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TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free (propublica.org)
1519 points by danso 35 days ago | hide | past | web | favorite | 447 comments

I am the developer in charge of CalFile, the free filing software that everyone asks for here for state of California.


I am pushing so hard to make it better and more useful to more people, like being able to add capital gain that is not currently supported.

these are the push backs that I am getting:

1. Last time they tried to do what all of you ask, a ready return. TurboTax and others hired bunch of lobbyist and put so much pressure on people here and killed the project. People are still afraid and don't want to do too much to grab the attention of their lobbyist!

2. Use of CalFile goes down every year and if trend continues, it would be killed in the near future.

when you have your Federal return it is much easier to pay a little more and file your state tax with it too. No body even knows CalFile exist because we don't have a marketing budget to promote it.

3. Even people here buy the argument that free software exist and people could file their taxes for free.

Dude I salute you. There are so many edge cases to support.

For number 2 can you import fed return with calfile?

IRS free returns going down too so you are not alone: https://taxpayeradvocate.irs.gov/Free_File_Program_Is_Failin...

This is a large reason why Prorepublica keeps digging at this - it’s fucking crazy actual free filing is going down while these paid shenanigan products are holding strong with their ginormous marketing budgets.

Is it really as simple as that? Budget trumps all?

With all due respect to the OP, most state run software operations are complete, utter, garbage. I'd happily pay money to avoid some of the clunky, poor UI/UX, and downright broken web tools that the state of California produces.

TurboTax on the other hand, is a relatively nice experience.

I personally think the Calfile UI is better than TurboTax for what it does. CalFile's UI isn't shiny and Web 3.0, but it is nice and linear and easy to understand. IMO TurboTax can get a bit weird if you skip around sections or need to manually look at the generated forms. CalFile doesn't have all the features that TurboTax does, like being able to say "I donated a microwave to charity, figure out my deduction". However I've found that the two actually work pretty well in conjunction with each other— do Federal taxes in Turbotax to figure out my deductions and get my W2 #s collected, then copy all that info into CalFile.

"but it is nice and linear and easy to understand"

I never wanted "linear". My ideal tax software just has the forms to fill out on screen, but applies all the constraints and rules so that the return is either consistent or you have a comprehensive list of discrepancies. And cascades any fields that can be derived from others. Really, just like a compiler for taxes.

Edit: TurboTax used to work like this...

I am tired of for-profit companies hamstringing government using bribes to representatives and funding lobbyists from delivering inexpensive or free services to citizens. If someone wants to pay TurboTax, that is fine. If someone wants to continue to support their efforts to stymie government from delivering said services for free, they should be tarred and feathered.

Intuit's tax products are regulatory capture, plain and simple, and deserve no defending.

Why are you solely blaming the companies? Are the government officials doing their jobs? If the government officials are being corrupt by accepting lobbying money and helping the corporations; they are as much (if not more) to blame for the situation as "for-profit companies". At least, for-profit companies exist to make a profit. The government, on the other hand, exists to defend the citizens.

I did not include representatives accepting donations and lobbying money as villains in my comment. My apologies, thank you for pointing this out.

> The government, on the other hand, exists to defend the citizens.

Never a truer word spoken.

Hm that's been a big issue for maybe 200 years. Should the government start its own companies? What happened to the free market? How does a 'free' government company respond to competition (since they have no pressure to be profitable)?

It's not a right to be free from competition from the government. The reason we allow corporations is so they can serve the public good, but if the public good would be better served by the government providing that service then there's no reason society shouldn't do that.

It seems to be working fine in every other country mentioned in this thread where government is free to provide free tax filing services. We do not need bullshit jobs at rent seeking companies that are glorified PDF generators. This is a government feature, not a product.

So maybe this one should be allowed.

Other government competition with private enterprise is not so clear. Paving roads? Providing medicine? Delivering packages? Its been a rocky road.

I'm going to say probably not. I've been pretty disappointed by the attempts of private industry to deliver what should be government infra (tax prep, healthcare, prisons, etc), while I'm super happy with my roads, police, fire, water, sewer, muni fiber, and the USPS (all government provided or backed).

I have 'volunteer' fire service out here in the country. And installed my own sewer. Police are essentially non-existent out here - I see a patrol car maybe once a year go by.

And the USPS has been going broke for decades now. Not a good example of a well-run service.

The only reason USPS has financial trouble is Congress mandated huge advance on payments for benefits many years into the future.

It runs excellently otherwise.

Congress did that. It's political. It can be undone.

Free market people want the USPS gone. Trouble is the Post Office is in the Constitution, must exist barring some Amendment, and must be run by the Federal Government.

None of those are bad things. The Post Office has been exemplary.

The trouble began during the Bush administration. Two things were done:

1. Rate changes that turn big bulk mailings for companies into a subsidy. Deep discounted rates. That was coupled with significant increases for ordinary people and smaller publishers. None of that made much sense.

2. Forced advanced payments on benefits. At the time it was done, there were people not even born yet, who would end up working for the Post, whose benefits were being paid now, basically.

It's crazy.

USPS is a really well run service. They need to provide universal service, even to country folk at a loss, handle foreign parcels, etc. Most of their woes are created by a republican congress setting out a path for privatization. (Weather is next)

In terms of the self-reliant rural communities, you’re not factoring the very significant cost that the entire population pays to support your rural lifestyle. As agriculture continues to decline and consolidate, those externalities costs will continue to grow.

USPS requires Congressional approval to set rates (as well as pension funding requirements). Your complaint is with your representatives, not USPS itself.

It reminds me of the demonization of the IRS, they just carry out Congress' laws and funding. It's disingenuous when Congresspeople complain as they reduce their funding.

Plays well to the uneducated unfortunately.

Plays well to everyone because most people hate representatives but like their representative.

My complaint is with 'government-run businesses', which will always have such issues. It stems from not being responsible for efficiency or profitability.

I mean, honestly, yeah? I'd rather not my roads focus on being profitable. I'd really prefer the opposite of my police force focusing on being profitable. I'd really start freaking out if my voting system(the actual counting of votes) focused on turning a profit, and probably take to streets if my public schools were trying to profit off my children.

Efficiency, sure, what's inefficient about the USPS? I sent a package over my lunch break today, and my package delivery is 10x better delivered by a USPS mailperson than someone hired by amazon. (A USPS mailperson leaves a package at my door, but I've had packages from amazon thrown into my bushes, or dropped beside the street)

Yeah but a website/accounting function? It should be accurate, efficient and legal. Which our tax office is sometimes seen as not-those-things.

And this whole thread is how TurboTax lobbied to make it inaccurate, inefficient, and no doubt have tried to make it illegal.

But USPS is focused on efficiency and profitability. They have streamlined many of their operations and created new profit making initiatives (e.g. Informed Delivery), all while having the mandate that mail cost the same from Alaska to Florida as from New York to DC. They just have the aforementioned budget burden to fund retirement funds no other organization, public or private, would ever bear upon themselves voluntarily. And they can’t set their own rates. And they have to deliver to every address once a day six days a week no matter what.

This is a strawman argument. Being "government run" does not automatically equate to being irresponsible or inefficient. Your complaint holds no water: Social Security and Medicare are incredibly efficient programs for their scale, and both wildly popular with their participants (per Pew Research as well as direct survey data from SSA and HHS). If they can achieve such results, why would other large orgs such as the IRS not? Rhetorical of course! They can, with proper political and logistical support (as has been seen with USDS/18F executing at the IRS, DHS, and VA).

I don’t know about social security but the claim that Medicare is more efficient than private insurers is not correct. It only appears to be so due to accounting procedures that do not expense services from other govt agencies on Medicare’s pnl. So for example, a different department of the government handles billing, all the costs therein are not included in Medicare’s bottom line, thus inflating its efficiency.

https://www.politifact.com/truth-o-meter/statements/2017/sep... (Comparing administrative costs for private insurance and Medicare)

Medicare is still more efficient than private insurance, even allowing for Social Security handling a lot of the administration you mention. Social Security must exist, and must provide the services it does, so you would of course rely on their infra if you're Medicare.

So the government is incredibly inefficient at everything... except health insurance?

Those weren't my words at all.

it is telling that the only way you seem to judge entities is through the lens of efficiency and profitability on a short term basis.

could you please share your thoughts about internet access in the US of A? it seems that despite the best efforts of Saint Market, long may he reign, and all of this wonderful competition and efficient allocation of resources and so forth optimizing for short term outcomes has led to mediocre speeds and monopoly-ish behavior/choice in most areas.

or that Saint Market has led to pretty poor health outcomes in the USA despite spending massively amount more per capita than other nations

or that Saint Market's desire for profitability and efficiency leads them to, say, not replace lead pipes which ruin health of various communities (probably far away from yours, so it's OK .... for now)

it's almost like evaluating things based on extremely myopic criteria that people use to judge for-profit companies leads to outcomes that optimize for local maxima but are horrible when viewed from even slightly more far out, like, i dunno, a few years.

can you acknowledge that some things are best evaluated on performance outside of "profitability" and "efficiency" in the time span of 3 months?

