> The IRS themselves need to provide this "auto tax" service.

Interestingly, they now can: under the Free File program, tax prep companies would offer free filing (for taxpayers below 72k AGI) and the IRS would not compete with their service.

After a ProPublica investigation in their dark pattern shenanigans (leading to about 3.5% of taxpayers to use the program when 70% are eligible) confirmed by the HSGA Senate Committee and NYS DFS, the IRS both updated its rule to preclude e.g. hiding Free File programs for search engine, and removed the rule which prevented them from competing.

Sadly the IRS has been hamstrung time and again by the GOP, both financially and politically. They can't even do their core jobs of collecting tax and auditing the taxpayers they need to, so it's unlikely they'll have the clout and funds to set up a free filing program any time soon, let alone one properly integrated with their likely antiquated and in dire need of updates computer systems.

> the GOP

We now have an opportunity to test your hypothesis- for at least two years there will be single party rule by the other party.

Single party rule would be true only if the Senate was not encumbered by the filibuster.

I sometimes feel surreal that US Congress people get paid to professionally kill time.

While true it's not too often that filibusterers actually happen. The threat of doing it is usually enough to kill a vote.

And Senate Majority Leader Joe Manchin has stated that he is unequivocally against removing the filibuster.

Chuck Schumer is the Senate Majority Leader.

Joe Manchin can thwart or shape any legislation that has only Democrat support, which is a large amount of de facto power to wield, hence the joke.

That’s the joke

That might be a notion too drenched in game theory.

The filibuster itself is not some sort of switch that gets flipped. The parties need to be careful how often they use it and for which reasons. It's just a part of the procedural possibilities and its effectiveness is not some sort of set-in-stone rule.

In our particular case right now, the reason the Senate does not allow us single-party rule is due to the makeup of the senators themselves. It only takes a few to not vote down the party line to negate single-party rule. We've seen this a few times already since the start of the new administration.

This is incredibly naive of the current way the filibuster is employed. There is no care in how it's used because the line in the sand has gone from "did you vote on bill" to "did you block bill from being voted on" for attack ads. How can you say we're "careful" when it's tripled in usage.

https://www.americanprogress.org/issues/democracy/reports/20...

The current reason we care about a few senators is because we are looking at budget reconciliation where you only need 50 votes. Outside of that you need 60 votes or you get filibustered.

Your own article proves my very point:

> Note that, in some cases, filibustered bills were eventually passed but with substantial concessions to the senators blocking the original bill.

We have clearly seen over the past many decades an evolution in the kinds of bills we pass, and I think it's quite easy to observe that controversial bills are front-loaded specifically to combat this. The negotiations have changed to meet the needs of the new battlefield.

Perhaps this is "naive," of me but the kinds of bills the Senate has passed recently have me surprised its use has only gone up 3x.

I can find no way to read this comment generously.

Your original point was that use of the fillibuster was judicious. The article goes on, at length, about exactly how the use of the fillibuster has only substantially increased over time.

And then here you plucked out a single sentence from the article used as a good-faith caveat before presenting data to say the article "proved your point."

The majority party can remove the filibuster rule anytime it likes, as they have done for several special cases in recent years.

The current majority party has just enough DINOs to prevent that from happening.

It might look that way to you but it's not that way. Two Democrats in the Senate are against almost every progressive idea (IMHO). Even if all of the Democrats except for those two want something they have to convince a couple of Republicans to go their way. Those 2 sensare basically the most powerful people in the Senate.

That part of the Senate is working as it was designed.*

Those two Senators are from more conservative states and they know if they don't toe the line their constituents will likely throw them out for GOP alternatives.

*In fact, the Senate was originally appointed by each state's legislators and the House was the only Congress elected by popular vote.

Who’s the other one, Synema?

yes, Sen Sinema (I had to look up that tough spelling...)

I love it when people still have faith in either party cleaning up the tax code (aka reducing the size of government). Ain't happening.

