;s not to say that a totally different UI approach (e.g. as used by Turbo Tax) would not be even better, but they absolutely do not need to &quot;start from scratch&quot;

§ 10301(1)(B)<p>(B) Task force to design an irs-run free “direct efile” tax return system.—For necessary expenses of the Internal Revenue Service to deliver to Congress, within nine months following the date of the enactment of this Act, a report on (I) the cost (including options for differential coverage based on taxpayer adjusted gross income and return complexity) of developing and running a free direct efile tax return system, including costs to build and administer each release, with a focus on multi-lingual and mobile-friendly features and safeguards for taxpayer data; (II) taxpayer opinions, expectations, and level of trust, based on surveys, for such a free direct efile system; and (III) the opinions of an independent third-party on the overall feasibility, approach, schedule, cost, organizational design, and Internal Revenue Service capacity to deliver such a direct efile tax return system, $15,000,000, to remain available until September 30, 2023: Provided, That these amounts shall be in addition to amounts otherwise available for such purposes.<p><a href="https:&#x2F;&#x2F;govinfo.gov&#x2F;link&#x2F;bills&#x2F;117&#x2F;hr&#x2F;5376?billversion=enr&amp;link-type=uslm#d1358e1657" rel="nofollow">https:&#x2F;&#x2F;govinfo.gov&#x2F;link&#x2F;bills&#x2F;117&#x2F;hr&#x2F;5376?billversion=enr&amp;l...</a>

Archive link: <a href="https:&#x2F;&#x2F;archive.ph&#x2F;TtmGY" rel="nofollow">https:&#x2F;&#x2F;archive.ph&#x2F;TtmGY</a><p><a href="https:&#x2F;&#x2F;web.archive.org&#x2F;web&#x2F;20220907130035&#x2F;https:&#x2F;&#x2F;www.washingtonpost.com&#x2F;us-policy&#x2F;2022&#x2F;09&#x2F;07&#x2F;irs-free-efile-biden&#x2F;" rel="nofollow">https:&#x2F;&#x2F;web.archive.org&#x2F;web&#x2F;20220907130035&#x2F;https:&#x2F;&#x2F;www.washi...</a>

From the article: &quot;The Internal Revenue Service will spend $15 million <i>studying</i> a free, government-backed tax filing system&quot;. It&#x27;s a long way from studying to implementing. Intuit pays their lobbyists to make sure this doesn&#x27;t happen.

Hahahaha... everyone know what when someone says &quot;I will look into it&quot;, it means there will be absolutely no action taken.<p>hahahahahahahahaha

If people think the problem here is simply lobbying by a few companies, you are WAY underestimating the problem. This is not as simple as building a website. There&#x27;s an entire, incredibly outdated system that needs to be rebuilt and totally reimagined from the ground up.<p><a href="https:&#x2F;&#x2F;www.washingtonpost.com&#x2F;opinions&#x2F;interactive&#x2F;2022&#x2F;irs-pipeline-tax-return-delays&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.washingtonpost.com&#x2F;opinions&#x2F;interactive&#x2F;2022&#x2F;irs...</a>

They are going to look into it for $15 million dollars. Give that $15 million to a company like VMWare Tanzu Labs and they will deliver quality software which we can all use.<p>That being said, i don&#x27;t expect this to happen in the next 5-10yrs because of ~bribing~ err lobbying (because this is America). TurboTax and H&amp;R Block are not going to let this happen.

As a tax preparer I have been hoping the previous attempts to make a system would prevail. Intuit and other companies have been blocking these things for a very long time because they mislead people into paying for their e-file instead of allowing people to use the proper IRS free e-file they are required to offer by law.<p>This would reduce some of my business but also free up time for the people that actually need preparation services such as people who have a lot of deductions, businesses, rental properties, etc. My overall business would only change minimally but the cheats at Intuit, etc. would lose a lot of money in comparison because they wouldn&#x27;t be able to charge money for a free offered service that is hidden as well as they can get away with.

From the article:<p>&gt;&quot;The Internal Revenue Service will spend $15 million studying a free, government-backed tax filing system under a provision in the sweeping climate and health-care law Congress passed this summer.&quot;<p>Why does &quot;studying a free filing system&quot; require $15 million?<p>&gt;&quot;Now lawmakers including Sens. Elizabeth Warren (D-Mass.) and Sherrod Brown (D-Ohio), who pushed for the IRS free-file study, say they hope the funding will encourage the agency to more vigorously pursue its own platform.&quot;<p>This is the congress who had been cutting the IRS funding forever[1]. There&#x27;s no way that the IRS can pursue its own platform without Congress loosening the purse strings.<p>&gt;&quot;Sen. Ron Wyden (D-Ore.), chair of the chamber’s Finance Committee, asked the IRS to conduct a taxpayer opinion survey on an e-file system and consult a vendor to begin to build a government-backed platform.&quot;<p>I think this answers my above question of why &quot;studying a free filing system&quot; requires $15 million. I&#x27;m guessing the &quot;vendor&quot; here is McKinsey or one of the other big 4 consulting firms. They will hoover most of the $15 million with the results of the study being &quot;if you pay us, McKinsey, a hundred million dollars we can definitely build this for you.&quot;<p>[1] <a href="https:&#x2F;&#x2F;www.propublica.org&#x2F;article&#x2F;how-the-irs-was-gutted" rel="nofollow">https:&#x2F;&#x2F;www.propublica.org&#x2F;article&#x2F;how-the-irs-was-gutted</a>

