IRS vows to digitize all taxpayer documents by 2025
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let's be real the reason the IRS doesn't go after rich tax evaders is not because they can't find them, it's because they fight back
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Devoidless
Smack-Fu Master, in training
I wonder how long it's going to take for people to cry wolf about this "wasting taxpayer dollars" and being "unconstitutional." The IRS has been way behind the times in regard to using technology and digitizing, well, anything. I can't see this being anything but a net positive and hope they actually follow through with it.
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Until the IRS office gets a call from Congressman X saying “I’ve heard that you’re investigating my friend and community leader Y. I think this is a witch hunt meant to hide problems with your offices in Z district. I’ll be calling for an inquiry into your operations”
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Photon_plumber
Ars Tribunus Militum
Since they already have or could have a copy of my W2, all 1099s and such, why do we have to do our taxes in the first place? Yes, I know. Some powerful entities out there depend upon the revenue for business. Perhaps it's time to rethink the need of yet another group of unneeded middle men who've weaseled their way into taking a piece of the pie.
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Nice IRS.
Now watch as I file my Australian taxes in 5 minutes using a smartphone, because everything is pre-filled (except for my Address because I recently moved)... for free!
Now watch as I file my Australian taxes in 5 minutes using a smartphone, because everything is pre-filled (except for my Address because I recently moved)... for free!
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Proper response to that is thank you Congrescritter X, we've noticed that in our investigations with Ms Y that you've been provided with some "campaign donations" that haven't made it into your campaign coffers. We'll be contacting you for additional information on this.
Don't screw with the auditors.
But seriously. Welcome to the 21'st century America! I've been e-filing in Canada since 2010 and over covid the Canada Revenue Agency went 100% paperless (if you want) and I can upload and download any documents to my CRA account.
I hope that the Treasury Department keeps up that funding as the IRS will become an even bigger target for asshats to try and crack.
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I genuinely believed that this had already been happening for at least a decade (or more).
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I have a masters in Finance, worked decades doing financial analysis. Every year as I unhappily use TurboTax I laugh at our TaxCode complexity. I mean this literally: when review my final return I just laugh.
Long ago I interviewed for a job in Auckland (should have taken the offer in retrospect). While discussing how my salary would be affected by taxes ( I was worried how my deductions, etc. would transfer), we ended in another laugh fest. The guy I was talking to said it took him about 10 minutes to file: Salary*N% basically. Cannot remember, but he was pretty high level mgr.
We will never simplify obviously, but there are many reasons to do so: many wins for citizens and the govt. But then tax policy would not be a tool available to grease the skids for re-election so neither party will be interest.
Long ago I interviewed for a job in Auckland (should have taken the offer in retrospect). While discussing how my salary would be affected by taxes ( I was worried how my deductions, etc. would transfer), we ended in another laugh fest. The guy I was talking to said it took him about 10 minutes to file: Salary*N% basically. Cannot remember, but he was pretty high level mgr.
We will never simplify obviously, but there are many reasons to do so: many wins for citizens and the govt. But then tax policy would not be a tool available to grease the skids for re-election so neither party will be interest.
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“Due to a lack of resources and loss of top talent, audits of the wealthy and large corporations have plummeted over the last decade.”
Gee, I wonder why this happened? One might come to suspect that efforts to paint taxes as immoral and antithetical to freedom could lead to a certain party stripping funding away from the IRS that would be necessary to catch the rich tax dodgers who pay for the politicians of such party.
#electionshaveconsequences
Edit: typo
Gee, I wonder why this happened? One might come to suspect that efforts to paint taxes as immoral and antithetical to freedom could lead to a certain party stripping funding away from the IRS that would be necessary to catch the rich tax dodgers who pay for the politicians of such party.
#electionshaveconsequences
Edit: typo
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As someone who does fairly complicated taxes using paper, I am completely stoked about this!! I do not pay for any of those companies to file my taxes because I felt that they should not be necessary. They themselves have often lobbied to stop the IRS from making filing taxes easier. It's one thing if you want to pay the company to help you because you find the tax filing process cumbersome or difficult, but I really hate it that for the last decades, paying Intuit, or whomever, has been viewed as a necessity. Especially since these companies are the actual source of the problem for why filing taxes is so complicated in the U.S.-- because they make money doing it for you.
