This announcement is not about the IRS pre-filling income tax returns, a topic that is discussed regularly on HN.
This is about handling all the other activities surrounding tax filing, such as getting copies of 3rd-party information returns (W-2s, 1099-Rs, etc), receiving and responding to notices regarding errors or questions in the previously filed tax return, etc.
California FTB (tax agency) set up an online system for taxpayers starting five or more years ago, with continuing enhancements since then. IRS is just now catching up, by providing the ability for a taxpayer (or tax practitioner with permission) to create a secure login account with access to their personal information.
>Taxpayers will be able to digitally submit all correspondence, non-tax forms, and responses to notices;
Nice! I had to reply to a notice last year, and fortunately, I was able to respond to it "digitally", but only via a workaround: since one accepted medium is fax, I used an e-fax service to send the response.[1] It definitely felt like there had to be a better way.
I think it is intentional that governments, especially bigger ones like state and federal, make on the record communication with them more difficult. I have called government offices many times only to receive a message that says “call back the next business day”..at 10AM. No way to submit an email, or even a simple call back function.
No, you have to spend hours of your time trying to reach them, and the only way this makes sense is if they want to make some people give up.
The only advice for this is to contact a politician and hope they take up your personal cause. Basically, what you would expect in a poor, developing country, except there, at least it is known how much you need to bribe someone to get service.
They currently don't allow individuals to e-file unless they either:
1. Acquire commercial software, or;
2. Hire a paid preparer to file it, or;
3. Use "Free File Fillable Forms" (but this isn't an option if you fall into one of the numerous special cases that it doesn't support)
So, basically, mailing in a paper return is the only free option for some people (myself included).
I genuinely don't understand why paid preparers can e-file directly with the IRS, but individuals can't. There's nothing in the linked article that says this will change, so if they go ahead and ban paper filing in a couple years, I'm not sure what options are left for people like me.
Yes, I can easily afford to shell out for software or a paid preparer if I really have to, but I'm very much against doing this on principle, since the whole tax prep industry in the US is a huge rent-seeking racket.
Correct me if I’m wrong, but my understanding is that paid preparers can only e file if they are using a commercial software package that supports it such as Lacerte.
This would be a godsend! I'm not sure of its applicability to non-resident aliens yet, but having to mail the documents has been a really slow process. They don't open them even after two months of receiving them, and then take another few weeks to process.
Going digital would at least alleviate the fears of having submitted the returns on time, since otherwise IRS doesn't acknowledge them receiving on/before time.
will this allow me to digitally file my amended federal taxes? That's the one thing that I was looking forward to when I started reading this and possible may impact most taxpayers but looks like IRS still needs amended tax returns in a paper form being mailed out to them?
Filing amended returns electronically with the IRS (efile) has been available for several years. The ability to catch up with unfiled prior year returns by efiling has been available for even longer. (IOW, you can efile your unfiled 2021 tax return in 2023).
How about this: let’s go to a single flat rate for everyone and everything (say 20%) and eliminate all deductions except for a standard deduction (say whatever is the poverty line, eg $25000 or so). This would be for corporations and individuals.
Now your taxes can be filed on a postcard. And the IRS can preprint it and send it to you, with an online code or something to click “ok” on a web site and be done.
The government uses the tax code like a Swiss Army knife, trying to reward friends, punish enemies, encourage and discourage behaviors, etc. As a result we collectively spend millions of person hours and untold $$$ paying accountants to find and exploit loopholes and try and avoid undue attention.
Sounds great, except a flat tax rate is extremely regressive so you either tank the amount of tax revenue the government collects, or you punish low income earners far more than wealthy individuals.
What about business deductions, or are you okay with low-margin businesses being forced to evaporate overnight? And what about all the charities that suddenly get vastly less donations because they're no longer deductible? Also as the other comment notes, that's either a drastic cut to revenue, or incredibly regressive on lower-income earners.
Taxes are more complicated than they need to be, but they're also complicated because the world is complicated.
So how would the government now incentivize things it wants and disincentives things it doesn't want?
Most recently I improved insulation at my house. I was surprised to see an IRS form that gives me tax advantages for making my home more energy efficient. How would the government now do this?
The marginal tax brackets are not what makes our tax system complicated. You can write them on a single page.
It's all the deductions and exemptions and carve outs. It's important to have higher rates on higher income earners to put pressure against income in equality.
The article is primarily about processing documents other than actual income tax returns. Does the U.K. have a completely digital (paperless) way of communicating with taxpayers and resolving issues after the tax return is filed?
The U.S. has had "online tax returns" (e-file) since the 1990s. Paid tax preparers are mandated to efile, it is only the minority of DIY taxpayers who insist on paper filing their income tax returns.
