Which isn't actually an issue. I moved from the US to Norway some years ago. Once a year, the government sends a letter (to a secure digital mailbox) and has me go online to check my tax return. If I do nothing, they'll just send me any refund I'm owed (or expect my payment by the due date). If there is an error of any sort or I need to do something to it, I have that option.
Many if not most people don't need to do anything, which saves money since there are less tax returns for humans to deal with. I'm guessing there are more resources available for other types collection efforts.
Although I agree that the IRS can make a guess, I'd rather just change it to a system without so many damn details
Most people trade through brokers like Coinbase, which does report
> overseas earnings
I don't think this applies to the VAST majority people
> business expenses
Also doesn't apply to the vast majority of people.
When you transfer stocks it transfers the basis for you.
Of course every category doesn't apply to most people. But there's about a thousand of them.
Ever drive Uber? Ever get a donation on Twitch? Ever gamble?
There's so many ways you can get a little chunk of change and IRS wants a slice of all of it
Even with a system of "not so many details", a few things are simply going to slip through the cracks but this isn't going to affect most people.
I pay something like $120 to TurboTax annually to file federal taxes and taxes for two states. I've got a W2 from my job, dividends and gains/losses from equity sales from my brokerage, 1099-Rs for my IRA and 401k, a 5498 for my HSA, and a bunch of deductions for charitable giving, which I perform through my DAF. Every single one of these forms is submitted to the government with complete information needed to compute my tax burden, except for the cost basis of my RSUs which is against some idiotic law to report to the IRS. Fix that, and the IRS can send me a bill. What percentage of the population do you think has more complex taxes than me?
Sometimes real small, like a few hundred bucks driving Uber. I took a deduction on miles driven as well.
Filing this kind of shit, and keeping records is insanely time-intensive. Easily several days of work.
Not to mention every brokerage already sent them the data, all of my bank accounts reported interest paid, but I need to do it manually again
If all your income is from a job or investments that have a 1099 and you only take the standard deduction, the government already knows exactly what you owe. The only thing they don't know is business income/loss and donations.
For most taxpayers the government could calculate your tax bill without any involvement from you.
Me: How much do I owe?
Gov’t: You have to figure that out.
Me: I just pay what I want?
Gov’t: Oh, no we know exactly how much you owe. But you have to guess that number too.
Me: What if I get it wrong?
Gov’t: You go to prison
People hate the police but for some reason think ladder climbing IRS agents are fair and rational. They aren’t. They’re bloodthirsty thugs who will make your life a living hell.
If you don’t believe that to be true then consider yourself very, very fortunate.
>If you don’t believe that to be true then consider yourself very, very fortunate.
Only if you're Al Capone[0] or similar.
I had an IRS agent come to my home. He knocked on my door and was quite polite. I didn't invite him in, but made an appointment to go to his office a week or so later.
The IRS claimed I owed a six figure sum (which was ridiculous, but whatever), and within a month or so, I filed the five years worth of tax returns which I'd ignored.
Guess what I got? A prison sentence? Nope. A big fine? Nope. A small fine? Nope. A refund.
If you’re not guilty then you have nothing to hide. The bedrock principle of our legal system!
Out of curiosity, which system are you referring to?
It's not the system in my country[0], so I'd like to know so as never to move to that place. Thanks!
[0] FYI, the bedrock principles of the legal system in my country are embodied here:
"If you're not guilty then you have nothing to hide" is a semi-common phrase that is broadly considered to be wrong and foolish. https://en.wikipedia.org/wiki/Nothing_to_hide_argument
This sub-thread contains statements such as "Nobody goes to prison over tax errors unless it's deliberate fraud" and "Only if you're Al Capone[0] or similar". It is my personal opinion that those statements are roughly equivalent to "if you're not guilty then you have nothing to hide". You may or may not agree with that comparison, that's fine.
The idea that the IRS only prosecutes and wins convictions against the guilty is naive and foolish based on my lived experiences. Other people have had other experiences. They are fortunate and privileged.
The difference in opinion between the police and IRS is interesting. Police are not popular these days. Some people even believe All Cops Are Bastards. I would encourage people to extend whatever opinion they hold on the police, prosecutors, and the judicial system to cover IRS agents as well.
And so Poe's Law[0] strikes again, I guess.
>This sub-thread contains statements such as "Nobody goes to prison over tax errors unless it's deliberate fraud" and "Only if you're Al Capone[0] or similar". It is my personal opinion that those statements are roughly equivalent to "if you're not guilty then you have nothing to hide". You may or may not agree with that comparison, that's fine.
Since I'm the one that mentioned Al Capone, my point wasn't that. At all.
Rather, that at least AFAICT, IRS agents mostly have the accountant/used car salesman vibe rather than an AR-15 wielding SWAT team member ready to to beat you with their Shillelagh if you mouth off.
>The idea that the IRS only prosecutes and wins convictions against the guilty is naive and foolish based on my lived experiences. Other people have had other experiences. They are fortunate and privileged.
I can't speak for anyone else, but I never said anything even approaching that.
While the IRS does have a Criminal Investigations[1] department, IRS agents are not law enforcement. They do not have the power of arrest, nor can their actions result in jail.
>The difference in opinion between the police and IRS is interesting. Police are not popular these days. Some people even believe All Cops Are Bastards. I would encourage people to extend whatever opinion they hold on the police, prosecutors, and the judicial system to cover IRS agents as well.