Ok, how about cost overruns, administrative costs, technology upgrades and on and on? Its only as regards these things, that I regard profitability to be an important pressure.

Management responsible to the bottom line will sometimes improve those things. Management responsible to … I don't know what a government agency is responsible to? rarely upgrades, review, improves. It is axiomatic of government agencies that they exist for their own sake. And cost a bucketload of (our) money.

Why is profitability important for a government-run entity?

Because we pay for it. So it should be run without egregious cost overruns, huge administration costs and old technology.

That sounds like breaking even, not profiting?

All of this /could/ be provided by the private market or by volunteers, but the things you're describing have a huge operational expense--especially in more rural areas. Something like tax software has more of a capital expense paid upfront. It doesn't cost significantly more if its widely used or used in more rural areas.

With taxes you're interfacing directly with the government; that's either as a citizen or Turbo Tax as a proxy for the citizen. To me, that seems more appropriate for the government to handle than fire, police, or sewer service. Whether it's the citizen or Turbo Tax, it costs money to implement Congress' tax code and build out a "UI" (tax forms). It still costs money to audit. So you're outsourcing one portion of the interface, you still have to build/maintain an e-file protocol, and you're doubling up on the auditing.

History bears this out as a band-aid. The program started in 2001 under GW because other countries already had online tax filing and engaging the private sector was seen as a way to "catch up" quickly. 20 years later it's still miserable for the average citizen and there are countless examples of other countries showing how much easier it can be.

USPS has also lost a massive amount of money due to being required to accept shipments from China at extremely low rates.

This is misleading. The USPS has an operating budget of about $70 Billion dollars per year, and loses about $150 million per year as a result of lopsided "terminal dues" under the UPU. So about .2%, and not all of this is due to China. While there is legitimate fear that this loss will continue to increase, relative to their budget it is not "a massive amount of money". This link has more complete numbers: https://www.lawfareblog.com/withdrawal-universal-postal-unio....

but if private enterprise is more efficient than govt, what do they have to fear?

A breakdown of a belief system.

I worked for a self-sustaining government entity for a few years. There was no direct appropriation, all funds re recovered via fees. We were able to compete successfully with commercial entities in a variety of ways.

A big advantage is overhead. If the work scales out, government employees get paid less, especially executives. The disadvantage was that you couldn’t make money to re-invest, and capitalizing new services was difficult.

.gov orgs get a lot of grief, but if you compare them to an average large company, they aren’t as awful as most people think.

I've worked in a private sector (publicly traded) fortune 500 company, a large government contractor, a non-profit state government subsidiary that was quasi-independent, and now for a state government.

My experience is that in the public sector, things often move slower, but the range of productivity seems to have a significant overlap with an average large company. I think the cost of nobody believing in what they are doing is an underappreciated drag on many private sector workplaces. The fact that failure is not an option in the public sector has several oft repeated negative consequences, but it also means that you have a reason for coming to work and making an effort, (other than not starving) even if nobody appreciates it, management is terrible, working conditions are lousy, pay is poor, co-workers are idiots, etc. That counts for something towards effectiveness, if there is a core group that hasn't descended into nihilism.

Government is forcing people to pay their taxes, so Government needs to provide a free and easy way for people to pay their taxes.

> How does a 'free' government company respond to competition (since they have no pressure to be profitable)?

The leadership of government organizations has pressure to get re-elected, or to get someone from their party elected.

I'm not sure whether you are simply ignorant how representative democracy is supposed to work, or whether you're feigning ignorance. Is it really so unfathomable that people might be motivated by something other than financial gain? Are we expected to take anything else you say seriously if this is the starting point of your ideology?

Is the vote of the election ever: "Can you make this one website that is messy better?". People are more focused on big issues and annoying software won't often make the platform.

The vote of the election isn't "Can you make this one website that is messy better?" because the politicians are incentivized to never let it get that bad.

One only has to take a look at the Obama administration's apparent panic over healthcare.gov to see this at work. When it wasn't going well, it very much was a political issue at the forefront of political conversation.

> TurboTax on the other hand, is a relatively nice experience.

For this tax year I used TurboTax. I have a relatively simple return, but editing stock sales was extremely tedious and I was constantly upsold on random products when I just wanted to go to the e-file page.

TurboTax is getting worse and worse every year.

One example where it worked well before and became a complicated mess now: for some deductions you need answer a lot of questions just for it to tell you that you are not eligible because of your income. Why not to check this in the very beginning?

If they told you sooner that you weren't elligible, your return would be lower, and maybe you'd feel you could "get more back" by using a different tax preparation program, but at the juncture where you're told it isn't possible, you already feel more invested in using Turbotax and ultimately filing with it.

I file my taxes in Australia using a government-run web application. It's not perfect (like all big government systems it has outages, etc etc) but I can't really complain about it, it's more than adequate to get the job done and I certainly wouldn't want to pay for something that's only marginally better. There's a few UX tweaks which would be nice but it's fine, really.

"Intuit succeeded so I'm happy."

This year it took me over a week of full-time study to file my federal taxes! Correspondingly, my Calfile submission was done in perhaps 20 minutes. Thank you for your service. Reminds me of filing in New Zealand, a breeze.

Question, the site and now you mention it does not support Capital gain/loss. I used it anyway, it asked for Adjusted Income from federal return, which takes those into account? So it appears to support it after all. Still confused about that.

(I refuse to share my financial info with a malicious third party, and continue to.)

One nitpick on the Calfile UI, it puts the "Continue" buttons on the left instead of the right side, which seems odd for folks that read left to right.

Hats off to you, sir. Please don't stop the work you do. Thank you!

After college I quickly weaned myself off TurboTax in favor of filing taxes for free with CalFile & Free Fillable Forms with an occasional paper mailing of PDFs that I download and fill out. Much like my opposition to using proprietary word processors, my disdain of paid tax return services that own your data is deep and profound.

While a bit painful and limited in feature set, the mere existence of a free filing option is crucial to keeping Intuit from forcing me to pay to file my returns. I find Intuit to be a rather evil company. Filing a return is mandated by law with steep penalties. They intentionally keep the process complicated and convoluted. It's a plundering of everyone's time for unproductive work and overspending on something that should be quick and easy.

> I find Intuit to be a rather evil company.

Heads up then because Intuit is behind Free Fillable Forms.

In fact, when confirming phone numbers the calling number is from Intuit.

That is not unexpected because they are part of the consortium running Free Fillable Forms.

It's just one of those things where the USA lags behind the rest of the world, not being able to file directly with the tax authority.

> Heads up then because Intuit is behind Free Fillable Forms.

Thank you for pointing this out, but yes I am aware. It is the only method to electronically file federal taxes for free. If FFF gets dropped due to Intuit's posturing then I will have to resort to paper filing.

> 1. Last time they tried to do what all of you ask, a ready return. TurboTax and others hired bunch of lobbyist and put so much pressure on people here and killed the project. People are still afraid and don't want to do too much to grab the attention of their lobbyist!

This is insane. Where are the actual citizens at the negotiating table?

This is always the problem with these sorts of things... TurboTax cares a LOT more about this issue than an individual citizen... sure, it costs each citizen $50-100 every year to file their taxes, and they would love to have a free public option... but it is literally THE ENTIRE BUSINESS for TurboTax. They are going to fight so much harder than the people who pay the $100 a year. Concentrated gains and widely distributed costs create this imbalance.

Here's a great podcast that goes over what happened. There is a transcript too.


Pushed out by money.

There are efforts to fund politics on small donations. I'm on board.

Consider looking into them.

Honestly, the citizens will have no place at the policy table, until they take some seats on their own dime.

So, that's happening. Ideally, other changes can be made, but to even get at those, some power is required.

Can you expand on why people are "afraid" of lobbyists? The way you write that makes it sound like the elected officials the lobbyists are trying to convince, are afraid of those same lobbyists. What I assume you meant is that ground troops like you are afraid lobbyists will notice your work and pay more attention to your given team of elected politicians.

Can you help me understand?

My intuition is that the elected officials are wary of choosing positions blatantly opposite of the interests the lobbyists are pushing for since the lobbyists could easily support a different candidate and put a lot of money into supporting them. So if you don't behave in the way the powerful lobbyists want, they'll get you kicked out of office.

It is exactly this.

You look at donations to people from corporations or through lobbyists and they don't look that large, $15-20k and they are getting big bills passed.

That $15-20k isn't buying the politician or their vote. The threat to give millions of dollars to the opposing politician that will support them is.

There are limits on how much you can donate to a candidate's campaign; however, you can contribute unlimited funds to a PAC, but the PAC's advertisement efforts must be separate from the candidates; they can't be coordinated.

Which is perfect for a company like TurboTax who wants to lobby for an issue... they don't care about the candidate, they don't have to coordinate with them at all... they just tell the representative, "if you don't vote my way, we will fund a PAC that will attack you". No candidate coordination, no problem.