> I love it when people still have faith in either party cleaning up the tax code (aka reducing the size of government).

“Cleaning up the tax code” and “reducing the size of government" aren't really the same thing; the former could very easily serve the opposite purpose of the latter.

But it would put some people in the tax department out of work, so even if hypothetically a more efficient tax scheme would let you grow the government as a whole, the current people in the tax department have an incentive to not let that happen.

> But it would put some people in the tax department out of work

Or, not; alternatively, it would allow the IRS to be more responsive in its supportive activities and more effective in its enforcement activities.

Cutting staff is a separate decision from streamlining the rules; the IRS hasn't had staffing expanded to keep workload constant when we weren't simplifying, there is no inherent reason it would ha r to cut staff and keep workload constant if we were simplifying.

Ah yes, the Democrats, who will do nothing because:

- Many of them will virtue signal on Twitter but are uninterested in actually challenging oppressive power structures as they exist.

- They have the slimmest of majorities, requiring either bipartisan support (lol) or the support of “moderate Democrats” whose positions are at best center-right. Republicans were in this position for the first two years of Trump, and they couldn’t get any signature legislative achievements but their tax bill passed. The same is likely to be true for Democrats this time around (a watered down stimulus bill passed through budget reconciliation).

- The American system of government is a vetocracy that leads to resentment over government’s inability to govern/keep promises made when campaigning.

- The complication of being beholden to corporate cash. Great ROI for Intuit and every other company that benefits from nothing substantially changing in America. Being beholden to corporate cash is the strongest form of bipartisanship in America.

Would the time until October 2022 be a conclusive test? There are many priorities and limited amount of legislative time. It’s very possible that no laws are passed with respect to the IRS, not because of a lack of desire or unwillingness to change, but because of lack of time and competing issues.

except the power the D's have in the senate is more about setting agenda since the vast majority of things they need to pass requires more than just a simple majority that they have.

We have this in South Africa. It was always easy to do your taxes before, but since last year they do what they call an "Auto assessment". The South African Revenue Service collects all the documents they need (payslips, medical aid, pension etc.) from the respective organizations, fills out the tax form for you, and lets you know it's ready.

I logged in to check that they did it correctly, which they did, and approved it. Literally took ten minutes. Nine of which were just reviewing all the fields on the form.

Obviously this does not work for people who have very complex/unusual tax situations, but for your average person it's great.

Same here in mexico. Its wonderful to file my taxes because i only login into SAT website, check the prefilled data, click accept and I get my tax refunds due to my mortgage credit.

It blows my mind that The USA doesn't have something like this. It's basically taxes at work

They don't simply collect all "documents" they need. They hoover up the data directly from various institutions. Your employer being one, your bank another, your medical aid, etc. Not only that, but they're getting involved with the IRS now via FATCA. It's actually awesome that they're probably doing a better job than the government itself when it comes to having an all-encompassing view of the tax-cattle that they oversee.

Oh, I am under no illusions that this was not a pursuit of excellence, but rather a way to make sure they get as much tax money as possible. Considering how 90% of all other government services are complete garbage.

But I still believe that paying taxes is the right thing to do (how else do you keep a country running, even a corrupt one?). And as someone who really hates doing any kind of admin, this was a breath of fresh air, and highly appreciated, even if their motives are not perfect.

The tax prep industry lobbied Congress to prevent the IRS from auto-tax filing. The compromise was "free filing" for those with median incomes and below. For a majority, W2s, 1099s and the previous years return can provide an auto-filing framework. The IRS would send your their draft and you agree or modify. Other countries do this.

If I saw a proposal to make tax codes simpler, have people file taxes with a good app provided by the IRS etc and then I saw a politician vote against it, while being funded by companies benefiting from the status quo...

I'd just not vote for that person again.

Such a proposal can be killed at various steps before it gets to a floor vote.

