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United States Politics

Congress is About To Ban the Government From Offering Free Online Tax Filing (propublica.org) 449

Just in time for Tax Day, the for-profit tax preparation industry is about to realize one of its long-sought goals. Congressional Democrats and Republicans are moving to permanently bar the IRS from creating a free electronic tax filing system. ProPublica reports: Last week, the House Ways and Means Committee, led by Rep. Richard Neal (D-Mass.), passed the Taxpayer First Act, a wide-ranging bill making several administrative changes to the IRS that is sponsored by Reps. John Lewis (D-Ga.) and Mike Kelly (R-Pa). In one of its provisions, the bill makes it illegal for the IRS to create its own online system of tax filing. Companies like Intuit, the maker of TurboTax, and H&R Block have lobbied for years to block the IRS from creating such a system. If the tax agency created its own program, which would be similar to programs other developed countries have, it would threaten the industry's profits.

"This could be a disaster. It could be the final nail in the coffin of the idea of the IRS ever being able to create its own program," said Mandi Matlock, a tax attorney who does work for the National Consumer Law Center. Experts have long argued that the IRS has failed to make filing taxes as easy and cheap as it could be. In addition to a free system of online tax preparation and filing, the agency could provide people with pre-filled tax forms containing the salary data the agency already has, as ProPublica first reported on in 2013.

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Congress is About To Ban the Government From Offering Free Online Tax Filing

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  • by flippy ( 62353 ) on Tuesday April 09, 2019 @03:53PM (#58411784) Homepage
    Politicians from both sides introducing a bill that's bad for citizens based on the lobbying of an industry. To quote Claude Raines from Casablanca, "I am shocked—shocked—to find that gambling is going on in here!"
    • by Major_Disorder ( 5019363 ) on Tuesday April 09, 2019 @03:56PM (#58411804)
      What do you expect form the "Best Democracy money can buy."
    • Re: (Score:2, Interesting)

      by Anonymous Coward

      While we're at it, let's ban the government from negotiating the cost of drugs that they buy, let companies certify their own products, get rid of Net Neutrality, and start a forever war or two. Nothing like the Rule of Industry to really help a country flourish.

    • Or to quote Fry, "Bender is the evil Bender?! I'm shocked! Shocked! Well, not that shocked."
    • ...and this is why I still do the taxes myself (takes about 30 minutes or so), and file the thing viz. printed paper/envelope/stamp, then pay with a paper check when needed.

      (fuck it - make the IRS earn their keep. That said, the IRS now requires an additional form to be filed when you pay by check... nice twist, you bastards.)

      PS: I sincerely pray that someone in Congress has a sense of humor, and tacks on an amendment to that bill which requires the tax software companies to buy an expensive bulk-filing lic

      • by Dunbal ( 464142 ) *
        If the government essentially gives them a monopoly, they will just pass that extra cost onto you directly.
    • Claude Raines from Casablanca

      uh... pretty sure "Claude Raines" was the invisible man from Heroes...

    • Comment removed based on user account deletion
  • by Anonymous Coward

    This isn't capitalism at work, this is its friend cronyism.

  • Just like health care, they throw the good of the population under the bus to protect existing industries that profit from the horribly broken status quo. And a large chunk of the population has been tricked into liking it that way.

    • by dargaud ( 518470 ) <<ten.duagradg> <ta> <2todhsals>> on Tuesday April 09, 2019 @04:05PM (#58411850) Homepage
      When looked at from Europe, some things in the US are absolutely insane: for profit prisons (that'll want to maximize recidivism), for profit health insurance (that'll deny any expensive claims), guns everywhere, and now you have to pay to fill your taxes ? Isn't it the _basic_ role of the IRS to make it as simple and automated as possible ?!?
      • by Koreantoast ( 527520 ) on Tuesday April 09, 2019 @04:56PM (#58412132)

        Isn't it the _basic_ role of the IRS to make it as simple and automated as possible ?!?

        A lot of the blame can be put on Grover Norquist, the leader of Americans for Tax Reform, an anti-tax, small government group. One of the things his group advocates for is to make filing taxes as hard as possible. The group fears that if filing taxes is easy, then people won't resist paying them or the growth of government. [politico.com] For those of you who may not be aware, Norquist pushes aggressively for politicians to sign a "Taxpayer Protection Pledge" that basically fights any new taxes. For Republicans, it's almost mandatory less have one of the largest right-wing groups move against you.

      • What's interesting is that for-profit prisons aren't the only group. Even if the government runs the prisons:

        https://theintercept.com/2016/... [theintercept.com]

        "POLICE AND PRISON GUARD GROUPS FIGHT MARIJUANA LEGALIZATION IN CALIFORNIA"

        I'm against for-profit prisons, but I'm also against public-sector unions since they have the same perverse incentives.