The IRS for years has had the e-filing system, but it only works for a subset of people who use the 1040-EZ. As soon as you think about a schedule D & and form 8949, you have been out of luck. Hopefully this will change all that.
(Also, I find it profoundly gratifying that Biden, who ran against trump, is the one who's actually "draining the swamp" by removing the needless special interests acting as parasites on American society. It was what the soon-to-be-a-convict promised to do, but did the opposite.)
The IRS for years has had the e-filing system, but it only works for a subset of people who use the 1040-EZ. As soon as you think about a schedule D & and form 8949, you have been out of luck. Hopefully this will change all that.
(Also, I find it profoundly gratifying that Biden, who ran against trump, is the one who's actually "draining the swamp" by removing the needless special interests acting as parasites on American society. It was what the soon-to-be-a-convict promised to do, but did the opposite.)
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Audits in these categories are more numerical common because the number of people are numerically much greater. The probability of an audit however goes up dramatically with income, except for those who declare almost no income.
For those that make $10 million+ a year there is >8% chance of an audit compared to 0.2% for those who makes $25-50K a year. That is 40x more likely to be audited.
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Wait, they weren't already immediately digitizing them? WTF?
Because Intuit, et al lobbied extremely heavily to make it illegal.
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I get that it doesn't have to make sense, but why? No change to tax law is embodied in this administrative IRS decision. In the best case scenario, it will be easier to get the IRS' data about you, so you can find the error and beat an audit when needed.
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There's definitely some things like deductions, credits, marital status etc that fall outside of those standard forms. I do think though they should be able to auto import all the data and for people just doing a simple standard deduction they should just have to review the info is correct and click confirm. And for anyone with more complicated taxes they should only need to add those pieces and not have to start from scratch.
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Yeah, the IRS really, really, needs to get on adding e-filing systems for things other than 1040-EZ. There's like a thousand other forms between that and "full automatic filing" which they are currently barred from doing.
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That's fair. "More common target" was an incomplete statement. I should have said "successfully targeted more often". It's not that they are statistically more likely to be targeted, just that they have fewer resources to fight an audit. The IRS is not actively being evil or part of a shadowy cabal or any of that nonsense, just that the deck is a little stacked against you if you don't keep a lawyer on retainer and you DO get audited.
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According to recent Supreme Court doctrine, one is supposed to look at laws in the context of the original framers of the Constitution. So, according to this approach, you cannot write a law restricting gun use or ownership that would not be understandable to someone in the late 1700's.
Obviously, they did not have digital documents then, so clearly, the framers expected us to fill out tax forms with goose quill pens.
** PUBLIC SERVICE ANNOUNCEMENT ** This is not satire.
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Agreed it still amazes after moving to the US, how you need non-government software to do your tax return and how much paperwork is involved.
When I moved from The Netherlands, we only have tax software from the government (and 15years ago already a Linux build). The government also sends you notice on how they think you owe or are owed. It tends to be quite accurate.
So I don't understand why it must be so difficult in the US besides that so many agencies are so poorly connected. I still see so much paperwork and dated concepts we abandoned concepts like checks 25 years ago. It feels US is so living in the past in many of these ways and perhaps for a part due to *cough" corruption I mean 'lobbying'.
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And be sure to address them to the Internal Revenue ſervice. If including a payment, put the tax year of our Lord in the memo field.
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I mean, I've been completely paperless e-filing in the US about as long, but instead of using a tax supported system that anyone can use I have the privilege of giving H&R Block or some other tax software company money to efile through their systems.
It's not that we don't have these systems. It's just that in America for the last 40+ years the government hasn't been allowed to do anything if it might give a profit to a company instead. Even if it's more expensive for the company to do it instead of the government.
(Seriously we have politicians who periodically want to defund our libraries because they think libraries are cutting into the profits of bookstores. Whether having a library as a public good is worthwhile or not is never their argument - it's all about who isn't getting their beak wet because the government is providing a service.)
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So when will I be able to file my quarterly form 941 electronically without having to pay for some tax prep software for the privilege? I can pay electronically with EFTPS but I still have to fill out the PDF (at least it is fillable!) and then print, sign, stamp, mail.