Conversely, people opposed to TurboTax could get their own lobbyist and do the same thing.

As I said in another comment, no one cares about free taxes as much as TurboTax cares about not having free taxes. It is a minor annoyance to every citizen, but it is life or death for TurboTax.

The people who are hurt by not having free taxes certainly can't afford lobbyists, and even if they could... they would have to spend so much more than they pay in tax preparation fees for their whole life to compete with TurboTax money. Who would do that?

Collectively, people spend billions annually on TurboTax. They could, instead, all chip in $25 for their own lobbyist, if they cared enough to not spend $100 on TurboTax.

If they can afford TurboTax, they can afford the lobbyist.

Couple of problems with that... one, not everyone would chip in. Why would they? If there is a fund paying lobbyists, my $25 is not going to make a huge difference.... they aren't going to win or lose based on my contribution, so why contribute? Your money wont change the outcome, and you will get the benefit even if you don't participate... standard Free Rider problem.

You might say that you should donate out to the fund out of moral principle of a just cause, but there are a million just causes, a million small rent seeking industries that do this sort of thing. Which of them do I donate to fight against? Why income tax and not one of the others?

TurboTax is going to be willing to spend a LOT of money to fight this... you are going to have to get a LOT of people to choose your moral cause, and donate to the PAC.... and then find even more when TurboTax spends even more on lobbying to counteract your PAC. Who is going to give up first?

A lot of people are saying that the fear comes from lobbyists and the interest groups they represent giving money to opponents. That is partially true, but money is just part of the overall influence that the interest groups lobbyists represent wield.

In the case of ReadyReturn, one of the key players is Grover Norquist, an anti-tax activist. (see https://priceonomics.com/the-stanford-professor-who-fought-t... for some of the older history here) He has this incredible network of anti-tax groups, media figures, and others that can be activated to attack and take down politicians, particularly republicans, without spending a dime (altough they also have money to spend).

It might seem wrong, but it is fundamentally the same mechanism by which liberal action networks (like human rights campaign or NARAL) drive their political influence as well.

It is these networks of influence that politicians really fear, because they are so much more effective then money.

Lobbyists often threaten to fund whoever will campaign against the elected official at the next election. They say "we will allocate $1M to a PAC benefiting your opponent if you advocate for free tax filing".

It never ceases to astound me how this is allowed and accepted in the U.S. America is the first to complain about corruption in other countries around the world... yet here we are.

We privatized corruption and turned it into a business model

Corruption is legalized here. Changing these laws is hard!

so let me elaborate a bit, all the people that work on this agencies are employees, they are not politicians.

If a politician influenced by a lobbyist start to question the decision of an agency, have hearings, grill the management on the reasons they decided to waste tax payers money, etc. that is not fun for those employees.

There is no incentive for that trouble and people try to avoid it as much as possible.

Is CalFile an open source project that anyone can contribute to (and if so where do I go?) or is the FTB paying you to develop it as a closed-source product?

Seconded. I wouldn't mind contributing to it. Maybe if even the rules engine was released.

I thought calfile was the go-to place for cal state taxes? I use it every year and I think it's a fairly nice tool

Hey, your work is super interesting and I'm wondering if you have blog posts or papers somewhere that talk about the work involved in writing an application with complicated legal scenarios like this. I assume lawyers and tax professionals are involved with requirements and approving workflows, but I'd love to read about specifics.

Virginia used to have free online filing until the tax prep industry got one of their people elected and killed it off. Now our state efile options are more expensive than federal efile options.

You're doing great work! I'd love to try it next year. If I do, what do you recommend for filing my federal?

Is there anything like this for of the other big states like NY, Texas, and Florida?

One for NY should be pretty easy, just a splash page showing the user how to send the state everything in their bank account.

You sir, are Awesome! Keep up the good fight!

Now that I know about this, I'm definately going to use it. Can I use it for federal too? or do I need to use something else for federal, then I can use CalFile for state.

> Can I use it for federal too?

You may want to read the ProPublica article.

I had no idea CalFile existed, and I've been filing taxes in California since 1997. Thanks for weighing in!

The Pro Publica reporting about TurboTax's efforts to suppress the free option is eye-opening.

Given that open-source has given tough competition to every area of business software what, in your opinion, is the reason for a lack of open-source options to prepare taxes?

> Given that open-source has given tough competition to every area of business software


Open source word processors and spreadsheets? Open source ride hailing apps? Open source social media? Open source chat applications? Open source consumer operating systems?

Only in a few niches (mostly developer tools or platforms) is open source giving "tough competition".

I thought I heard Brazil had open source tax software. It would need to be sponsored and managed by the government in order to work. With open source software the liability is on the end user and a corrupted Word document is a bearable risk. Businesses pay for Red Had and system engineers to reduce the risk their systems won't boot. In addition, tax laws change all the time (and are honestly a bit subjective).

I would imagine it would have to be managed by the government (or someone with liability) but accept contributions that would be vetted and approved by the government.

It is not open-source. It is free and runs on the major 3 operating systems.

It's very costly to keep up with changing rules and is mostly a once a year need that has to be bullet proof at filing time. Not a good recipe for open source.

I don’t think your assertion is true. 99% of business software is helped by open source, not in competition with it. Business software = business logic = people gathering requirements. Not really compatible with open source

You are amazing for building and running this program. People like you are what give me hope that we can build a better government! Thanks for all you do!

Who is/are Turbotax's lobbyist/s? Who do they put most pressure on? It's hard to take action without knowing who the players are.

I tell everyone I know about CalFile. It is awesome. You are awesome for working on it.

Thanks for your work! I've used it and it is simple and just works. No fake loading bars to boot.

You literally have office politics. I salute you.

The linked site is not mobile friendly BTW as text is cut off (OnePlus 5 Chrome).

Posted it on Twitter. I encourage others to do so too. #freepromotion

Thanks for the info, will definitely use it next year !

Just for comparison: in Brazil the _Receita Federal_ (IRS equivalent) provides a free multi-platform* Java desktop app for filing your taxes.

The UI isn't great* and if you do complex stock trading it can be a pain to add the necessary information, but for the vast majority of people it works just fine.

It also shows if it is better to use the standard deduction or the itemized deductions for your particular case and also calculates your effective tax rate.

In fact, the Java App has for years been the only way to file personal income federal* tax. The paper forms were abolished because (almost) no one used them and they had a large rate of mistakes.

* The Java desktop app runs on Linux, macOS and Windows. (And possibly others) * There is a separate mobile app but I haven't actually used it. * In macOS there was bug in last year's version: it used ctrl instead of command for things like copy and paste. * There is no state income tax in Brazil.

Fun fact: the official tax filing application in Germany which has been around for a few decades is called "ELSTER" (apronym for Elektronische Steuererklärung, "Electronic Tax Return") which literally translates to "MAGPIE", as in "thieving magpie" ("Diebische Elster"). This is a form of self-irony which is quite unusual for the German tax offices.

OS portability has greatly improved with their online app [0], which is actually very good and easy to use. Before, the only stable way to run their Desktop application on Linux was through wine.

[0] https://www.elster.de/eportal/login

Having moved from Sweden to Germany I appreciate Elster existing (and not being solely paper based unlike the other many many German beaurocratic exercises one has to Wade through).

However it misses the most important part. In Sweden your tax declaration comes pre-populated with data they already have, like salary/pension/savings/stock sales/etc., and you can either just accept it as it is or make changes to the already existing data.

It's so easy that you in fact just can send an SMS (that is verified to be from you) to the taxation agency saying that their suggestion is right.

Banks send you letter the weeks before with capital gains, interest payments and employers send you letters with totals of taxes paid. They note if anything needs to be done manually.

The total time spend combined for me filing taxes for the last 10 years is less than 15 minutes. And the reason it isn't less than 3 is because I've logged in (using biometrics and password on my phone that is a hardware token to my bank wich is used for instant secure identification) to check that everything looks OK and to add the commuting at least 10 km/day on bike deduction.

In Germany, it's actually similar. You can opt in to include the data submitted for you by various sources and include them in your tax declaration. The only drawback is you need to select each one (salary, basic info, church tax info) to import it into your declaration, and that you need to wait until end of February since that's the deadline for third parties to submit your data.

Also, some things, like capital gains, you don't even need to declare if you used only German brokers, since they are legally required to submit it for you.

It's called "Vorausgefüllte Steuererklärung" (see https://www.elster.de/eportal/infoseite/belegabruf_%28privat...).

Brazil is going that way too. Currently only public servants and people with an expensive X.509 certificate get this pre-populated tax return, though.

In Brazil we have that option, but one must have a cryptographic token accepted by the government to access it. People usually don't have them, while companies are required to have one.

It takes many clicks and requires to wait for a letter once but Elster offers that too (under the term "Belegabruf"). It then prepopulates the tax return with the data they have.

ELSTER is one of the few examples that come into my mind in terms of "software done right": It's stable and "just works", at least for me.

It's first version was released to the public in 1999, so... Yes, ELSTER is around for almost 20 years now, getting constantly refined at least in the front-end.