It’s part of why Mitch McConnell was majority leader; he isn’t necessarily well liked, but he is willing to take the heat for not taking up a bill and letting his colleagues avoid awkward votes.

While many people are "single issue voters" [1] it's not too often that someone would vote for an otherwise worse candidate over $50-100/yr tax prep bill.

[1] I hate this term but it's the one that caught on. Almost no one votes positively based on a single issue but many people have disqualifying issues which people treat as the same thing. "Sure they're pro baby eating but their stance on taxes is really quite progressive."

This is 99.9% of politicians.

Voters get the politicians they deserve. In some systems it's easier to be corrupt. IIif there are only 2 major parties so you don't need to good just better than the other guy, or if politicians are funding their own campaigns so you are indebted to sponsors and companies before you are even elected.

But voters are also responsible for those systems being in place.

Having the IRS make a tax estimate that you may then contest is very different than making your own tax estimate that the IRS could then contest. Proposals such as this dramatically shifts power towards the IRS.

Ideally there would be a "tax dashboard" on the IRS site where you could log in and see your (YTD): - Income reported - Taxes paid - Tax credits and deductions - Expected balance (+/-)

Then at the end of the year, you'd log in and click one button to verify the numbers and either pay or get a check.

That is essentially how we file our taxes in Norway. You don't really have to login to verify the numbers, only if the numbers (that the government calculates for you) needs revision

My employer didn’t send me a W2 this year which caused me to seek another method to access this information. I created an account on irs.gov and was surprised to find a single PDF for each tax year containing W2’s, 1099Ints, 1099Divs that I assume were given to the IRS on my employers/bankers behalf.

Now it would be great for a tax program to ingest this PDF and auto-populate your tax return. Unfortunately no PDF for 2020 exists yet and it says it might not be available until October? I don’t know if generating this PDF is a slow process or if this information is intentionally withheld until after the tax filing date to make sure you are “honest” on your taxes.

you made me curious and I logged into the IRS to find those "transcripts". I really cannot tell if they generate that information from your own tax report or if they generate it from what they already got in their own databases.

> Wage and Income Transcript - shows data from information returns we receive such as Forms W-2, 1099, 1098 and Form 5498, IRA Contribution Information. Current tax year information may not be complete until July. This transcript is available for up to 10 prior years using Get Transcript Online or Form 4506-T.

https://www.irs.gov/individuals/transcript-types-and-ways-to...

I grew up in France, our bureaucracy is pretty intense and old school. But they send you a nice little note with your W2 and how much you own them. If they missed anything you can amend their draft. Usually it take 15min to complete the whole yearly process. Even with some midly complicated situation like renting and being landlord, living between two countries, cryptos.

As noted in other comments here, an "auto tax" service only really works on the happy path. There are parts of the tax code which are highly subjective in more complex situations and require explicit elections on part of the filing party. These elections can have consequences far beyond the immediate tax filing transaction.

No, it can work with the complicated path too, they present you with what they already know about you and give you the opportunity to add more information that they don't yet know. They then calculate what you owe and tell you.

At some point they are going to calculate what you owe based on what you provide them and what is reported to them, no matter what.

Laws that authorize "auto tax" can also come with extra reporting requirements.

There is a much greater depth of detail that I provide to my tax preparer than I'd be willing to share with the IRS. I tell my tax preparer everything and have perfect confidence that my taxes will be prepared correctly and in accordance with the tax code and that nothing which is not required to be disclosed will be disclosed. Much of what I provide to my preparer is irrelevant to my tax obligations and anything that's irrelevant I would prefer not be disclosed.

I'm mostly a W-2 schmo without any particularly complex business arrangements and with a spouse who employs themself in a consulting capacity, puts the statutory maximum into tax-deferred accounts every year, and we have minor kids who are required to file returns due to kiddie tax laws.

I can imagine many people would rather pay a high three or low four-figure per year bill for tax prep and representation rather than give the IRS full access to their financial lives.