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No it isn't the agencies fault. The Congress is heavily lobbied by firms that do tax preparation to not let the IRS have an easy direct filing system because it would cut into their profits. Add into that the fact that Republican ideology means making every interaction with the government as bad as it possibly can be to make sure people don't want the government to do things, and you have a storm of incentives for our tax system to be as backwards as possible.
In 2019 Congress tried to sneak through a prohibition on the IRS ever developing it's own e-filing system into law. Only the fact that ProPublica noticed it and published stories about it got it pulled from the bill - thank god for nonprofit investigative journalism. We may eventually get it - I hope so. Filing taxes should be as easy as confirming that what they withheld is correct for most people.
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No, they didn't expect us to fill out tax forms at all. Income taxes didn't exist until the Civil War (and didn't become permanent until 1913), and the government was funded largely by trade tariffs, with excise and sales taxes generally only being levied in times of war (e.g. 1812-1817).
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In Brazil, floppy disks were accepted from 1991 . By phone option for simplified returns from 1999 to 2005. Online delivery option began in 1997, with a prefilled option from 2014. Paper forms ended in 2010.
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people above posted that forms like schedule D we’re not e-file compatible without using a third-party software that you pay for
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It has been. Several times. The IRS, and other govt agencies, have tried to update their systems several times over the last 40 or more years. Most attempts end when the agency head has to report to the Congress oversight committee that the effort is years behind schedule and billions over budget. The attempt is canceled, more studies commissioned and the next attempt is started.
Despite many FAA upgrade efforts, many jetliners full of people are still tracked by ATC using hand printed paper strips. Very likely that a lot of IRS systems in use today are updated versions of System 360 COBOL software written in the 1960s. Failing at updating US Government computer systems is a multi billion dollar industry.
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Which is primarily an issue of resources. For ~30 years the IRS has had at best a static budget. The deal between the IRS and HR block/turbotax that prevented the IRS from doing tax software? Politicians pushed that so the government wouldn't have to pay to make the software. The IRS wanted it because it didn't have the budget for the software. They stopped having money for lengthy, costly litigation, and that was an early loss to GOP budget restrictions on the IRS, that all is true.
However, over the last decade, low budgets have meant low pay and few employees. They haven't been able to recruit and retain talent that can handle complex returns. Look to the hearings on Trump's presidential tax audits - the IRS abandoned trying to audit his hundreds of Schedule C businesses citing a lack of experienced auditors. Based on public data there are reasons to look at several places in his businesses and I personally, without proof, believe he is likely to be overstating real estate losses, or at least understating offsetting events like loan forgiveness.
So now, they can't even go after the low end of rich tax evaders they used to. They can go after you or me because our accounts (well, my account) is simple. But the rich have a team engaging in complicated business dealings to delay and defer taxes (and evade them outright). Without skilled auditors (who all go to the better paying private sector jobs in the big 4 cpa firms or seek lucrative employment hiding taxes from other auditors), untangling those accounts in nearly impossible.
A decade ago they couldn't afford to chase the rich. Today they can't afford auditors who know where/how to chase them.
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TBH, CRA to my knowledge doesn't have their own system to actually "do your taxes". They have a pretty good efiliing system that takes an electronic output directly from tax software and then it is ready for CRA to do their work.
I honestly don't know where that libertarian streak comes from considering that you have public schools, firefighters, police etc paid for by public taxes. I don't understand why a community wouldn't have a public library of some sort. Mind you with the way the republicans are down there, they really don't want an educated public in the first place.
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Plaintiffs not having standing and making up events hasn't stopped them recently.
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Other than getting lobbyist out of the way, what would it take to move the US to a non-filing system? As noted above, tax forms are already submitted to the IRS, so they have the information already and should be able to calculate returns without much, if any input except maybe some sort of confirmation of information? How would tax rebates work for say something like the Inflation Reduction Act? Installer/supplier submitting something to the IRS for qualifying purchases or work?
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The Reagan Era did a number on members of my generation (X) and the Boomers. The Boomers were old enough to know better so I don't know what's up with that, but my generation was mainlined pure libertarian thought through a lot of our media during our formative years in the 80s and 90s.
Maybe for the Boomers it was being fed a diet of anti-Communist propaganda in their formative years? Randian libertarianism is basically just Bizarro Communism - whatever Communists say is good, Randian Libertarianism says it's bad regardless of its merits.
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