
H&R Block and Intuit Are Lobbying Against Making Tax Filling Free and Easy - kennyma
https://www.propublica.org/article/filing-taxes-could-be-free-simple-hr-block-intuit-lobbying-against-it
======
Maarten88
In the Netherlands we have had this for years. You login with the tax agency
and download a pre-filled tax form. Wages and Income Tax is pre-filled, as are
Bank savings and morgages. The pre-filled form is complete for over 90% of
people.

The 10% for who it is not can add or correct things that our IRS may not know
correctly (i.e. foreign holdings or bitcoins).

You then digitally sign and submit it. It's quite easy to do yourself and I
think most people here do (couldn't find a percentage). I could find that 97%
is submitted digitally, only 3% is on paper.

We do have commercial offerings, those are used for the more complex
scenario's, mostly by accountants and tax professionals

~~~
Dunan
Japan is like this, only most regular employees never have to do a thing. Our
employers take care of everything and our December pay packets are adjusted so
that the correct amount of tax for the year has been paid. Banks also take tax
out before paying interest to account holders.

You can also go to a tax office sponsored by your city hall and have a
preparer assist you at no extra charge.

------
naftaliharris
I'm surprised the article and comments haven't mentioned CreditKarma's tax
solution yet, which is (actually) free. [1] Presumably their strategy is to
take the users and data they get from offering free tax filing and use them to
advertise lending products. I think that's a sustainable and politically
feasible way to get free tax filing, actually; I expect that in ~5 years
Credit Karma will have eaten a big part of TurboTax and H&R Block's lunch.

[1] [https://www.creditkarma.com/tax](https://www.creditkarma.com/tax)

~~~
berberous
I have not used CreditKarma's tax product, but I've heard folks say that it
calculates some things incorrectly. I think that's understandable for a brand
new product, but I'd be cautious about using it this year if you don't (1)
have a very simple return, (2) check their work against the IRS
forms/instructions and/or (3) check against another product.

(For those who don't want to give TurboTax or H&R money, I've been quite
pleased with FreeTaxUSA, which is like $12 for federal and state. It's a bit
less user friendly, but plenty good enough if you have some understanding of
taxes, and there are way fewer upsells and overpriced crap.)

~~~
danielweber
TurboTax found several thousand dollars for me in a fairly complicated tax
situation that I was completely not expecting and would never have realized on
my own. Even some CPAs I've talked to have said "oh, really?" They've bought
some tremendous goodwill from me with that. I'm probably sticking with them
forever.

~~~
d3ad1ysp0rk
This is the exact anecdote for why Intuit would want to keep tax law
complicated.

~~~
danielweber
How do you think carryover losses of subchapter S corporations should be
handled to make them easier?

~~~
SeanDav
The idea is to make it easier for the average person. Those involved with
subchapter S corporations are probably not amateurs and are not the target
audience.

~~~
ams6110
Taxes are easy for the average person. A basic 1040-A, and certainly 1040-EZ
(these two cover most taxpayers), are not difficult to do on paper if you can
read and have a little patience.

I'm not defending Intuit here, by the way. But most people don't need what
they are selling.

~~~
snarfy
You cannot itemize a 1040.

~~~
ams6110
True, you need the full 1040 return for that, but most people don't have
enough deductions to itemize -- that was my point. The average tax return is a
1040A or 1040EZ with the standard deduction. Those are easy.

~~~
mason55
> _but most people don 't have enough deductions to itemize_

FWIW, $100k in NYC puts your state + city taxes well over the standard
deduction.

------
jawns
Because of the complexity of tax regulations, I don't think coming up with a
competing free/open-source/nonprofit tax preparation service is the right
answer to this problem.

Let's consider the positions of all sides:

* The professional tax preparers are worried that they're going to lose business if the government assumes the bulk of the tax preparation work.

* We as taxpayers would prefer that the government pre-fills a return for us, since they already have the information, and lets us file the pre-filled form if we detect no errors. That saves us time and also lets us see what info the government has about our income.

* But we also recognize that it's in the government's interest to maximize the tax we pay, and (ideally) it's in the tax preparers' interest to minimize the tax we pay.