I do support (and strongly so) the idea that the IRS could provide simple, default tax prep based on the information they receive. Where I break is what escalation path should exist; I think there must remain an effective and private escalation path for more complex scenarios. (In many ways, that makes it even easier to implement. Make the simple case automated-by-default. Punt all the complex cases to the current system.)

May I ask examples of things that you are not confident sharing with the IRS, that you do not have the obligation to share with the IRS, and that can affect the taxes you owe? In my (foreign) mind, whatever might affect your obligation final number you are legally required to do so (either preemptively or when asked), so I don't fully understand.

Many things that I tell my preparer are needed later, but not now. (Tax basis for RSUs that vested. Value of capital improvements to my property.)

Other things are needed only if we elect to method A of calculation, but not if we use method B of calculation. So I give him all the data; he computes my obligations using method A and method B, chooses the better option, and reports only the data needed to support that method's calculations.

I pay my preparer to be an expert in tax code, to represent me in any audits, and incidentally to prepare my return correctly.

Part of that expertise is that I don't have to be an expert, so I tell him everything and he politely rolls his eyes and smiles when I dump irrelevant things on his desk.

You are making an argument for a simplified tax code and reporting system.

The not needed now but maybe later financials should already be reported by the financial institution to the tax agencies.

There should not exist a system where there is a method A, B or C and if you have thousands of dollars a tax accountant can find all the loop holes to make you pay the least. You should just pay what is owed, not more or less.

You wouldn't pay for tax preparation if the potential savings weren't more than what you pay him. With a simplified system there also wouldn't be much need for the audit help you are usually offered when using their assistant

Then let the government distribute this hypothetical preparation software as free software. It could therefore be verified that you're not telling the state more than you want them to know.

A tax preparer could presumably still help you make the decision about what information to share with the IRS. I guess they would be something else, but you get the point.

But isn’t it tax fraud if you consciously withhold information that would negatively impact on your total obligation?

There is a lot of financial information (which is private by default) which is irrelevant to a person’s current tax obligation.

That’s the information that I only want my paid advisor(s) to have; this is a privacy concern, not a cheat-on-taxes concern.

But if it is irrelevant why do you fear that you will need to provide it? I’m honestly at a loss. Do you mean something such as to whom do you send wire transfers, or which specific companies you have on your portfolio? Or more like having an account together with someone? Something else?

Why would I want to give private data which is irrelevant to the IRS to the IRS? I'm honestly at a loss as to why you think that position is unreasonable.

My data is my data. I truthfully and completely provide to people, companies, and government agencies who have a need to hold or process only that data is required.

I also have a group of advisors whom I trust entirely and I share data more openly so they can help me plan and execute better.

What specific positions (or even total account value) I hold in my various accounts is not required for the IRS to compute my taxes. My advisors on the other hand I willingly give that information so they can give me better advice/guidance.

My tax preparer knows what is required for the IRS and ensures they get that correctl, completely, and precisely nothing more. There's no way the IRS could find all the data that's relevant to my taxes without getting any not relevant data without some expert actor doing that filtering (and from a comparative advantage perspective, I want to pay someone more expert than me to do that)

Ok, that's interesting. I don't follow this:

> What specific positions (or even total account value) I hold in my various accounts is not required for the IRS to compute my taxes.

How can they compute your financial gains without knowing your portfolio changes? (sorry I'm not american and thus my preconceptions of how do you do taxes are weird for you).

I have always been troubled ever since I started receiving RSUs that the IRS doesn't already have access to the cost basis for vested RSUs, and I'm baffled that you wouldn't want them to have that information.

Fair point. I'd be somewhat comfortable with sharing that information earlier than they strictly require it.

But I think a better solution to the very real problem you've identified would be for your stock plan administrator to hold that information and transmit it to the IRS as basis information just like your retail broker now transmits basis for closed positions on a 1099-B, but only transmit it in the year the closing transaction happens.