[+] [-] PopAlongKid|2 years ago|reply
This is about handling all the other activities surrounding tax filing, such as getting copies of 3rd-party information returns (W-2s, 1099-Rs, etc), receiving and responding to notices regarding errors or questions in the previously filed tax return, etc.
California FTB (tax agency) set up an online system for taxpayers starting five or more years ago, with continuing enhancements since then. IRS is just now catching up, by providing the ability for a taxpayer (or tax practitioner with permission) to create a secure login account with access to their personal information.
[+] [-] kasperni|2 years ago|reply
I hope TurboTax and friends doesn't manage to screw this one up.
[+] [-] deprecative|2 years ago|reply
[+] [-] y-curious|2 years ago|reply
[+] [-] toomuchtodo|2 years ago|reply
[+] [-] SilasX|2 years ago|reply
Nice! I had to reply to a notice last year, and fortunately, I was able to respond to it "digitally", but only via a workaround: since one accepted medium is fax, I used an e-fax service to send the response.[1] It definitely felt like there had to be a better way.
[1] Shout-out to faxrocket, featured on HN: https://news.ycombinator.com/item?id=15484390
[+] [-] lotsofpulp|2 years ago|reply
I think it is intentional that governments, especially bigger ones like state and federal, make on the record communication with them more difficult. I have called government offices many times only to receive a message that says “call back the next business day”..at 10AM. No way to submit an email, or even a simple call back function.
No, you have to spend hours of your time trying to reach them, and the only way this makes sense is if they want to make some people give up.
The only advice for this is to contact a politician and hope they take up your personal cause. Basically, what you would expect in a poor, developing country, except there, at least it is known how much you need to bribe someone to get service.
[+] [-] NickM|2 years ago|reply
1. Acquire commercial software, or; 2. Hire a paid preparer to file it, or; 3. Use "Free File Fillable Forms" (but this isn't an option if you fall into one of the numerous special cases that it doesn't support)
So, basically, mailing in a paper return is the only free option for some people (myself included).
I genuinely don't understand why paid preparers can e-file directly with the IRS, but individuals can't. There's nothing in the linked article that says this will change, so if they go ahead and ban paper filing in a couple years, I'm not sure what options are left for people like me.
Yes, I can easily afford to shell out for software or a paid preparer if I really have to, but I'm very much against doing this on principle, since the whole tax prep industry in the US is a huge rent-seeking racket.
[+] [-] noodlesUK|2 years ago|reply
[+] [-] toomuchtodo|2 years ago|reply
[+] [-] supportengineer|2 years ago|reply
[+] [-] abhayhegde|2 years ago|reply
Going digital would at least alleviate the fears of having submitted the returns on time, since otherwise IRS doesn't acknowledge them receiving on/before time.
[+] [-] gordon_freeman|2 years ago|reply
[+] [-] PopAlongKid|2 years ago|reply
[+] [-] SparkyMcUnicorn|2 years ago|reply
[+] [-] efitz|2 years ago|reply
Now your taxes can be filed on a postcard. And the IRS can preprint it and send it to you, with an online code or something to click “ok” on a web site and be done.
The government uses the tax code like a Swiss Army knife, trying to reward friends, punish enemies, encourage and discourage behaviors, etc. As a result we collectively spend millions of person hours and untold $$$ paying accountants to find and exploit loopholes and try and avoid undue attention.
Let’s just stop.
[+] [-] halestock|2 years ago|reply
[+] [-] delecti|2 years ago|reply
Taxes are more complicated than they need to be, but they're also complicated because the world is complicated.
[+] [-] kccqzy|2 years ago|reply
Most recently I improved insulation at my house. I was surprised to see an IRS form that gives me tax advantages for making my home more energy efficient. How would the government now do this?
[+] [-] patmorgan23|2 years ago|reply
It's all the deductions and exemptions and carve outs. It's important to have higher rates on higher income earners to put pressure against income in equality.
[+] [-] Nexxius|2 years ago|reply
[+] [-] yetanotherloss|2 years ago|reply
[deleted]
[+] [-] siruncledrew|2 years ago|reply
[+] [-] progrus|2 years ago|reply
Why do this now?
[+] [-] forgotusername6|2 years ago|reply
[+] [-] PopAlongKid|2 years ago|reply
The U.S. has had "online tax returns" (e-file) since the 1990s. Paid tax preparers are mandated to efile, it is only the minority of DIY taxpayers who insist on paper filing their income tax returns.
[+] [-] khuey|2 years ago|reply
[+] [-] unknown|2 years ago|reply
[deleted]