Given all that, if pre-filled returns are unlikely, for political reasons,
then perhaps a step up from the current Free File program might work like
this:

1) You go to a Free File partner.

2) You authorize the IRS to release all of your tax information to that
partner, who pre-fills the forms.

3) The partner walks you through the pre-filled forms, so you can check for
accuracy.

4) The partner then does its own checks to discover errors that you might not
have picked up on.

5) The partner makes money by selling optional add-ons, such as audit
protection services.

This would, at the very least, speed up the Free File process and let you see
what info the IRS has. It also ensures (like it or not) that the partners keep
getting business (or at least eyeballs to pitch extra services to), and it
ensures that your interest in paying the least amount of tax possible is
reasonably protected.

~~~
smnrchrds
We (almost) have this in Canada. CRA (our version of IRS) has an Auto-fill [0]
option allowing the tax preparation software to import most commonly-used data
after authorization. There are some good free tax preparation software, my
favourites being SimpleTax (online, web-based) and StudioTax (offline, with
option to file digitally or print the completed forms for paper filing). It
typically takes me less than 15 minutes to file my taxes.

[0] [https://help.simpletax.ca/questions/how-to-use-
afr](https://help.simpletax.ca/questions/how-to-use-afr)

~~~
redthrow
SimpleTax.ca is great. I think they were initially run by just 4 people
(Accountant, Designer, Programmer, and Sales).

~~~
suter
Three of us, actually: product manager/designer, non-practicing tax lawyer,
and developer. :)

------
bkohlmann
While I am against Intuits efforts, what astounds me most is how LITTLE money
is spent lobbying. A few million over a year is peanuts compared to the
broader market opportunity. And the implication that Congresspeople are bought
off by sums as low as "$32,000" since 2008 seems unlikely. Intuit and H&R may
simply contribute to those they know already support their agenda.

~~~
mikeash
Members of Congress are amazingly cheap. And this particular issue is one they
won't get a lot of trouble over, which makes it even cheaper.

------
John23832
It's never wrong for businesses to lobby for their interests. It's wrong when
our elected officials bend to those business interest when it goes against the
public interest.

~~~
mikeash
I completely disagree. It's absolutely wrong for a business to lobby for their
interests when it harms others. This is little different from dumping toxic
waste into the local reservoir. That would be wrong even if it were legal.

Obviously, a lot of business don't really care about right and wrong, and so
they'll still _do_ it. But we can condemn it.

~~~
John23832
I never said we can't condemn the behavior of businesses.

The prime objective for a business is to make money. All the ethics,
right/wrongs, etc are things that we expect from the people who run those
businesses. But the business is there to make money.

It is up to the people in charge of making choices for society to make the
right choices. It's not the responsibility of the business. They have every
right to lobby for anything they want.

~~~
M_Grey
Why is it incumbent on politicians to be moral, "do the right things", but not
businesses?

That's a laughably arbitrary choice you're making.

~~~
John23832
Because "morality" is a uniquely human trait, and we elect politicians to
enact laws (which are group morality, codified).

We pay businesses for goods and services.

~~~
M_Grey
So you're just going to pick and choose as it suits you, and then act baffled
when people point out the hypocrisy in that course?

Oh.

~~~
John23832
You asked my logic, I gave it to you, you respond and say that I "pick and
choose", with sarcasm.

Please stop being a childish.

------
imgabe
Filing is always free. _Online_ filing costs money, but you can always mail in
a paper form. If everyone did that, the IRS would pretty quickly want to make
sure people can file online easily and cheaply.

Stop using HR Block and Turbo Tax. For most people, taxes are not very
complicated. The IRS publishes detailed instructions that literally explain
what every box means and what should go in it for every form. Just read it,
fill it out, mail it in.

~~~
Azkar
You underestimate how lazy and unmotivated most people are.

~~~
briandear
You overestimate how easy IRS instructions are. A 1040EZ is easy, but anything
beyond that and it becomes very complicated in a hurry.