If I vest RSUs this year and sell them in 2026, the IRS needs to know that basis in 2026, but they don't need to know it now (other than as it is already included in W-2 boxes 1 and 14, but that's only a dollar figure, not a per-share basis figure).

I don't think anyone here is advocating for a system where you cannot prepare your tax return privately. The problem is that private tax preparation corporations have lobbied to make an IRS system illegal.

> There is a much greater depth of detail that I provide to my tax preparer than I'd be willing to share with the IRS. I tell my tax preparer everything and have perfect confidence that my taxes will be prepared correctly and in accordance with the tax code and that nothing which is not required to be disclosed will be disclosed. Much of what I provide to my preparer is irrelevant to my tax obligations and anything that's irrelevant I would prefer not be disclosed.

Cool beans. Literally nothing preclude you using a tax prep service but using the IRS's tax declaration system, which would double up as a simple tax prep system.

That's what happens just about everywhere in Europe: you log in a dedicated government service, and you do your tax declaration. All the stuff the government knows about (salary, loan deductions, dependents, …) is already input, but nothing precludes drilling down and updating details. Nothing is lost compared to a paper declaration.

What is an example of something legal that you would be afraid of the IRS seeing?

I can't imagine any scenario that most people (anywhere close to fifty percent of tax payers) would be willing to lose a significant portion to all of their refund check by needing to pay a tax preparer potentially thousands of dollars.

Answered a sibling with a similar question: https://news.ycombinator.com/item?id=26333946

You do realize that $1k is about 10% of the median household income tax liability?

I can't imagine the majority of people happily accept a 10% (more for half of households) tax hike, when companies already CC the IRS on all the forms they're regurgitating.

This statistic I think is with respect to those that owe tax rather than for all households (it excludes 1/3rd of those that file returns):

"The most recent IRS data revealed that Americans who filed taxable returns paid an average income tax payment of $15,322 in 2018. This number was calculated based on the returns of over 153 million American households who filed during that period, which included just over 100 million taxable returns."

I'm actually fairly shocked that $10K is the median income tax liability given that a substantial percentage of households pay no net federal income tax.

It's probably median for households that pay any tax.

Also, don't forget the IRS has a quasi-adversarial relationship with you. You're trying to pay as little tax as legally allowed, they want you to pay more. They're not motivated to show you ways to pay less tax.

This is false. The IRS wants you to pay the amount calculated as due under the information they have available about your income.

The IRS is not motivated to collect more income or to deprive taxpayers of refunds. They're motivated to do their jobs, whether that means issuing a notice of amount due, or paying out a refund check (which they do for millions of taxpayers without issue, every year).

If I donate to a charity, it may reduce the tax I have to pay, especially my income is at the boundary between two tax brackets. Would IRS suggest such a donation in order to reduce the tax amount? Tax advisors do that all the time.

That's not how taxes work. Unless you would have donated to a charity anyway in a subsequent year, you never gain money on net from donating since your tax rate is marginal.

Even if you have super low income and you are on the border for benefits (EITC, Medicare), donating to a charity will not make you eligible for those benefits because that eligibility is determined by AGI, which is income before deductions.

The only situation which this makes sense on net is if you tell your tax advisor that you want to donate some amount of money over the next few years. Then the advisor might tell you to donate in high-earning years to offset a higher marginal rate. In the above proposed scheme, the IRS would only get one year's worth of data, so it cannot recommend you this type of tax avoidance.

There are scenarios in tax planning where expert advice can change the tax you owe by getting you to do something slightly different.

If you bunch deductions, you might alternate between the standard deduction and itemizing deductions, meaning if you want to support charities with $10K per year, you're better off to donate in Jan and Dec of the same year (itemizing), then skip 13 months (taking the standard deduction), then donate twice in the year after that (itemizing), etc. With the increased standard deduction, this may be needed to allow your donations to become deductible at all.