All in all, it's something you wouldn't have expected here in Germany in terms of software projects from the government.

AFAIK, it is mostly developed in-house, at least the original version was developed by the Bavarian tax office. In my experience, if government software (for schools, tax offices, political participation, etc.) is developed by an external company, the primary objective of the company often quickly transforms from "creating usable software for all citizens" to "drain the most amount of money out of the infinite resources of the federal government".

It still is developed there but they have external consultants helping them.

I have to say that the UK's HMRC web-based self-assessment site has always struck me as being a really good example of tax returns done right.

It presents as the equivalent of the paper form but with many of the fields autocalculating for you, and offering contextual help. Quite nifty.

Yeah its pretty good when you consider the complexity it has to cover.

Here in Brazil the mascot of the Income Tax is a Lion, it's of an old ad campaign the government ran, comparing taxes with lions and saying "the lion is tame".

It's because of an old popular joke in that the government is a lion that will always take a lion-sized bite from your income.

It's really an old joke. On any reference I have ever found, no matter how old, the joke is already old and the readership is expected to know it.

Oh of _course_, http://en.wikipedia.org/wiki/Lion's_share

Which is obviously intentionally ironic considering that

> The lion's share is an idiomatic expression which refers to the major share of something.

I wonder what other countries tuck these kinds of harmlessly blatant humor in similarly unexpected places. It's nice.

The danish tax authority is called skat. It has a double meaning of taxes and loved one, it's as if the German one was called Schatz/Schätzle, I think it's cute.

Isn't skat more like treasure that's also used for people? At least that's how it is in Norwegian. No idea why taxes use the same word, it sure so in Norwegian too.

In Holland we have the word schat which also means treasure (and loved one).

As an extension of schat we also have schatkist, which means treasure chest, which is also used as the translation for treasury.

When I look up the meaning of schat the dictionary says: A large collection of valuables. I see how an organization gets named after the very thing they are supposed to handle.

skat/skatt is common to danish/norwegian/swedish, and in all countries it means both taxes and treasure. In danish/norwegian it also means loved one, but swedes would miss that point.

The danes have chosen to name their tax authority not "skat authority" or something like that, just "skat" which evokes the friendly/funny pun.

In English, the word "skat" is used to refer to animal droppings.

technically it is spelled "scat"

> This is a form of self-irony which is quite unusual for the German tax offices.

Love it.

Adding a data point with Mexico:

All invoices are digital. Every person who gets a TaxId also gets a Private/Public keypair and generating invoices means signing the document with that key. The amazing thing is that now accountants talk about the XML, which is the legal representation of the invoice.

As a result, every year if you file your taxes, you go I to the government freely provided website , get into your account and most of the data is there for the exercise, including deducted money that you can get back.

If you are a standard worker earning less than certain amount (very sensible, so the vast majority of workers fall in there) you don't even have to file your taxes.

That's one thing that is good about this country.

>also gets a Private/Public keypair

Tangential curiosity: how is this part done? Do you download the keys from a government website? How do they handle key reissues if a private key is compromised?

You can download a java app which generates the key pair taking mouse movement as entropy and then you to go to a SAT(IRS equivalent) office with the key in a USB drive, they take your biometrics and save the public key to your profile. However, as most people only bring the USB drive, they usually create the key pair in the in the office. If your key is compromised or lost, you have to go to the office and they change it in very much the same way.

It's a somewhat tedious process, but if you keep the key safe, which they very much advice, most of the procedures, including tax fillings, are pretty easy and fast.

What you have just said has thrown me into a tizz trying to understand what you have said. Could you please give a bit more practical details. Say I want to claim rent/transport/medical expenses. Will doctors, car rental place and landlords all issue me an electronic receipt?

Not from Mexico, so it might be different for them, but one way how this works in some places is that the tax office gets all the electronic receipts from all the cash register/POS systems anyway, since that's how they monitor sales/vat/excise/etc taxes paid by the merchant and reduce the risks of "under the counter" sales where fake receipts are issued but taxes not paid on the sale.

So if the doctor's office punches in my legal ID number with the receipt (or if the ID gets added automatically from the billing system that a large hospital would have), then when the office sends all their receipt files to the tax office, the tax office will automatically add that electronic receipt to my tax deduction.

Yes. Not all spending can be deducted. But for the ones you do, you have the right to ask for the "electronic invoice" and the business has to give it to you.

When that happens they ask you for your TAX ID and then the business generates the invoice and your taxid and their taxid makes the tie. The Mexican IRS systems see all of this. So at the tax reporting moment, the system will have all that info.

It is pretty neat actually. However I think it is possible bc in Mexico people are not that concerned with privacy and all that.

Canada doesn't release its own software, but it certifies a selection of free and paid software of varying complexity.

I'd like it if we could take up other, simpler models of sorting out income tax but I use software out of this pool† every year and its served me just fine:


† usually StudioTax. I donated to them last year. It's not pretty software but it's effective and easy to use. https://www.studiotax.com/en/

"Our business model is similar to that of a street performer. You can use and enjoy our software and later decide if the experience was worth it and you can afford a donation. However, based on many users’ feedback, you should be wary of recent free offerings from big commercial organizations. To use our previous analogy, they are big circuses that send their clowns out to the street to attract unsuspecting customers to their tents and pressure them in paying for their overpriced shows."

I concur. Studio Tax is not pretty but it gets the job done for most people.

I used SimpleTax for the first time this year and it's a lot more intuitive than StudioTax which I used in the past. It may not be ideal for every situation, but it was much simpler for me.

In Sweden, the government does the work for most normal cases. They send you a suggestion of “this is all we know about” and you just say “yeah, seems right” via SMS.

In Ireland you don’t do anything in the usual case, unless you think it’s wrong, everything is taxed at source by the employers/banks.

Both cases different if you’re a company ofc.

Brazil has started offering pre filled income tax declarations.

However, they require a digital certificate to download (probably for privacy reasons) and I don't have one so I couldn't test it.

It seems a bit naive of the government to reveal to you your income sources they know about. If you have any hidden ones you can confidently not report them and pay less taxes than you would otherwise.

It's the same in Denmark and it feels right to me. It's not like they are doing detective work (per default). If you have a concealed source of income, I'd expect them not to know about it. Of course, you'd still be breaking the law by not reporting it and it could turn up if they notice something that doesn't add up somewhere.

I assume this would still be a crime, and you'd be held responsible for lying on the past forms in discovered. The only difference is, this is optimized for making the common case easier - the case of typical income of regular, honest individuals.

Not really. Everyone is aware of what is automatically reported to the tax authorities.

Until you're selected for a random audit and quickly get charged with tax fraud.

They only know what they sent you. So an audit wouldn't turn up new information just force you to prove existing information.

Do note that it the responsibility of the employer to report who is employed, so if anything is missing, then it will generally be the company that is the one in the wrong. Especially as the company also pay employer fees for employees, so it would be a flagrant case for the tax agency anyhow.

In Spain it used to be a Java desktop app as well, the last incarnation of a software that started as a DOS program distributed in diskettes back in 1988. Now it's no longer a standalone program, but a website (not sure which technology, but it runs in current browsers without requiring Java installed, AFAIR).

The government makes a draft declaration for you, if it's OK you just have to digitally sign your agreement and provide a bank account to pay or receive your return (if you haven't already done that in the past). Otherwise you need to edit it adding whatever they've missed, but this is only needed if you do complex stock trading, operate with money abroad, etc. For most people it's just skimming through it in case there is an obvious error, and confirming the draft.

Once you confirm the draft, it takes only around 2-4 days for the tax return money to appear in your bank account.

The website's UI is good. Spanish e-administration webapps are a bit hit-and-miss, some are dreadful (digital certificate request, I'm looking at you), but that particular one is fine and has always worked well for me.

Same in France, it's a simple website. You receive a notification email, connect with a simple login and password, check that the pre-filled form is correct, and validate.

> Brazil the _Receita Federal_ (IRS equivalent) provides a free multi-platform Java desktop app for filing your taxes.

Other fun stuff about that desktop app...

* Originally, it was a DOS-only program (yes, it's that old). Then for a while, it was Windows-only, then for some time (probably due to the Linux users complaining) there was both the Windows-only version and the Java multi-platform version, and later the Windows-only version was discontinued.

* The original way of sending the output of this program to Receita Federal was to write it to a floppy disk and take it to a bank, which would read and upload it. Later functionality was added to send it through the Internet instead, and some time later the floppy disk option was removed.

> probably due to the Linux users complaining

For a while a lot of non-aligned countries were mandating the exclusive use of open-source software by government agencies, because the idea of their government being beholden to a US corporation was anathema. I suspect this was the motivation behind eliminating the Microsoft-only government service.

I haven't heard much about that open-source requirement lately. I suspect the Long Reach has been making quiet moves behind the scenes, and the ascendancy of neofascist regimes in many of those countries will do what fascist regimes always do (ie. cater to the cartel making up the fasces).