You could fix the tax system in a few easy steps:<p>- Eliminate capital gains tax. Taxing capital gains is essentially blind theft, and there&#x27;s a strong moral foundation to stop doing it. I believe the US would have greater economic prosperity by eliminating a capital gains tax.<p>- Just tell people what they owe&#x2F;what they are owed. You&#x27;re the IRS, there&#x27;s no reason why I should be telling YOU how much I made when you already know the answer. If I think you&#x27;re wrong, I can prove that.<p>- Stop auditing people who are making less than $5m&#x2F;year in income. The amount of revenue recovered from smaller earners is negligible and resources that now go to the IRS to staff thousands of agents could be used a hell of a lot better.

I can&#x27;t tell you how relieved I am to hear that the overworked and underfunded Internal Revenue Service is going to &quot;look into this&quot;. Maybe my grandchildren some day will have a more pleasant experience filing their taxes.

This seems like a marginal improvement at best. If your taxes are at all complicated, this likely won&#x27;t be sufficient and you&#x27;ll still be paying professionals. If your taxes are fairly simple, you can already file for free without too much effort. I suppose there is an in-between group who may benefit from saving the $50-$200 for more advanced online self-filing. I&#x27;ve been that person many years in the past, but I could easily afford those fees.<p>Better to have invested that $15 million in radical ways to simplify this entire insane(ly stupid) process.

Will there be a beta or early adopter version for people to provide feedback and will it have a security&#x2F;privacy bug bounty program from day 1?

Just repeal the 16th amendment - the income tax is too intrusive, and its too much of a temptation for politicians to use it for social engineering. There are other ways to tax that do not require the government to know everything about what everyone is doing.

Even the evil Chinese government do better in this..<p>For the majority of people, the tax deduction is just in your income, and you have a (although questionable in privacy) mobile app if you are getting tax return or need to file for other off-the-book incomes.

Only in the US would there be a system where you have to pay money to pay taxes.

If the system were setup with...<p>-NO DEDUCTIONS WHATSOEVER!!! -Flat single digit percentage of gross wage.<p>There would be no need for the entire Tax Preparation industry.<p>Our government hasn&#x27;t worked for: We The People in decades, they could have implemented this free-filing system at any time, and yet they have not.<p>Our government doesn&#x27;t work for us. They&#x27;re not going to make paying or figuring out what&#x27;s owed to them any easier for us. Why would they?<p>If the feds make preparation and filing easy for us, we&#x27;ll all get to see just how far the big red-white-and-blue dick is shoved up our collective asses.<p>They sure wouldn&#x27;t want that, now, would they?

&quot;look into&quot; == probably not going to happen

Slightly hard to believe almost because of Turbo Tax and others lobbying so hard to keep their business making hand over foot in cash.

Free is great but with 143 million taxpayers a nominal $10 fee could make such a system self-funding

$15 million to “study”. Doesn’t sound like anything salient but maybe a step forward.

How &#x27;bout they focus on fixing the one they already have (freefilefillableforms)?

how much is intuit pouring jnto lobbying against this win for American citizen

&quot;will look into&quot; is code for will not do.

The stock price of Intuit dropped by like 10,000% with the sheer insinuation of such a thing occurring.

Free automatic filling system? yeah right... they are wanting people to forget credits and loopholes.

The real solution to taxes and filing is: Have the government send me a bill each month.

which will cost 300M and not work.

Turbotax: <i>*sweating intensifies*</i>

look into = 5y+ ETA

oh, that&#x27;s nice of them to &quot;look into it&quot;. Just about all the other western nations either do taxes for the citizens or provide a free system for citizens...<p>a neoliberal exploitation plantation, if you can keep it...

IRS will look into not charging you more to use a service to be robbed. Got it.

I would just rather get rid of taxes. Sort of tired of paying for the 1%&#x27;s beach vacations.

Or they could save a TON of time and money by abolishing the income tax and going to a direct, national sales tax.<p>(Or a 1% wealth tax on everyone... but our Billionaire Class won&#x27;t stand for that.)