------
atonse
Could we not start a non-profit that builds software as good as H&R block and
allows people to file their own taxes?

~~~
mabbo
A lot of what H&R Block sells is experience in filing taxes, not just
knowledge of how to do it.

I have complex multi-country taxes to file (Canadian living in Canada, but
with some income the IRS says is American income). H&R Block have a guy who
has handled this exact kind of tax filing hundreds of times before. If I make
any mis-steps in filing, the IRS is going to demand I give them thousands of
dollars.

I'm not paying H&R Block $600 (CAD) to fill out a piece of paper, I'm paying
for the time and experience of someone who won't screw it up and knows how to
fight back if the IRS has a problem with it.

The root cause is that our tax system is overly complex and it doesn't need to
be. We need to address _that_ rather than build software to help make the
complexity continue.

~~~
__david__
> Canadian living in Canada, but with some income the IRS says is American
> income…

So in that case, I'm curious what the penalty is for not paying. Presumably
the IRS doesn't have the power to garnish wages from Canadian banks…

~~~
mabbo
I'm not really enthusiastic about finding out.

It was RSUs granted in 2012, while I lived in the US, that vested over 4 years
(the last of which was 2016). That counts as 'American income'. After this
year, I don't have to do this ever again and plan to start doing my own taxes.

------
BrandonM
For anyone who can program (including spreadsheets!), it's not all that hard
to file your own taxes the old-fashioned way. To do it digitally, just use
[https://www.freefilefillableforms.com/](https://www.freefilefillableforms.com/)
and start with a 1040. Read each line carefully and go from there.

The IRS has tons of great resources, and you can even call them up. Each form
has a companion instruction booklet (online PDF), and sometimes those
instructions refer to an IRS publication with additional clarification. If you
can read a technical blog post and follow a clear procedure, you can file your
own taxes.

I've been filing taxes the (new) old-fashioned way for my wife and I for the
last 3 years. That includes 330+ days abroad (Federal Earned Income
Exclusion), a sole proprietorship, an LLC, an ISO exercise (AMT), 3 separate
states, and 5 separate cities.

Each time, it has taken me a full 12-16 hours (a solid day or two on a
weekend) for federal, multiple states, and multiple cities. It's not the most
fun, but by the end of it, I understand our taxes and finances a lot better.
We can arrange our situation better going forward. We can keep more
appropriate records to make the next year's filings easier. And most of all, I
have the satisfaction of not funding an industry that lobbies against my
interests.

~~~
jandrese
> it's not all that hard to file your own taxes the old-fashioned way

> Each time, it has taken me a full 12-16 hours

You have a strange definition of "not that hard".

This is exactly my experience trying to do it the old fashioned way. The IRS's
documentation is written in accountant speak so deciphering what each means is
an effort and all of the time it takes adds up. Who else uses the word
"schedule" to mean "form"? And then there are so many places where it talks
about "qualifying" this or that without telling you how you know if something
qualifies.

And that's before you get to the nightmare if you own stocks. My wife
inherited some telecom stocks from her grandmother. Her grandmother got them
as part of her paycheck when she worked at AT&T. Unfortunately she didn't keep
any of the original documentation for them (my wife had to track down the
stock management companies and get them to reprint the certificates). These
stocks were then of course split across all of the baby bells and merged and
split a ton of different ways over the years. Then one of the companies merges
and we get a payout for a fractional amount of a share and have to calculate
the strike price of the stock for the sale.

As an average person this seems like an impossible task. We just enter 0 and
pay a ton of extra tax because how in the hell are we supposed to do that
calculation? As far as I can tell we can never sell these stocks.

~~~
BrandonM
> You have a strange definition of "not that hard".

That's fair, but by-far the hardest thing about filing taxes for us has been
prorating our income based on how long we lived in each part-year
municipality. Adding to that, some cities/states give you a credit on the
taxes, some deduct from the income, and yet others multiply by the number of
business days you were a resident. If it was just a matter of filing a 1040,
itemizing deductions, and transferring that same info to state/city taxes, it
would probably take me 3-4 hours.

I agree that your situation sounds difficult, but I doubt that TurboTax is
really making that easier. You likely need to seek out a true tax
preparer/accountant. My comment was specifically targeted at those who are
using DIY online software... It's just honestly not that much harder to use
forms. (I could have been clearer about who my comment applied to.)

------
joeax
Both excel at finding ways to gouge customers too. Doing standardized
deductions, but happen to sell one stock? Nope. Gotta upgrade to Premier for
$30 more.