There are other planning strategies that a combined advisor and preparer can help with. (Using your HSA optimally as a retirement account. Optimizing your Roth conversions over the years. Modeling whether Backdoor Roth contributions make sense (or "what would you have to believe is true to have them make sense?") For business owners, setting the balance between your salary and distributions of profits.) Those are advice activities that overlap with a detailed understanding of your financial and tax situation and often mean that you have to change something about the structure or timing of your activity to accomplish your goal.

The IRS is in an OK position to look back and judge "based on what actually happened, here's what you owe", but in a terrible position to offer optimization advice.

>especially my income is at the boundary between two tax brackets

Wait, can you explain how tax brackets work because I think there may be a fundamental misunderstanding here.

If we have two brackets, 10% for <=$100 and 90% for >$100, what do you think the tax bill would be for someone who earned $101?

It would be $10.90.

$10 for the first bracket. The remaining untaxed income is $1, taxed at 90% = $0.90 tax.

But the Republican Party has spent a lot of money to make people think that the tax would be $90.90 (i.e,. a flat rate), which is why so many people are opposed to increasing the tax bracket rates...even though the actual affect is marginal to most people (even those affected).

The smartest person I know, idolized him since I was a kid, had that same misconception last year when we were discussing top end tax brackets.

I feel like every April news orgs should just run segments with accountants doing this example.

No, because the IRS is not in the business of advising taxpayers about their spending or earning, only about how to calculate the amount due based on what the taxpayers earned or spent over the previous year.

For example, if you fill out your form by hand and say that you owe X, using the single-filer rates but you're married and should have used the married-filer rates, the IRS will notice your error when they process your return and send you a refund check for the difference.

A tax advisor will advise you to possibly make a donation...if it makes sense to do so (i.e., if you itemize). Because you're specifically paying them a lot of money to minimize the amount of tax that you owe.

This is how it is done in Sweden. And after having lived in 2 other countries it is clearly the way to go.

The tax authority sends you a summary and you just approve it.

This always made the most sense to me. You get your return and review it; sign off if it's good, modify and return it if you have more claims, something is wrong / missing.

I'd wager the majority of people wouldn't have a reason to submit a revised return. And if the federal government generated your return, hopefully that would give them reason to automatically exclude you from audit, (ideally) reducing the burden of auditors.

As a Swedish expat in California I cringe everytime tax season comes. Both because of how annoying it is, and because I know how simple it can be.

Works this way in the Netherlands too, you login on a website and just click through the information they have pre-filled in normal cases.

Not to mention, I'm sure the "happy path" will accommodate a significant number of tax payers.

Currently, probably >85%, given that ~90% percent of households took the standard deduction in 2018.

The standard deduction is pretty high these days. I'll probably be back to not itemizing next year but my taxes are certainly not simple.

Most folks don't have taxes that are that complicated: most of those are businesses.

Most people file somewhat simple returns. We can get most people using "Auto-tax", where basically the IRS sends you some information to check over, including what you are going to get back or owe. We can do this for all of the commonly used forms, not just the EZ forms. Most folks aren't subject to "subjective" taxes.

Other places do it, after all. The IRS has the information. And it would probably increase tax revenue since it is easier to collect taxes that are easy to pay. (Sales tax is collected at purchase since few people self-report: Sales tax is even easier on the average person if included in price instead of added at the register).

You can require that the IRS err on behalf of the taxpayer and require it to give the maximum refund (or pay the least tax). And it isn't like the auto-file would be final: You still get the option for corrections (because mistakes happen) and can still self file.

There is a big gap between what tax software companies charge $$$ for and what is actually complex and subjective. Like, if you have an HSA, that instantly boots you into the Deluxe Edition of H&R Block (about $100 federal+state), even if your HSA situation is very straightforward.

Tax prep software is worth every penny IMO, but they do nickel-and-dime you for many pretty simple situations.

In one sense I totally agree, but in the other sense, it seems like it could be terribly invasive privacy wise.

Or just make their implementation of the tax code public?