Short recap from somewhere else:

In the Netherlands we had (for a very short while at least as far as I remember) a DOS program as well on diskette. I never used it but my dad did when internet explorer was not yet evil and msn was a network. You could send it in via modem (9k6 baud yay!) and it would work ... sometimes or hand it in via the diskette. Once the internet got going you could send it more easily as you could send the created files directly instead of relying on the modem dial-in via dos.

For myself I never filed on paper (2002 first one). After the introduction of windows programs they ported it to linux the next year (filed the first one on windows only on a library pc, program might have existed earlier) and have now switched to web based. If you had a company which did their taxes on time everything was (and is) filled out mostly correct. You check it and sign off. As a student it took a while to fill in all the deductibles but if you just have to pay you are done in minutes.

Is/was it perfect? Far from. Does it work for most people? Yes.

> The original way of sending the output of this program to Receita Federal was to write it to a floppy disk and take it to a bank

My cousin started work as a company messenger back in the early 80s and these are the sort of tasks he used to do. Its amazing that the profession has died out in in such relatively short space of time. I guess courier companies have filled in the slot but courier companies would never have coped with the number of documents that needed to be ferried about town in the old days.

The old Australian online tax filing system, through to the early 2010s, was an extremely 90s-looking Delphi application, Windows only for most of that time until they released an OS X port towards the end. Linux support consisted of a note on the website saying "some users have reported success with Wine". I don't believe they ever did floppy disk output though.

It's been replaced by something far nicer and web based! Though the old application was still definitely better than doing taxes by hand or having to pay for some third-party thing.

Same in Chile. If you have a regular, salaried job, your employer reports your earnings and all income taxes that have been paid, your bank reports your interest income, etc.

It takes less than 5 minutes to do your taxes unless you have unusual sources of income.

I also want to brag about Tax-On-Web for Belgium. Development started over 15 years ago, it's been steadily improving over the years, it even works for linux users, it already fills in all tax details they already know (like wages)

I love it!

In Australia a sort of spreadsheet-like app is published each year. It pulls in data from a variety of sources (banks and employers mostly, IIRC), fills in everything it can and then lets you do the rest.

Windows only last time I did it (7 years ago?), things may have improved further since then.

All Web based now, no thick client. It still pools in all of your data from various sources as the old e tax client did. It was only Windows too from what I recall. It's all been centralised in myGov for a few years.

It's online via mygov these days. took a couple of steps back initially since it was missing functionality but I think it's mostly there now.

I moved to Australia last year and was shocked that it took me less than two minutes to file taxes. What a dream.

There are proposals in the US to do this.

I think the best I've seen so far is Andrew Yang's plan:


Opt in to have your taxes automatically done. National celebration of projects completed. Ability to specify where 1% of your taxes go.

So not only make it easy to do, but try to make it fun and shift the mindset from burden to societal contribution.

Similar in NL; it used to be a desktop app (which IIRC was even distributed via diskettes or a CD-ROM but later just a download), nowadays it's a webapp. Also prefills most information from employers (who already pay your income tax for you every month), mortgages, banks, etc.

The only complexity for me came when I bought my house (some costs are deductible) and when I had to report Bitcoin held at Coinbase (and for that I had to report the (EUR) on January 1st 2018 specifically).

In Israel employee taxes are calculated and paid by the employer.

Only self-employed, people with side-jobs or people who make over a certain threshold need to file their taxes manually (and in that case things are a bit complicated).

Healthcare, pensions and benefits are paid as part of the paycheck if you are employed (they are universal and mandatory, so not the same as in the U.S.), there are no other deductibles that a regular person can claim.

In Ukraine there is a government webapp where you can fill all possible tax forms, and they come mostly pre-filled. The only small hurdle is getting the private/public key, it's fast, but only happens upon request or if you have a bank account at supported banks. If you were only on a payroll, you don't need to declare anything at all, it happens automatically.

As an American living in Kanton Zürich, I used both (paid) TurboTax and (free) Privat Tax (straight from the cantonal government).

Swiss one was way easier to understand by far. As a side effect of doing those taxes, it was easy to see my actual wealth and my actual net income for the year. Which in America is a sin.

UK provides a web form. Pretty well done one considering the complexity. I think you can use your own software too if you like and theres some sort of submission api.

The only out-of-date thing I've noticed on the UK one is stuff like 'this PDF of your tax return is 1.5mb, on a dial up modem this might take 5 mins to download' etc. And I guess some people might still be on that kind of link so fair enough

edit: And yeah in the UK you dont have to file at all if your situation is simple (e.g. you just have one job and one source of income).

It's probably worth noting that most people in the UK don't have to file at all (if you're on a wage and not in the top tax band, it's all automatic in your paycheck), and if you have a dispute/complication you just write a simple letter to the tax office laying out your case.

I've used the mobile app on Android, it wasn't a joy (it still lacks some polishing), but it was certainly VERY straightforward.

Personally I don't have lots of stuff to file, but I did everything under 1 hour, while still discovering how to use the app and learning a bunch of taxes nomenclature.

I was under the impression - perhaps falsely - that taxes in Brazil were nightmarishly complex?

Its simple if your are an employee and complex if you are an employer. For the self employed there is a super simple filling up to a certain threshold. Companies also have additional requirements based on revenue brackets, number of employees and type of economic activities they do. Anything sligth complex eill require multiple agencies fees and byzanthine laws.

There's a lot of players involved. IMO for regular people it's simple/cheap, but for companies/employers it's complex/expensive

Federal government charges taxes on income, production, import/export and over bank operations; states charge consumption and vehicle taxes; cities charge service and property taxes. Then there's also contributions that employers pay for workers, and some that workers pay.

However, consumption tax can compound itself (because of sales between distributors, or taxes over raw materials), so there's a "substitution" formula which can get pretty weird (but companies take care of it).

Similar case in Spain.

I like propublica's reporting on this but geez, this needs an award for one of the top HN obsessions. Within the past 7 months:

TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free; 211 points -- 54 minutes ago

TurboTax to charge more lower-income customers; 144 points -- 3 months ago

Congress Scraps Provision to Restrict IRS from Competing with TurboTax; 82 points -- 4 months ago

Listen to TurboTax Lie to Get Out of Refunding Overcharged Customers; 171 points -- 5 months ago

TurboTax Uses a “Military Discount” to Trick Troops into Paying to File Taxes; 170 points -- 5 months ago

TurboTax and H&R Block Saw Free Tax Filing as a Threat; 355 points -- 6 months ago

TurboTax Hides Its Free File Page from Search Engines; 881 points -- 6 months ago

TurboTax Uses Dark Patterns to Trick You into Paying to File Your Taxes; 608 points -- 6 months ago

How the Maker of TurboTax Fought Free, Simple Tax Filing (2013); 462 points -- 7 months ago

edit: if you _still_ haven't gotten enough TurboTax reporting, there's a great Reply All episode that covers propublica's reporting as well https://gimletmedia.com/shows/reply-all/6nhgol

Americans are starting to wake up to the fact they live in what is by far the richest country, but that the systems in place just make the rich richer, while nothing is done to improve the lives of the middle and lower classes.

In this particular case, the rich are actively using the system to stop an improvement to the quality of life of regular people.

What's the point in living in the richest country in the world when your quality of life is lower than many countries that don't have nearly so much money?

The fact that America has the 10th highest GDP per capita [1] and huge swaths of it are little better off than a third world nation is a complete disgrace.

1: (its 4 micro city states above it, which are economically special, and 5 nations that could reasonably be considered full sized countries, however all of them still have relatively small populations)

I would argue that there are few, if any, countries in the world that this description would not apply to.

However, I agree with the point that you're making wholeheartedly. There's a very serious amount of wealth disparity around the world, and the rich have gotten so rich that they can't even feasibly spend all of their money if they had to.

You need to spend more time in better countries.

The lives of middle and lower class people in Australia, Canada, Scandinavia, etc. are much, much, much better than Americans, and improving all the time.

Do you think so? I live in Toronto and wealth inequality is still constantly at the forefront of political discourse. Obviously Toronto isn't indicative of the rest of Canada, but I don't feel as if poor Canadians are especially better off than poor Americans.

They are much, much better off. Just having healthcare makes a huge difference alone.

And yet the cost of implementing a government algorithm has not yet fallen to near-zero.

Furthermore, the government has surely implemented the algorithm itself in order to verify submitted tax returns, so the implementation cost of pre-computing everyone's tax should be comparatively small.

Maybe I’m overly cynical, but creating tax returns for everyone for free would prevent the IRS from allowing you to incriminate yourself by mis-filing (intentionally or not) and then levying huge penalties and interest on you 10 years later.

Everyone is hating on TurboTax for making money, but they’re pretending the government tax machine has no such motivation, which simply is not true.

The government tax machine is in the business of collecting taxes, not running up fines. I've had several interactions where the IRS was totally with in their rights to fine me but they waved each fine because they understood it was unintentional.