~~~
sly010
Or just happen to receive dividends...

------
SpicyPython
I mean, I feel like we should've seen this coming. They chunked off a
significant portion of the market, and now they can try to make tax filing
more expensive such that they can make more money. It's disappointing, because
I love online tax filing, and I just hope their lobbying efforts don't pay
off.

~~~
mtgx
> I mean, I feel like we should've seen this coming

I would say so, considering it's not their first time doing this:

[https://techcrunch.com/2013/03/27/turbotax-maker-funnels-
mil...](https://techcrunch.com/2013/03/27/turbotax-maker-funnels-millions-to-
lobby-against-easier-tax-returns/)

------
thewhitetulip
Every time I read that Intuit is lobbying against making Tax filing free and
easy, I feel immensely grateful that Indian tax filing is simple and free.
Yes, we might lack in 24x7 electricity or the first world infrastructure, but
our tax filing mechanism is simple! I hope that the US makes this change to
their tax process.

~~~
jandrese
People in India pay their taxes? That's news to me.

~~~
thewhitetulip
If you believe them, 1-3% people pay taxes and I'm one of them!

------
S3curityPlu5
Good luck there is already hundreds of companies that offer free e filing,
This is a losing proposition for them, competition has kept this free and
there is no reason to use either H&R Block or Intuit. There is also no reason
to pay a tax preparer or accountant to do your taxes, since you can easily do
it yourself. I can understand for companies, and very wealthy people with tons
of stocks, bonds, and IRAs etc. Then pay someone, but for the normal person
who just works one job and doesn't do much trading or investing, then go onto
the irs web site and choose one of the hundreds of free efile companies each
year, they often have a limit of 62,000 anyway in gross income, so it's harder
to find a free file if you make more money. They are going to try but this is
a state by state issue.

~~~
S3curityPlu5
I used taxslayer the last time I free filed, but I thought that I remember
being more than only 13 companies. I don't want the government to fill
anything in for me, however, because there's no way that they know everything
about my deductions and credits and all the loopholes that many people want to
use, if you just work a 9 to 5 job for one company then that sounds ok. I say
keep it how it is now, and they've been lobbying for years, they probably
think that they have a chance now because the Republican party is all about
helping the private sector and having a small government.

------
serg_chernata
Is there anything we can do to fight back?

~~~
arebop
I would gladly match my tax prep fee with a donation to the counter-lobby, if
one existed. Where can I buy tax-complexity-offsets?

~~~
tvanantwerp
I work for the Tax Foundation, a nonpartisan tax policy think tank. As a
501(c)3 we're not allowed to lobby, but we do work hard to show legislators
the benefits of taxes that are simple, transparent, neutral, and stable.

[https://taxfoundation.org/principles/](https://taxfoundation.org/principles/)

~~~
pzone
Thank you for the work you do. I disagree with the principle of neutrality
because I support Pigouvian taxation. But we could use a lot more of the other
three.

------
mtokunaga
I am not sure if it is true still, but I remember "regular" workers in Japan
do not have to file tax. They are deducted from their pays and that's it. I
think that will similarly apply to a very large number of population.

I also never liked really to use accountants, as they basically ask the same
questions that I have to collect myself. Might as well use an online tool.
Especially if most of the "W"s are already at IRS/FRB why do I even have to
send the copies of them again. Why don't they just give me the partially filed
XML/JSON to me to finish it off.

~~~
Termiux
This is how it's done in Mexico, most people have no idea how to declare taxes
any other way. You can still deduct some things in an itemization like manner
if you want or are self employed but otherwise its automatically deducted from
your payroll.

------
AtticusTheGreat
I file my taxes for free, easily, by printing out the forms at home and doing
them by hand on paper. The only cost to me is for the envelopes and postage.
I've done some pretty complex filings over the years, and have built up the
knowledge I need to do it well. Also, if I make a mistake the government is
usually pretty good about letting me know and I either cut them a check for
the difference or they cut me a check. It's actually not that hard, as long as
you go through it line by line and read the instructions.

~~~
eli
As someone who does their own taxes, aren't you in favor of the IRS pre-
filling your forms with the information they already know?

