IRS move toward free e-filing could end years of corporate domination

[douglas9]

Electronic tax filing could soon be as simple as a few clicks on a government website — free of charge.

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. It’s a landmark step toward overhauling the way most Americans file their taxes and ending years of domination of tax prep by private corporations.

Democrats have long lamented that millions of American pay for the privilege of filing taxes, and that corporate tax services take money from the neediest households. Hardly anyone uses the free e-filing options that industry supports because of restrictions on which returns qualify.

But the IRS has lacked the funding — or the clout to outmaneuver private lobbyists — to seriously consider its own e-filing platform, current and former officials say, forcing taxpayers instead to deal with a consortium of private providers and setting the agency back decades in technology and customer service.

https://www.washingtonpost.com/us-policy/2022/09/07/irs-free-efile-biden/

[EYESORE 9001]

1. TurboTax et al can suck it

[dalton99a]

10. +1

[Crowman2009]

23. Hopefully the health insurance industry will be next.

[Farmer-Rick]

2. The IRS should just tell us what we owe

That way they can quit playing gotcha with average Americans. They have all the info on us already.

Other countries provide the info to their citizens and it works. They do their citizens taxes for them for free, instead of trying to catch us making a mistake.

[MichMan]

4. How would the IRS know all one's deductions if itemizing?

Or do you just have to pay whatever amount they say?

[rubbersole]

7. H&R Block found some deductions I wasn't aware of.

But that was before the standard deduction was as large as it is now. They were also very expensive but worth it at the time.

[Farmer-Rick]

8. Well, the standard deduction are done for you

I imagine you will have to confirm the IRS info.

That's how other countries do it. Their IRS say here this is what we think you owe and why (income, # of people in your household and such). You say wait I lost my job in June and I had a new baby. Then they say, ok now you owe this much.

It's not like you can't challenge what they say you owe and must sign your taxes in agreement. And you still have to tell the truth under penalty of law.

It just puts the oneous on the IRS instead of the individual. And you would be less likely to make a mistake.

I once owed $40 in fines because when my spouse, who did the taxes, died, I failed to make 1 quarterly payment and owed more than $1,000 (because of one fewer person in the household) at the end of the year.

Sometimes awful things happen in life and getting fined because you weren't paying enough attention to your taxes when all hell just broke loose seems inhumane. At least a bill from the IRS might get through the fog of grief and would have reminded me.

Instead they wait and pounce on you with fines because your family member who did the taxes died. It's like they are waiting for you to make a mistake. Gotcha taxation.

Guess who is more likely to make a mistake? The rich or the middle class and poor?

[IronLionZion]

13. Have you seen the US tax code?

it's completely insane, by design.

We would need a much simpler system for that to work. I was audited a few years back. The IRS makes plenty of expensive mistakes.

[Alexander Of Assyria]

14. Vast majority simple efile is fine! Canada has it last 15 years! No problem!

Complex return see accountant or buy software!

[IronLionZion]

16. Here's Canada's super simple tax code

https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/canadian-income-tax-rates-individuals-current-previous-years.html

Compare that to the US

https://www.irs.gov/privacy-disclosure/tax-code-regulations-and-official-guidance#irc

[Alexander Of Assyria]

17. The point is simply if you don't have a complex financial situation, vast majority don't,

efile is fine.

Canada is living proof, no need to theorize!

[IronLionZion]

18. OK, agreed on that point

[marybourg]

3. Yup. We've been the victims

of a GOP led sellout all these years. I do mine by hand and mail it in. I find that easier than using
commercial tax prep software. But my generation is dyi ng out, and soon everyone will be dependent on commercial software. It needs to be brought back to a two party transaction; the taxpayer and the government.

[jimfields33]

5. I wish they'd just send a bill or check automatically every year

For businesses they could figure a different way to do this. If you sell stuff on eBay, eBay sends the info to the IRS. If you are in a gig economy, the company sends into. It would cut down so much work and errors. They could even be cool and say tips are untaxed. That really would help a lot of people.

[Farmer-Rick]

9. Exactly

When my spouse died, they did the taxes, I ended up getting fined because I didn't pay one quarterly payment.

Anyway, a bill from the IRS saying we think you owe this much, would have gotten through the fog of my grief. Instead, they waited and pounced with fines when I made a mistake.

I call it gotcha taxation.

[ColinC]

6. I need to file an amended tax return

Found out that because the service I used can't report what I need, I have to file all over again and make it look exactly the same as my original tax return. Obviously if the IRS was more user friendly, I wouldn't be in this mess in the first place.

[twodogsbarking]

11. Why not redo the system so that all this bullshit is not needed.

[LittleGirl]

12. We expats look forward to this efile system

The only first world country that requires citizens to file every freaking year.

[DownriverDem]

15. Great idea

That would be great. This year I have to take and report my RMD money. It is income. Does anyone know if there is a special form for it Fed wise or Michigan wise.

[Bob_in_VA]

19. The company that holds your 401(k)

or other retirement account should be sending you a form at the beginning of next year with the appropriate info. It's either a 1099 or a Form 990, don't remember which. Same sort of form you would get from your bank that tells you how much interest you earned on your savings account.

[iluvtennis]

20. It's about time the IRS comes into the 21st century - good stuff

[Mustellus]

21. EVERY OTHER FIRST WORLD COUNTRY....

... sends you their form with what they know already. How much income your employer paid you. What he deducted for taxes and such. Your dependents (from last year). and so forth....

Then you use the government supplied and validated tax program, for free. Add anything they missed. Change anything that's wrong. Or just sign it and send it back.

Complicated taxes? Well there will still be accountants and tax preparers. For most of the rest of us, a vast increase in simplicity.

And all this was blocked in the USA by the Tax Filing For Profit Mafia.

[PoindexterOglethorpe]

22. Personally, I will continue to use my accountant/tax guy.

My taxes are sufficiently complex that I don't want to do them myself. Plus he knows the tax code, stays up-to-date on it, and is well worth what I pay.

Also, one year he pointed out to me that the IRS gets the information about any stock sales and what the amount realized was. What they don't get is the original cost basis, so they would consider the entire sale amount to be all profit.

If all I had was a W-2, I would definitely file myself. And kudos to you who have complicated taxes and spend ten hours or so doing it yourself. But my tax guy gets it done in an hour or less, and well worth it.