The only times I've heard of the IRS going after people who unintentionally violated the rules, they were intentionally and obviously violating the spirit of the law but thought they were within the letter and were wrong.

In my experience you can make a good faith effort to figure out what your supposed to owe and pay it. In this case the IRS will treat you fairly and waive all types of fines. Or you can try to aggressively avoid taxes that you should owe in spirit. And in this case you have to be damn sure you're within the letter of the law because the IRS will try to hammer you if you color outside the lines. These seem like two fair options to me. And everyone I know who was slammed by the IRS was doing the latter.

> Maybe I’m overly cynical, but creating tax returns for everyone for free would prevent the IRS from allowing you to incriminate yourself by mis-filing (intentionally or not) and then levying huge penalties and interest on you 10 years later.

Many countries pre-fill the tax return, but require the citizen to submit it. The citizen is responsible for the submitted information, not the government.

That would expose the level of identity theft that the IRS does nothing about and actively tries to hide by refusing to provide identity theft victims with documentation.


Yeah, that's overly cynical. :) If they switched to a pre-filled system, the revenue from penalties would go down, but it's quite likely the amount they would bring in would actually go up, assuming this reduced tax fraud. In 2016, they charged $24.1 billion in penalties -- but they estimate tax fraud cost them around $458 billion. If they lost 90% of the revenue for the penalties but cut the tax fraud even by 25%, they would be way, way ahead.

They can't levy huge penalties and interest on you 10 years later. Generally they have 3 years or maybe 6 [0].

[0] https://www.americanbar.org/groups/business_law/publications...


There is a word for what you did: exaggeration. But your exaggeration was small enough that it was believable and thus misleading.

Now you are criticizing someone for giving a factual response. Time for some reflection.


We aren’t going to get anywhere in this thread, my friend. TurboTax is evil. Ignore the fact that there are a dozen other companies offering the same service and that prices have actually fallen because of that competition.

Also no mention of filling out the free 1040 form... that’s too difficult. As if the companies charging you to do that for you just existed because they were forcing people to pay them...

I haven't looked this up, but I'm pretty sure audits are way down. There was a recent an article saying the IRS was focusing on auditing poorer people because it's too expensive to audit rich people. Since their budget is completely separate from tax income (and their budget has consistently been reduced), it was driven by their local incentives even if that means total tax income was way lower.

So what? Fuck TurboTax trying to rent seek mine and anyone's ability to pay taxes. What's next? Feudalism?

You know, there’s a paper form you can fill out and send in for free if you’re that angry about it.

Sure, that's always an option, but due the complexity of the tax codes, it's very easy to make a mistake when doing everything yourself.

For example, I used to work in New Jersey, and live in New York, meaning I would have to file two state tax returns, in addition to the federal. There are weird rules that you can deduct one state's taxes from the other, and then deduct the remainder from the federal taxes. The rules get complex really quickly, and even with helpful software I made a mistake one year resulting in a fine. I can't imagine how frequently I'd make mistakes if I had to do it manually.

TurboTax definitely provides a service by making it so that schmucks like me can do taxes, but if the tax code is that complex, shouldn't we have a software like this for free? At the very least, to provide some motivations to politicians to help simplify the tax code?

> to provide some motivations to politicians to help simplify the tax code?

You speak of NJ, NY, taxes, "mistakes", fines, potential "audits" by the IRS, then wonder why politicians would want to simplify and improve something that many of them likely grift from or cheat on themselves, due to that same complexity...

...and one of the biggest of these tax cheats hails from NY, likely has had his now (on again, off again) lawyer, who used to be mayor of NYC and before that as a US AG - probably ran interference for his cheating and other scams.

But all of them - and plenty of others - benefit from the complexity and other issues, and don't want it any other way, unfortunately. No real good solutions to that.

Hey now, no pointing out that the government has an incentive to keep the system difficult and confusing because it gets them money!

That’s absolutely not acceptable in this thread (I tried)!

Tax code complexity and the mechanics of filing are orthogonal. Fixing both is not a requirement for fixing either separately, or an excuse for not doing it.

How much was the fine? What sort of mistake was made?

Fine wasn't that big, on the order of $150.

It wasn't actually directly due to the multi-state thing. I paid for my wife's college, and NY has a thing to let you deduct tuition from dependents on taxes. I had forgotten to attach the proof of payment for tuition, leading to me getting audited (in the most technical send of the word) and fined slightly. The biggest pain in the ass was the back-and-forth I had to do to close my case, which involved me faxing things multiple times.

Horrendous. Australia doesn't fine for making a mistake. They just send you a notice to pay the difference.

There have been a couple of years where I worked several different out-of-state contract gigs, and a couple of years where I received unemployment due to me from an out-of-state employer. I was not trying to do anything monstrously complicated, nor was I some millionaire - I just did the jobs that I was able to land to feed my family and pay our mortgage.

I went to experienced tax professionals to help me with those returns, and _they_ were baffled, spent hours pulling out phone book-sized paper guidebooks, and debating with each other, and making phone calls to colleagues, and I had to file amended returns - in one case, _twice_. Fortunately they never charged me anything to correct the errors, but... wow.

What hope would I have had to get it right myself, trying to fill out the various schedules?

And you are a special case that does truely need an accountant to fill out their paperwork. Majority of people do not.

I do that because I think it's inappropriate that any third party should have access to private financial information that's no one's business but mine and the IRS's.

Still, it's an irksome chore that I would prefer not to have to do.

What form? do you mean just sending letters to my reps?

I imagine the same ones available before computers were widely available. You used to be able to pick them up at the local library.

That's an average of 5.28 months ago, which would've been around the beginning of May, less than a month after taxes were due to be filed. Three of the articles are from 6 months ago (mid-April), and one from 7 months ago (before filing was due). It shouldn't come as a surprise that taxes, and the cost to file them, would be fresh on peoples minds at that time.

It's an issue that affects almost every American, why not obsess? I've seen two stories in the past day about Google Nest which affects maybe 10%? What a bizarre obsession.

This is a site for "disrupting" anti-competitive bullshit, what did you expect?

A few weeks ago I started an LLC in New York. I followed all the simple instructions online and the process was actually very straightforward and easy. I had an official digital copy of proof my LLC existed within an hour. I went to sleep with and thought that there is hope for our government.

Within a few days I received a letter from a private company informing me that unless I pay them $1000 to publish the name of my LLC in two public newspapers for six weeks, one daily newspaper and one weekly newspaper, in 120 days my LLC would need to cease doing business in NY. I pull out my phone and did a quick online search. Lo and behold, there is a law that says the same.

In this golden age, the government has chosen to require me to pay a private archaic company to print in ink thousands of times on paper the silly name of an LLC I just came up with, then proceed to distribute it by truck to a bunch of old people that then proceed to throw it in the garbage.

No fancy tax algorithms would be required for NY to simply drop this nonsensical requirement. Maybe this process exists because there are groups of people making a small fortune from it?

In VA, if you want an alcohol license for your restaurant, you are required to print an ad in a local newspaper stating that you intend to get a license. I'm guessing it's so some prohibitionist can call up the ABC and complain? It's completely ridiculous. I wondering what will happen when print newspaper ceases to exist.

I've noticed a lot of "public notice" laws. Either a physical sign on the property or something published in the newspaper. I'm not quite sure what the digital equivalent would be--a government run "announce" page that gets indexed and archived? Not really much different from press releases governments and businesses already do required by other laws.

I do see the value in publicly announcing things, but I do see newspapers as archaic.

Most modern states just post a sign over the door prior to opening that X company seeks Y license and this location.

Yeah, that works for changes at a physical location. What about founding of an LLC or other less tangible changes? Even with a physical sign it would be nice to have a searchable long term record. That seems to be what newspapers fulfilled; public broadcast and a reasonable long-term archive.

Around here the Company Court (which decides that a company formation was lawful and registers the company) has a journal/gazette, and that's the official record. Nowadays it's of course fully on-line. And lawyers (who submit the paperwork of the new company) do it exclusively on-line (they basically upload a signed ZIP of the scanned pages and an XML)!

The clerks at this court look at the scanned pages and confirm that yes they do say what the XML says, and then this gets published.

People can search for company histories, look at their bylaws, etc.

Similarly there's a different gov service for publishing corporate yearly financial reports.

Why isn't something like that for US states?

In Palo Alto we would receive notices in our mailbox whenever a local business was applying for a liquor license.

I think this is fairly common.

Don't forget about the publication certificate fee too:

> After you get done publishing, the newspaper will provide an Affidavit of Publication, and you send that to the New York Division of Corporations with a Certificate of Publication that carries a $50 filing fee.

I live in NY but never filed an LLC, but I Google'd that. I can't believe such nonsense exists to get money in a state that already has high state / sales taxes.

Don’t falter that easy. If the law is stated so clearly, then start 3 more LLC’s and offer the news posting service for $10 in your new publications that only publish new LLC’s.

There’s a ton of this little silly companies delegated by government. It’s akin to lobbying in a way. They depend on inefficiencies.