      • by Ecuador ( 740021 )

        Although the for profit prison system is completely bonkers, you should start from lobbying itself. In Europe we call it bribery and it is part of the usual corruption that does exist virtually everywhere (it's politicians we are talking about), in various amounts depending on the country and now and then gets exposed, as there is at least some agents actively fighting against it. In America instead of trying to combat such corruption, they simply institutionalized it and gave it a nice name. As long as you

      • private prisons are looked on fondly because they keep the riff-raff out of your neighborhood. Most people are on their parents insurance until they get a job, job funded insurance until they retire and Medicare (socialized medicine for old people who are otherwise uninsurable) after that. There's also a smattering of ex-military who get socialized medicine from our Veteran's Admin by virtue of having served and, well, a lot of them are big on IGMFY.... Free taxes is just one more check box. Why should _I_
    • refuse to vote for politicians who take money from Super PACs and big money donors. I'm adding the latter qualifier as Beto O'Rouke seems to have used the $2700 limit and a lot of repeated small donations to make his fundraising hall look like Bernie Sanders' when it's looking more and more like he got a few thousand rich folk in a donation network to fund his campaign on the sly.

      Either way it'll come out later this month when he's forced to declare the number of unique donors. You'll need to watch out
  • by 93 Escort Wagon ( 326346 ) on Tuesday April 09, 2019 @04:02PM (#58411834)

    For the past three or four years I've used freefilefillableforms.com, which has no income limit and is linked directly from the IRS website. Yes, you're basically filling in a web form which is laid out exactly like the paper 1040... but so what? It's free, and it's online.

    Obviously they're not referring to that program, since it already exists.

    • by taustin ( 171655 ) on Tuesday April 09, 2019 @04:17PM (#58411928) Homepage Journal

      They're talking about the IRS creating tax filing software themselves, which the IRS has never done. Any free filing systems that you have used have all be created and run by third parties.

    • by hazem ( 472289 )

      For the past three or four years I've used freefilefillableforms.com,

      This means you gave all your private financial information to a 3rd-party, who then transmitted a copy of it to the IRS.

      They still have a copy, which can use, bundle, aggregate, and sell... that's why it's "free". It's also sitting on their servers, vulnerable to exposure by hackers.

      • by VValdo ( 10446 )

        Exactly. Most countries you just send in a postcard or file taxes online with the tax agency. Only in America do we have lobbyists of unnecessary expensive software to give you "choice" to pay through the nose to support their obsolete industry. Years ago there was an attempt to provide a free service for low-income households, the threshhold was raised in the GWB years. Now Intuit is going for the kill.

        We need a free IRS "public option" at the very least, which of course everyone would use, but this law

  • Well (Score:4, Funny)

    by fabioalcor ( 1663783 ) on Tuesday April 09, 2019 @04:04PM (#58411842)

    IRS should just open-source it.

    • by larkost ( 79011 )

      The problem is that once you get past the simplest of cases (single job the whole year, non-itemized deductions, no capital gains, and moderate income) then things get complicated and lawyers get involved way to quickly. You are probably going to correctly cover most people (so 80%+?), but any project without serious funding is going to have troubles quickly, and someone is going to get a call from the IRS, take that personally, and sue the project... which does not have the serious funding to pay for the l

  • "In addition to a free system of online tax preparation and filing, the agency could provide people with pre-filled tax forms containing the salary data the agency already has, as ProPublica first reported on in 2013."

    Given the government's security track record, is there anyone here who thinks pre-filled tax forms being sent to us (or made available online) is a good idea?

    • They're crunching that data on their servers whether it is submitted natively or from TurboTax. Ohio does free filing on their webpage, it can't be that hard.
    • Given the government's security track record, is there anyone here who thinks pre-filled tax forms being sent to us (or made available online) is a good idea?

      Well, several private companies send me pre-filled tax forms (W-2s, 1099s, etc). And private industry's security track record is far worse than the government's.

  • I gotta say (Score:2, Insightful)

    by taustin ( 171655 )

    given how often the IRS gives bad advice on taxes, and the fact that they're not responsible for errors, I really don't have a problem with this. Nobody in their right mind would use any software made by the IRS anyway.

    • by taustin ( 171655 )

      California did that for a few years on state taxes. It was convenient. No idea why they stopped, but it likely wasn't because of any security concerns. (The state government here is too stupid to be able to spell "security concerns.")

    • If it was their software, I expect that they *would* be responsible for the errors caused by their software.
      • If it was their software, I expect that they *would* be responsible for the errors caused by their software.