~~~
AtticusTheGreat
Yeah absolutely. I'd love a free online solution from the government as it
would make my life easier. So far, I haven't been willing to pay out to Intuit
or HRBlock for a slight time/convenience savings.

------
Symmetry
Even without the lobbying the public choice aspects of this are bad. I'd like
easier tax filing but I wouldn't vote for a politician who I disagreed with
about immigration if they supported it. On the other hand I'd bet that most of
employees of H&R Block, Intuit, etc would consider tax reform a huge threat to
their livelihoods and would rank this as their top priority in choosing who to
vote for.

------
anigbrowl
They've been doing this for years. When I grumble about capitalism this is the
sort of thing that annoys me. People say government is bad because it doesn't
have competition and is a van intrinsically violent monopoly, but here we see
an example of private actors spending money to make government unresponsive or
outright antagonistic to people's needs so as to profit by serving those
needs. The argument goes on that it's government's fault for allowing itself
to be influenced, but that rests on an increasingly common fallacy of
composition as if government were a monolithic entity, which (especially in
the United States) is so far from being the truth as to be a lie. The fact is
that many actors in government have been corrupted by campaign donations, and
that the mechanistic application of an unlimited first-amendment concept of
political speech Does Not Work.

A basic problem particular to the United States, in my view, if that while the
Constitution treats of both law and equity, law has gained primacy and some
parties are heavily invested in keeping it that way, arguing that the courts
should be no more than mechanistic deciders rather than moral agents in their
own right, most often summarized as 'we're a nation of laws!' \- a curious
statement from people who pledge allegiance to the idea of a Republic with
_liberty and justice_ for all, as if there could never be any such thing as
unjust laws.

It would be interesting to see which members of Congress are most heavily
influenced by lobbyists, and examine their public statements to see whether
this correlates with hostility towards the judicial branch that checks their
'work.'

~~~
refurb
* When I grumble about capitalism this is the sort of thing that annoys me.*

Is this a problem with capitalism or government? If a company tries to get the
gov't to block competition, the correct response is "piss off".

~~~
anigbrowl
If it wasn't clear, I think the problem is capitalism because the would-be
monopolist can simply rent a politician to antagonize whoever is in charge
until either the policy or the policymakers are changed. Money is not all that
talks in elections, but it's a huge factor.

------
hmhrex
I've been using TurboTax for years, and I think I'm ready to move on if they
are going to continue lobbying. What are some other alternatives? I don't mind
paying, but I want to make sure it's a service people trust.

------
pasbesoin
For three years, one of the departments I worked in had to suffer through
massive, monthly paper report distributions. Because the petty-tyrant manager
would not let us convert to electronic reporting. Because it would shrink his
personal turf.

From business and legal aspects through to recent news on scientific
"protectionism", no matter the "professionalism" and "objectivity" attached to
the domain, they remain run by _humans._ With all their human traits and
foibles -- which tend to come _before_ the "objective."

One reason -- a primary one -- I see for guaranteeing people a basic quality
of life, e.g. health care and an at least tolerable retirement. So that they
-- maybe -- don't fear change so much. Feel, even, that they get to take part
in the change, even when it is not at their own initiative and patent.

------
smsm42
This was already discussed here in
[https://news.ycombinator.com/item?id=13853150](https://news.ycombinator.com/item?id=13853150)
little more than a week ago.

------
stefek99
Doesn't surprise me.

That's what happens when companies are legally obliged to provide profit for
shareholders.

That's why I highly respect Kickstarter (among many others) who decided to
reincorporate at _Public Benefit Company_.

------
koolba
> But the legislation would also permanently bar the IRS from offering its own
> free alternative.

Why should we as citizens of this great country be forced to give up the right
to form a public option? Not quite 1:1 but the analogies to health care do
come to mind.

~~~
equalunique
What's going to happen to all of the nice employees maintaining HR Block and
Intuit's tax filling products?

Should they go become used car salespeople and McDonald's fry cooks?