Best argument I’ve heard is “gotta keep people employed somehow, can’t be too efficient”

Ah, this.

1. Please ignore almost all the mail you get initially. There are public companies that troll NYS business registration logs and send TONS of false and highly misleading if not illegal advertisements. "You totally need this $900 OSHA poster you can just print for free and paste on the wall". "Ignore the fact we copied NYS' letterhead but aren't a governemnt entity", etc.

2. The NYS tax department will send you one real piece of mail as a questionnaire.

3. Yes, the newspaper requirement is real and fucking terrible. It's a very old holdover however politicians don't want to get rid of it because quite literally, it's a handout program for newspapers. It would make alot of "local" papers nobody reads, close up shops.

4. Shop around, there are a few ways to save money on it. Honestly, I made a LLC 2 years ago in NYS and haven't even used it business wise. I have yet to do the publicatinon requirement. You just can't legally do business until you do so BUT it doesn't give a deadline.

In the UK, if you want to close a company you must do the same (pay ~£300 to post notice in a paper that your company is closing).

I think the idea is that anyone who the company owes money to can file a claim before any remaining funds are distributed.

Of course there are much better and more cost-effective ways of doing this (even pre-internet). It’s just absurd rent-seeking by unproductive leeches on the economy as far as I can tell.

It's not a notice in just a paper. It's a notice in the paper of public record. Which in the UK is the London Gazette, that you are almost certainly never going to see in a newsagents. There are laws requiring notices in that publication, and IIRC it's still government owned.

They publish notice of all laws, all insolvencies, all changes of name, new holder of certain public offices etc. I don't think there is any news or anything beyond the UK.

I bet it would be 5x more if you had to take out an ad in the Times or Telegraph. :)

Every episode of “Nathan for You” is amazing. The episode about this phenomenon is no exception. “The Diarrhea Times”...lol

Link to a preview of the episode: https://www.youtube.com/watch?v=LU1U2Eyep_4

Maybe I'm missing something obvious, but why can't you just call up the newspapers directly and list whatever it is that the law requires?

You can do it cheaper through a publication company, because they've already negotiated rates with the publishers. Though $1000 seems excessive. In Westchester County, I paid $300. There is a large spread in fees that will be charged.

I wrote to my state assembly person; she wrote back saying A8125 was introduced to repeal the requirement, but no action taken. I would encourage you to write to your assembly person and senator, because this is just a drag on NY businesses.

2017-2018 A8125 https://www.nysenate.gov/legislation/bills/2017/a8125

Unfortunately the numbers are year specific.

The newspapers will charge you to run the ad. They have no reason to print that info for free.

Of course, but surely that aren't going to charge you anywhere near $1000.

”unless I pay them $1000 to publish the name of my LLC in two public newspapers for six weeks, one daily newspaper and one weekly newspaper”

Reading that as “one daily newspaper and one weekly newspaper”, that would be 6 (weeks) times at least (6 + 1) = 42 adverts in a newspaper (I can also read it as “2 public, one daily and one weekly”. That would increase the number of adverts). Price per advert would be about $25.

I guess most LLCs get incorporated in an at least somewhat large city, so the circulation of the paper will be somewhat high. $25 per advert then doesn’t sound that bad to me.

I know zilch of advertising prices, though, so let’s google it. Reading https://fitsmallbusiness.com/newspaper-advertising-costs/ (a link that google gave me, but that I don’t know the quality of), I see the price per “column inch” go down from about €18 to about €13 when you advertise more often.

⇒ it could well be that $1,000 is a fair price, giving the higher price you would have to pay and the amount of work you would have to do if you did it alone.

(Still seems a weird law, though. I can imagine that one should give people to object if your company will be noisy, stinky, or the like, but then, the city, IMO, should require a permit)

I think the law made sense in the past so that the formation of a company would be well-known and not a secret. Now that everything is available online, less so. That the publication servicing companies know you exist, advertise directly to you because of that, and need no other information than your payment to do the publication is proof that the law is no longer useful.

I think part of it is the assumption that affected citizens (who might object to the new shop/cafe/…) are more likely to read such papers than government publications.

That likely still is true, but less so (fewer people subscribe to papers), and the assumption that people who read the paper would spot your advert probably only held back in the time when papers had reasonably small coverage (so that your advert wouldn’t appear in a large section of the paper, but stand on its own), and were about the only source of news (which made them much better read)

I wonder how many laws/rules there are, that made sense long time ago but not anymore, or those that never made sense to begin with.

Running for office on a platform of "removing useless laws" has been a dream of mine since childhood.

Maybe I'm totally wrong here, but I don't see much of a difference between extorsionist tax filing software and scam callers warning me about the IRS suing me.

Can the government please make something that's easy to use? Filing taxes isn't something that requires a separate company to help with, and I see no reason why these products have a right to exist (and especially not be canonized), especially with how exploitive they are or can be.

> I see no reason why these products have a right to exist (and especially not be canonized), especially with how exploitive they are or can be.

But if we remove the annual pain of dealing with taxes, then Americans will get complacent and may stop being bothered by having to pay taxes.

- The serious ideology of a major American political party vis-a-vis taxes.

I sort of agree with the pain guys. I'm currently self employed (US) and have to separately pay estimated taxes quarterly. Since I've been doing this, I'm a lot more sensitive to politicians who want to raise my taxes.

Similarly, there is a group in the US whose main goal is to change the law so that employers can't pay your taxes on your behalf. Instead, you would get your full salary, and then have to write a check to pay your taxes. The group believes this would raise tax awareness.

I'm just imagining applying this principle more broadly. Perhaps before every meal I could be forced to calculate the number of calories in each item, total them up and submit them. Maybe before every car journey I could fill out an estimate of the wear and tear on the tyres, gearbox and suspension, and record that in a big log book of car events.

Doesn't seem like a particularly useful way to approach life, to me.

The technique is actually used a lot in diets and budgeting. Manually writing down everything you pay for helps you to notice that taxi you take every day or how often you "splurge" for coffee. Same with calories and that afternoon or midnight snack.

But forcing it just wastes everyones time, adds red tape, and additional bureaucracy they purport to rail against.

> Perhaps before every meal I could be forced to calculate the number of calories in each item, total them up and submit them.

That's called Weight Watchers. The general principle was pretty effective for me. Most people don't keep a log of wear and tear on their car, but we definitely operate airplanes that way. That also seems pretty productive to me.

But yeah, it's not the only way to operate. I don't really like the idea of putting more responsibility on people in order to "raise awareness". I take that to really mean someone would like everyone to be more upset about taxes, and would like to make them less convenient to increase upsetness.

I don't understand why the pain of filing is connected to the pain of spending money.

If a politician raises taxes, and all it does is change the value of a annual withdrawal on your account, I think that pain would be the same, regardless of difficulty of filing.

The pain is estimating and filing 4 times a year.

Here in the US there are actually individuals who view their IRS tax refund check that they get back each year from filing their taxes as "getting free money from the government".

They simply do not understand the fact that, no, that check is not "free government money" but is instead money that the government took, held onto for free all year, interest free, and then let you have back after you filed the proper forms.

So the suggestions to have people cut checks to the government (quarterly, monthly, annually) is generally made from trying to overcome that viewpoint that too many folks view their tax return as some form of "gift" from the government, and instead get them to recognize just how much tax money is being consumed.

I am not denying your experience, but I am from the US and this is not my experience at all. It's called a "refund".

Which individuals? How do you know these people?

Also I don't agree with your perspective on tax withholding. If you don't want your employer to withhold taxes, I think they have to stop withholding taxes. It's a convenient default, in my opinion.

Conversely, on my property tax they itemize where the money goes. Presumably showing what I'm getting for my tax money. Or maybe just making me angry how much local schools cost if I don't have kids? (that was the vibe I got when living in FL)

I appreciate transparency like that, but I hate other examples that add additional steps or paperwork to the process.

That sentiment makes sense to me. Investing in real schooling makes a lot more sense, though.

I understand where their coming from, but adding useless paperwork just inhibits business growth. I'm more sympathetic to writing a check, like you say, but people are horrible with budgeting--which is why you pre-pay quarterly instead of just paying a lump sum at the end of the year.

I've often heard (and like) the suggestion that this annual payment be due the week before Election Day.

That'd be interesting!

I suggest we stop taking taxes out of paychecks and have people pay their full taxes once a year. It would help them see the total amount of taxes they pay. It would have a positive effect on government policy.

It used to be that way in France until last year. The income taxes are now substracted directly on your paycheck. I personnaly prefer having a small amout taken each month than an enormous sum as a one-time payment.

Can we do the same with health insurance premiums? The average cost of an employer plan is up to $20,000+/year in premiums alone but most people are oblivious to the true cost.

Your idea is great for people who make good money and are able to set aside money into a savings account.

But it doesn't work for low-income people that are already living paycheck-to-paycheck.

You can set your withholding to nothing and end up with a fat bill every year. Financially, this makes sense. You could be making interest on the money you owe in taxes. However, not everyone is really able to be that disciplined or just financially need every dollar coming in. I think having both options, withholding and no withholding, is the best way.