        Okay. Name one single instance where a government screwed something up and the people in government were voluntarily responsible. It's never happened.

        I'm really torn on whether this is a good idea or not, but right now there are plenty of free filing sites so I'm not sure what the problem is.

      • by taustin ( 171655 )

        You'd think that, but you'd think they'd be responsible for the accuracy of information they give out on their advice line, too. And they're not.

        Plus, of course, if they were exactly as liable for bad software as, say, Microsoft, or Apple, they'd be . . . not liable at all.

    • by ljw1004 ( 764174 )

      given how often the IRS gives bad advice on taxes, and the fact that they're not responsible for errors, I really don't have a problem with this. Nobody in their right mind would use any software made by the IRS anyway.

      I've been using Turbotax for several years. It is riddled with errors. I answer the questions literally as they are asked by Turbotax, but the results it gives back to me make no sense. I often have to reverse-engineer what Turbotax thinks it's supposed to be asking, then read the relevant IRS documentation, then go back and fill out Turbotax now that I know the authoritative truth.

      I'm a software engineer. I think logically and precisely. The IRS documentation is written for people like me. Turbotax by cont

    • by Lando ( 9348 )

      The IRS is responsible for errors, just make sure you get your tax advice from them in written form.

      • by taustin ( 171655 )

        Even then, they rarely waive the penalties. And good luck getting it in writing in the first place.

  • But not for widely-used software. If the government is paying for the cost to develop, manufacture, and provide a material product to the public, then it's not free. It's being paid for by taxes. And because it's being given away by the government without charge, there's no way to tell if the government's product or a commercial product is cheaper or more cost-effective. The government product will always be able to undercut the commercial product based on price, even if it's less cost-effective for the
    • by Dragonslicer ( 991472 ) on Tuesday April 09, 2019 @04:55PM (#58412118)

      Software is different though - it has essentially zero cost of duplication and distribution. That's the entire premise behind the open source movement - leveraging that zero cost of duplication and distribution to maximize benefit to society. Essentially you can view what the IRS is doing as hiring a few people to write tax software for them (so, maybe $200k in development costs), then duplicating and distributing it to everyone for free. Even if the IRS charged double their development costs for it, I doubt Intuit and H&R Block could compete with that price (e.g. if they sell 10 million copies, then each copy should be priced at less than 4 cents).

      One other important point - the IRS already needs this software anyway, since they have to know if people are paying the correct amount. And really, as the summary points out, the IRS already receives most of the data that people enter in their tax forms, so forcing people to transcribe all of the data is a waste of time and obvious source of errors.

      • They actually don't know if you are paying the correct amount unless you are flagged for an audit; it's up to the taxpayer to ensure that they're calculating their tax correctly. And you're legally liable for penalties if you screw up in a way that doesn't work out in their favor. Sure, they have algorithms that compare some of the data they receive from your employer(s), investment accounts, and other sources like your health insurance provider, and wild discrepancies can be a red flag that gets you marked
  • This is completely backwards.

    The IRS should develop more free online filing systems that meet the needs of 99% of the typical consumers who are not in business for themselves. The IRS should only certify tax software that produces, at no additional cost, the standard output needed to input to the IRS's free online filing system. In the long run, it would likely save the IRS money as they would receive less handwritten dead tree forms and those with math errors in them.

    Tax filing companies can make their mon

  • by Livius ( 318358 ) on Tuesday April 09, 2019 @04:32PM (#58411992)

    I am unsurprised by the notion of taking away a free service that is really not encroaching on the private sector to many meaningful degree, but what's with the Orwellian langauge? No-one is fooled about who this is putting first.

  • by Anonymous Coward

    it is not to late to stop this monstrosity
    if just 10% of the people on slashdot actually bothered to contact their congressional delegation (1 rep + 2 sen) this wouldn't

    you don't call you loose your right to complain

    call email telex wire now

    this is something you can do

  • Illinois [illinois.gov] has had online filing for free for quite some time. Despite the website being "outdated" (I call it a clean design), it works quite well. It's saved me quite a bit of money over the years.
  • by anarcobra ( 1551067 ) on Tuesday April 09, 2019 @05:00PM (#58412152)
    The agency in charge of collecting your taxes is not allowed to provide a portal where you can submit them your tax information, and instead you have to pay a company to fulfill your legal obligation to file taxes?
    What a dystopian shit hole.
    • by uncqual ( 836337 )

      You don't "have to pay a company to fulfill your legal obligation" -- you can file on paper and pay the USPS (a quasi-government) agency to deliver your return to the IRS.

  • by Nocturrne ( 912399 ) on Tuesday April 09, 2019 @05:00PM (#58412154)

    The entire US tax system has been purposely made more and more complicated by industry lobbyists, in order to create work for their entire industry. Any congressman that votes for this is a criminal.

