[esturk]

It occurred to me the other day that if someone owes unpaid taxes, it is probably cheaper to wait for the IRS to send you an unpaid bill than to pay Turbo Tax. According to the IRS collection procedure [1], the interest on the unpaid amount is only 3% and the penalty is 0.5% per month. Unless the owed amount is really high, exceeding 10,000$, the bill due is still less than what they would pay for service at Turbo Tax which costs over 100$ easily nowadays.

[1] https://www.irs.gov/faqs/irs-procedures/collection-procedura...

[Johnny555]

If you have a simple return with no forms or schedules, then you can file for free at Turbo Tax.

If you have a more complicated return that requires the paid Turbotax software, then when the IRS computes what you owe, it's likely to be a higher number than what you'd calculate with TurboTax, since the IRS isn't going to deduct itemized expenses, business expenses, etc from your income.

[IncRnd]

> If you have a simple return with no forms or schedules, then you can file for free at Turbo Tax.

If you owe more than $10,000, you probably aren't eligible for the free filing at Turbotax. [1]

[1] https://turbotax.intuit.com/modals/dynamic/?instance=c7YON5P...

[jliptzin]

No, you let the amount accumulate over a decade until it gets so high until you call one of those late night infomercials and end up settling with the IRS for 10% of the bill.

[kccqzy]

> the interest on the unpaid amount is only 3%

No it's 3% plus the federal short-term rate. It's 7% right now.

https://www.irs.gov/newsroom/interest-rates-remain-the-same-...

[STM32F030R8]

As others have said, it’s now 7%. I’ve also gotten the bill 2 YEARS LATER! That’s two years of interest added. It still took another year to resolve it bc it’s quite literally impossible to call the IRS and the only way I could communicate was over fax with months long delays lol. So trust me you don’t want to go that route. Btw why are people paying for turbo tax???? For years I’ve been using free services such as credit karma tax (now cash app) which allow me to file complex forms like schedule C and stuff all for free. If you’re paying for anything it better be a CPA not TurboTax lol.

[liveoneggs]

they wait ages to bill you. I had a pretty minor mistake once and got billed two years (iirc) later so interest was high.

[Hello71]

that's basically equivalent to the official option to have the IRS figure your tax (https://www.irs.gov/faqs/irs-procedures/general-procedural-q...), except your implementation also pays a bunch of penalties ("5% of the unpaid taxes for each month or part of a month that a tax return is late, [up to] 25% of your unpaid taxes").

[pclmulqdq]

File for an extension, then check the W-2s and 1099s they have. You can actually do this on the IRS website about a month or so after the deadline. That's what my accountant does.

[zaphirplane]

What if u over inflate all the income numbers. Basically increase you tax, they will fix it for you to be accurate ?

[newjersey]

If you claimed you got USD 10 million in bribes, how would the IRS verify that you actually got the money? It isn’t like the people giving you bribes will claim that as an expense… actually I’m not sure how it works.

If you own a restaurant and let’s say you bought a kilogram of tomatoes for a dollar and it spoiled but you don’t claim it as a loss. How can the IRS know this automatically and refund you?

I mean I agree they can for simple people like me who just have a w2 though…

[jldugger]

> the interest on the unpaid amount is only 3%

You might want to read that bit again.