FYI, if you do this you will incur penalties. The United States requires payment quarterly. You cannot pay it all at the end of the year unless you want to pay penalties.

This is bad advice for many people. Depending on your income you might be subject to penalties if you don't withhold or pay estimated taxes: https://www.irs.gov/businesses/small-businesses-self-employe...

You can already see this on your pay stub (if you look at it, I know I don't bother with mine)

In principle I like your suggestion but in actuality I think many Americans will not like their "yearly tax bill." Just think about people who are already living paycheck to paycheck; not saving much, or just overall spending every penny that comes into their bank account. They would be in trouble come April if they had to pay it at that point.

Perhaps they could do a monthly installment payment for last year's taxes... And the taxpayer would auto pay once or twice a month when they get paid... But then, we're back to where we started.

Tldr in an ideal world where every citizen is disciplined about not spending every penny they get, this suggestion would be great.

...in an ideal world, they wouldn't have to spend every penny, either.

I would argue in an ideal world money wouldn't exist but I think people have different ideals in that sense :)

I know some people _have_ to spend every penny because they need to to survive, but there are also plenty of people who spend every penny because they just have no discipline and buy anything they want without regard to whether or not they could afford it. Ideally the people in the former category would get some sort of welfare. Not sure what, if anything, to do with the people in the latter.

You live paycheck to paycheck and still ineligible for income tax exemptions? Seems like a pretty USA-specific issue.

This. It is a special combination of sadistic and stupid, an American classic.

I'm skeptical. I think more likely its an intentional diversion to create and protect sophisticated loopholes for high income earners and companies. Its a reasonable strategy that obviously works and clearly explains their otherwise contradictory position.

Porqúe no los dos? One thing I've learned about American politics is that if there's a sadistic answer that screws the poor and a greedy answer that advantages the rich, often _both_ are correct.

While sadism and stupidity may be two of the reasons for the US tax code, there are surely others. I also suggest extending special privileges to the rich without making that obvious to the poor, forging a weapon to use against political enemies, creating a huge number of bureaucratic jobs, benefiting a legislator's constituent state at the expense of the others, obfuscating the sources of government revenues, and as a means to launder dirty money into clean. There are almost certainly others.

Tax lobbyists like Intuit benefit too much from all of this really. Planet money podcast episode that outlines some of this.


Also Reply All did an episode recently on the Propublica Intuit story.


How many pages of the supposed eight thousand plus pages of tax law apply to the majority of those who file taxes? The IRS certainly can tell me when I am wrong but they won't do it except when the result is in their favor; in my case I was improperly not filing HSA expenditures which would have resulted in me getting more back.

It comes down to this and I do not blame Turbo Tax or any other company in this area. The Federal and State Tax codes are weaponized by politicians and until that stops the system will be too complex for many to do the the filing on their own and some of that is because there is always that "did I forget something" feeling.

At least the changes made recently helped the lower and middle classes out a lot, that doubling of the personal deduction was a god send in reducing the work needed as many will never need to itemize again

> The IRS certainly can tell me when I am wrong but they won't do it except when the result is in their favor

Yes they will. I don't know why you bother to make up a lie so easily disproved.

On September 9, 2019, I received a CP16 that stated

"We believe there are miscalculations on your 2018 Form 1040, which affect the following areas of your return:

- Tax Computation

We made changes to your return that correct these errors. As a result, your overpayment is $21,886.35.

Information was changed because of the following:

We changed the amount of tax reported on your tax return because the tax rates on Qualified Dividends and Capital Gains are generally lower than the standard rates. It appears your tax was not computed using these rates or the amount of tax was computed incorrectly. (211D)"

Holy shit talk about a humble brag. You overpaid by $21k? You must be balling.

At a 15% rate, that's only 140k in capital gains. Significant, but hardly "balling" if it's a one-time event.

USA minimum wage is $7.25/hr which is only $15K/year if you work full time, and we've got people that will refer to 140K and prepend it with "only".

What world do you live in where $140k in gains on an investment is not a huge amount of money?

Silicon Valley... Would it be nice to have an extra $140k? Yeah. Would it be life changing in any way? Not really. I still wouldn't even be able to afford to buy a house.

I've gotten refund checks that were bigger than I expected, along with a letter saying that their math says I was owed more than I thought I was.

I would sure as fuck would blame TurboTax, assuming you filed with them. Why else would you (be forced to) pay them if they can't perform their primary function of navigating overly complex tax law correctly?

Filing taxes does not actually require a separate company to help with. You can download the PDFs (or go to the post office), read the directions and fill them out yourself.

I have never actually done that; but my parents did well after I was using software, which sure is more convenient.

I used to do that. Because I'm a proud software engineer and why should this stuff be complicated? It's just numbers you add or subtract...

wait, does the Transmogrifier Deduction for Frobnubilors apply when you claim to be Single-and-Only Highlander? pauses and takes 1 hour to read up on the IRS rules for this and compares with the advice of $random_internet_guy

And after the personal satisfaction of having completed everything myself, I file and a few months later get a letter from the IRS to the effect of "Dear Mr Bonehead, you totally forgot this obvious item, so we're going to refund you a bit more. You're welcome."

Taxes are not hard if you know how all of the rules apply to your special situation. If you don't, like most people, you're in the dark and it becomes a very poor use of time, with lost money at stake—or worse if your intentions are deemed to be fraudulent.

One of the problems I have with the software is you need to mostly understand a lot of this arcana anyway. It's just that it makes entering things into the form slightly easier.

The only time I didn't do my own taxes and paid a CPA, he messed up even though I told him that I withheld more than required (and gave him last year's return so he could see what last year's taxes were and that I had more than 110% withheld).

He still filled the form out wrong so that I would have had to pay a penalty. Then when I told him he filled it out wrong, he just took the penalty off, without properly updating the 1040. When I ended up getting the inevitable "you owe us a penalty letter", I just ended up dealing with it myself rather than use his boneheaded explanation basically "pretty please" as opposed to the actual "I made more money, and withheld enough more money, so penalties are waived."

Honestly, the IRS makes these kind of questions pretty much impossible.

For example, I've been considering installing solar panels on my house. There is a federal tax credit for installing solar, and it includes associated costs like repairing your roof to support the panels. But as a normal person the entirety of the guidance is this:

"No costs relating to a solar panel or other property installed as a roof (or portion thereof) will fail to qualify solely because the property constitutes a structural component of the structure on which it is installed."

So if you get a new roof to support the panels will the tax credit cover the entire roof job, or only the part covered by the panels? I've heard from two accountants on this who had two diametrically opposed opinions on this. And if I guess wrong it's potentially Felony Tax Fraud, the kind that put Al Capone in jail for 11 years. Ignorance of the law is no excuse.

So I call the IRS help line to get the official guidance on this and the official IRS position is: "We can not give guidance on this subject." It's not like TurboTax is going to have any more official of an opinion on this either. The only way to safely handle this is to pass liability off to a third party, which makes filling out your own taxes not an option.

Do you think that Al Capone was imprisoned for making an honest mistake on his tax return after receiving conflicting advice from two accountants?

I did this for the first time a few years ago, and it took me about eighteen hours to figure out all of the forms and terminology. And I'm not even running a business, or anything extra-ordinarily complicated. So possible, but time-consuming.

I think if you make under $70k or so you can do it online as well, there's a few sites that officially help you on behalf of the IRS.

Like TurboTax?

Turbotax appears to have one of the lower limits, and also are supposedly very difficult about doing the free option.


My point was more that these companies offer a solution that is just barely workable so that the IRS does not just create their own usable, free software. I honestly consider them a leech on the economy.

I use the free fillable forms. Happy with it every year so far. If turbo tax makes them go away, I'll get real politically involved real quick.

A private company stills gets your data. You are not filling directly with the IRS.

> Can the government please make something that's easy to use?

Many law makers don't want the Government to make this process easy on the assumption that the easier it is for the Government to tax, the more it will do so.

I find it interesting that these scam callers warning about IRS suing only works in countries where making an honest mistake on your taxes can result you being threatened with or going to prison.

Which countries are those? I've never been in the position personally, but everything I've ever read says that the IRS is very unlikely to do anything more than demand that you pay the taxes you owe in the case of honest mistakes.

> Can the government please make something that's easy to use?

To be frank, the government has issues making things usable, and "usable" is a pretty small target when you're talking about the entire US workforce.

18F has really changed the game in government IT and software. https://18f.gsa.gov/

They brought in a bunch of dedicated experienced software pros who among other things rescued the federal health insurance exchange site.

I think they could do a fine job with tax software.

Thanks Obama

One of the best sites to 'do stuff' in the UK is gov.uk

I've just filled in a new ESTA application on the US gov site too, simple (albeit stupid), and worked.

This morning however I tried using enterprise b2b to book a hire car, it took 6 attempts before it actually worked. Almost all corporate tools seem to be terrible.

The government has issues holding private companies accountable when they fail to deliver.

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