  • Tin-foil hat mode here... What if this awesome "free IRS app" were to store and report on things like changes in values, corrections, etc.. In theory, they could use that as one of the factors in evaluating whether to audit somebody or not (ex. "if income value changes more than X times, add Y to we-should-audit-this-guy score). Given how well I type, that would be a bummer...

    • by PPH ( 736903 )

      They could do that. But then I could always run my 'What if' test cases with some other SSN. And then cut and paste the final numbers into my own form. I like to use the number I found in my wallet [ssa.gov].

  • then the government should not be there to prop it up. Period. This does nothing to benefit all those except a small few; it harms the country as a whole.

    It just really shows you...our representatives don't work for us. They work for corporations. They work for the rich. They work for whoever can put money in their pocket instead of the people that they're supposed to represent.

    This is why political parties need to go...they're just two sides of a "fuck the people" coin. Until people in this country can l
  • Australia has an online thing called etax, it lets you pre-fill almost all your data, all your employers are prefilled, health fund stuff is prefilled and even interest from your bank accounts (assuming you provided your bank with your tax file number). For people with simple tax needs (a normal job or two, maybe a few deductions for stuff you bought for work etc), it takes maybe 15minutes to do your tax. For people with more complicated tax needs it does take a bit longer, but it's still pretty quick.
  • I think we need a "Name acts the opposite of what they are" act so that we can finally get acts that are named what they are.

  • In one of its provisions, the bill makes it illegal for the IRS to create its own online system of tax filing.

    Where in the text of HR 1957 is government prohibited from offering online tax filing?

  • Short titles of all legislation should be required to be determined by an independent nonpartisan committee.

  • Nearly all members of Congress were never interested in serving the Common Good, only in serving their own pocketbooks and those of their friends in their own little tribal circles. There's scarcely an egalitarian in the entire bunch. It's nice to see them be blatantly honest about their true motives once in a while, as opposed to the usual doublespeak and obfuscation.

  • Everyone should fill in returns hand-written. It would crush the system. It would mean delays, but it would make them look terrible. And that is necessary.

    On another front, airport security theater, if 5% of people requested manual searches at airports that system would implode. Myself, I don't request such a search but I travel with baby powder. It's not a liquid but they have to test it manually with me at a table (take a sample, add some solution, wait - they also go through the bag, I pack underwear

  • by edi_guy ( 2225738 ) on Tuesday April 09, 2019 @06:31PM (#58412636)

    Maybe its better when both sides are at each other's throats. When both sides agree we usually end up invading somewhere or get crap like this.

    Not sure if my recollection is 100% on this, but I recall a similar issue with the National Weather Service (NWS). They put up the satellites, staff professional meteorologists, run super computers, etc. But lobbyists were trying to get the NWS's weather forecast website shutdown because it challenged weather.com, and other weather sites for views. And being completely un-American, the NWS site didn't even have ads (!)

  • Supposedly, they only sell "anonymized" data.
    But there's fast growing shadow industry of data "de-anonymizers".

    Tax data is easily one of the most valuable data sets out there.

    Ever wonder why there's an explosion of "free online tax" services ?
    Must be data harvesting. . .

    I'm politically active, so I always TRY to do my taxes in "tin-foil hat mode".
    It's getting to be more and more insanely difficult.

    I get the TurboTax disk, put it on a clean VM or hard drive, run the updates, and do all of the rest offline.
    At

  • by sunking2 ( 521698 ) on Tuesday April 09, 2019 @07:34PM (#58412870)

    Nothing is free. Using tax revenue to undercut an entire industry that creates jobs doesn't really sit well. There is no free, everyone is paying for it. And everyone has a choice to do them for free the old fashioned way, find a 'free' service, or pay for it.

    The job of the IRS is to collect taxes, not prepare them. Now if you could show it actually saves the government money I'd likely be all for it as a cost savings.

    • by neurocutie ( 677249 ) on Tuesday April 09, 2019 @08:52PM (#58413098)

      "The job of the IRS is to collect taxes, not prepare them."

      except that how is the IRS supposed to know if you filed and paid the correct amount?

      that's right, the IRS has to also compute its version of what you owe to see that it matches, i.e. it has to "PREPARE" your taxes ANYWAYS. And they have to already have almost all info needed. Its all duplicate effort -- a waste of your time.

  • by PopeRatzo ( 965947 ) on Tuesday April 09, 2019 @08:48PM (#58413088) Journal

    I'm like Donald Trump: I don't want the government seeing my tax returns.

Where are the calculations that go with a calculated risk?

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