I'm old. When I was young, there were many street gangs in my home town and the police were just considered the biggest and best armed gang.
Over the past 40 years, some changes for the better have been made, but not enough to disabuse me of that notion WRT police.
As far as IRS agents are concerned, they are a whole different animal. They are not police. They do not arrest people. They do not handcuff people and "rough them up."
What they do is attempt to collect unpaid taxes. Whether they do that fairly is probably a crap shoot, like most civil servants who deal with the public.
The IRS has broad powers to attach/seize assets in recovering unpaid taxes, but revenue agents are (at least AFAIK) paper pushers and not jack-booted paramilitary thugs.
My experience with an IRS revenue officer was unpleasant, as action was started to attach some of my assets. Even though the "tax debt" assessed wasn't valid (as I mentioned in my initial reply[2] to you.
That said, once I addressed the issues, I was able to resolve them without issue and, not only did I not have to pay anything, I received a check from the IRS.
I'm sure my experience isn't the same as that of others, and I'm sure that IRS agents can (and do) make things quite unpleasant for some folks. But "thugs"[3] seems an inapt term.
If you don't like the police, prosecutors, judicial system and the IRS, I suggest you take appropriate action (activism, voting, etc.) to change how those institutions operate.
You certainly won't get a lot of argument from me about it, but your hyperbolic tone ("bloodthirsty thugs"? please.) seems a little shrill, IMHO.
I'm not telling you what to say, think or do, just providing my personal opinions and experiences as well as my impression of your exposition of yours.
I expect you will continue to disagree with me and that's fine. I have no special expertise or knowledge about the IRS and its revenue officers other than my own experience, so I'm sure YMMV.
[0] https://en.wikipedia.org/wiki/Poe's_law
[1] https://en.wikipedia.org/wiki/Internal_Revenue_Service#Crimi...
I used a CPA to generate do my taxes a couple times, not because I have a whole bunch of money or complicated stuff but because I was overseas a couple years then came back and bought a house.
First time it was great, the second(and last)time they screwed up. Badly.
My wife is a foreign national, not a US citizen and no plans to be one. At the time she did not have SSN. For the first filing, the CPA put her down and did not put down a SSN. The last time they put down a SSN, a random one from someone in NJ(How do I know this, my state revenue gave me all the persons details when I contacted them. Yes, that incompetent), I live in the south.
I noticed the issue when I was reviewing my paperwork after I got it back. Since I was filing via post, I crossed out the wrong number and wrote in a note.
3 weeks later I get a check from the state issued to my wife and I, listing the incorrect SSN for her. I call them up and spend several hours trying to contact them(call and no answer, call an hour before close and get closed message, call 30 minutes after open and get closed message) and then a couple hours on the phone where they admit that the paper work was corrected, they see that I corrected and then they want and used the wrong data anyway because...stupidity or something.
The solution is to send the check back to one address and resubmit paperwork to another address.
The IRS has not yet issued me anything, I call them to alert them of the issue and make sure I don't have to go through the same deal. I call and get through on the first try, I inform the agent of what happened and what I did to the paperwork. They pulled up a scan and told me they saw what I was talking about, that it would be no issue and I could relax and have a great day and recommended I don't use that CPA again in the future.
For all the hate and horror I hear about the IRS, I don't see anyone substantiate it. All this going on about bloodthirsty thugs just seems to be trying to "other" a group of people.
Maybe another story is appropriate here too:
I have two brothers who just imported a small gas powered excavator from China bought off of Alibaba.
In order to import such equipment, the engine must be certified for use in the US by the EPA. The document filing is rather strict, not good faith and refile + pay interest like how the IRS works. $15,000 in penalties and possible jail time if you make a mistake kinda strict.
I told them they needed to make sure the equipment was cleared for import as I have to work with the EPA on emissions certification sometimes.
The manufacturer assured them it was, they paid the down payment and wait for it to arrive. 3 days before the ship docks, they get a call from the cargo broker asking them for the EPA documentation. If they can't provide it by the time the ship docks, choices are: Get documents showing engine is certified, send to Customs bonded warehouse(high cost per day) and possibly rework/remove engine or abandon/dispose of cargo.
In attempting to get the certificate from the manufacturer, they contacted the EPA several times to make sure the information they were getting would match what was required. The older brother did the initial calling of the EPA. OB: "Fucking EPA, they are trying to get me to make a mistake so they can screw me over and fine me" The younger brother then called the EPA to get a better understanding and clarify what was relayed to him by the older. B: "The EPA isn't to bad, you ask them questions nicely and they respond. They even gave me some good advice on where I might be able to find some of the documents."
The only difference between the two is how they approached the government agent and their attitude and manner of asking questions.
My advice, if it seems like there are a bunch of people trying to screw you over using regulations, it might be the manner and way you are approaching the situation.
Further, that would be true anywhere, since no system is immune to tax fraud or improper communication.
So I have a few important questions then:
- How large is the error?
- Can errors be solved by saying "confirm and if we find out you lied you'll pay a fine"?
- Is the error homogeneous or worse for certain groups/classes?
- Is the error less than the cost and loss of productivity that Americans face in filing taxes?
- If it is non-homogeneous, then can we do return free filing for the majority of the population?
- Why can other countries successfully perform this but we can't?
That's not how it works, though. You're telling the government how much you own and how much you paid. They do have a good estimate, and often that estimate is probably correct. However, there are cases when that estimate isn't correct.