~~~
frgtpsswrdlame
The same thing that happened to the workers who were displaced by the cotton
gin, the assembly line and the plow.

------
maerF0x0
Automating inefficient/complex systems is just going to make the same problems
happen faster.

Seems to me the first step should be to simplify the tax code. AMT and
deductions seem like a good first pass.

------
I_am_neo
There is already more than enough bureaucracy involved in paying taxes,
creating an ecosystem to make more of that bureaucracy... for a profit.... is
not my idea of a good idea.

------
sly010
I feel like this comes up every March :)

------
keeganjw
Such bullshit. Can't believe they've gotten away with this for so long.

------
senior_james
The government would actually love this. Most people are ignorant of tax laws
and would just sign a piece of paper to get all of their taxes done. It would
be an instant pay raise because most people would never even know if they
could write something off. It would also allow them to easily remove the
ability to write anything off, without too many people complaining.

What many people don't like to talk about is that yes, places like Sweden have
much simpler tax code. But they also removed most ways to actually reduce your
tax burden and grow your business (this applies to personal taxes too). You
are also required to have a special black box on any credit card transactions,
which sends everything straight to the government. This smacks of
authoritarianism.

Simplicity might seem better, but it gives us less control over our own taxes.

It's also not really that difficult now. Everyone I know has been doing their
own 1040-EZ form since they started to work. It's usually only one or two
forms to fill out. If this is too complicated for our society, we truly have
problems.

~~~
blackguardx
Have you ever actually done your taxes by hand? The 1040EZ is supposed to take
7 hours. Back when I did paper taxes and couldn't do the 1040EZ, the 1040 long
form took me about 20 hours to do, slightly beating the IRS estimate of 22
hours.

The government has all the information about me. Why do I have to gather it
all up and tell them again?

A friend in Finland tells me it takes him 10 minutes to approve the tax
documents prepared for him on a Finnish government website. Why can't we do
the same here?

~~~
sp332
The 1040EZ is a single page and has only 2 pages of instructions. How does it
take 7 hours? [http://datechguyblog.com/2011/04/15/7-hours-for-
form-1040ez-...](http://datechguyblog.com/2011/04/15/7-hours-for-form-1040ez-
thats-just-not-true/) (Link from 2011 but I don't remember it being much
different lately.)

Edit: the IRS now says it takes 3 hours to fill out and submit the form, and 2
hours to collect the relevant paperwork, for 5 total.
[https://www.irs.gov/instructions/i1040gi/ar03.html](https://www.irs.gov/instructions/i1040gi/ar03.html)

~~~
sly010
"1040EZ" is an eaaasssy version of 1040. He is specifially talking about
filling "1040".

~~~
sp332
The part I'm responding to: "The 1040EZ is supposed to take 7 hours."

------
DoodleBuggy
Is lobbying just a cute alternative word for "corruption"?

------
roesl027
In this alternative solution, the government does your taxes, so instead of
paying a company/accountant to do it, our taxes / the deficit will pay for it.
Someone has to do the work, and if it's not these companies, it will be the
IRS. I'd be in favor of simplifying the tax code so everyone could file their
own return with confidence!

~~~
mikeash
The work is already being done. Try putting some incorrect numbers into your
tax return this year. Sometime after you file, you'll probably get a letter
informing you of the mistake, telling you how much your actual tax liability
differs from what you filed, and either a check or a bill for the difference.

~~~
gpawl
IRS checks your math and makes sure all the reports (your copy vs
employer/bank/vendor copy) match. They won't tell you which deductions you are
supposed to take.

~~~
sedachv
> They won't tell you which deductions you are supposed to take.

They will for the most basic personal deductions. I have gotten a correction
on a 1040EZ where my deduction was corrected upwards and the refund increased.
It is impossible for the IRS or your tax preparer to know things like what
kind of automobile deductions you can take for your sole-proprietorship
business. This is an impossible problem to solve - every change to the
deductions allowed is going to make some people pay taxes on what should be
business expenses/losses and/or allow other people to claim legal-but-bogus or
just plain fraudulent deductions.

