When you look at the donations politicians receive and the ROI they produce you quickly realize that they are way too cheap. Politicians should ask for way more money so lobbying is not that incredibly profitable.
> Politicians should ask for way more money so lobbying is not that incredibly profitable.
Except those corrupt politicians want lobbying to be profitable, so they can profit from it too. And if they ask for too much, they’ll just bribe the next guy or may even try to put their own in office. Can’t have that!
> I am surprised no one has started a go fund me to make a fund just to bribe politicians to fix tax filing.
>
> It would be cost effective VS paying for tax prep!
It will not work, part of compensation is being hired as lobbyist after you "retire" from public office. So either go fund me will do the same or it will fail.
The average HNer, who is fairly literate and well-informed about tax-prep, tends to misunderstand the situation.
Using tax preparation software is the cheap (or free!) alternative to what millions of Americans are doing. It was a change for the better for people who didn't do their own taxes. A regular person's taxes can always be done electronically for free, or if they really want, for $20-$100 through tax prep software.
What millions of Americans do is pay a local accountant hundreds of dollars. The accountant pays himself out of their refund. He is "their guy" who is going to find all the "loopholes" to get them the biggest possible refund. He is also a shield between them and the vengeful and anal IRS that will garnish their paychecks or possibly even imprison them for making mistakes. (This is how the accountants market things, not reality.)
The masses generally don't want to "fix" e-filing/tax prep because a) you can already do it for free if you want to, it just requires a third-party which may be dumb but isn't getting most people fired up or b) they don't care about tax prep software at all because they're using an accountant.
There are 800k people out there with Preparer Tax Identification Numbers(PTINs) being paid to file other people's taxes. Looking around for the estimates for the actual stats of the percentages of people supposed to use these preparers varies from 25-55%.
I'd like to defend the notion of using a CPA a bit. I started using one when I became a partner in a passthrough LLC. I was now self-employed and was responsible for paying taxes on the businesses income as well as my own personal income. Filing that first year was incredibly stressful and time consuming, and I came to the conclusion that sometimes the right thing to do is to hire someone who knows what theyre doing.
Your post paints accountants as con-men, swindling people and promising "loopholes". Maybe some are, but they do provide a valuable service, especially if your tax situation is non-trivial.
I would love for the tax code to be simplified enough that I don't feel compelled to hire someone who put in the work to understand it, but that's simply not the case right now.
I think GP’s point was that the vast majority of individuals have taxes that look like “one W2, maybe a couple 1099s, and standard deduction.” Many of these people have been scared into using a CPA when they really just need to plug-and-chug a few numbers into tax software.
As soon as the words “passthrough LLC” (or “farm” or “S-corp” or “itemize”) are on the table, it’s usually worth it to pay $1,000 for a professional, assuming your time is worth something.
Exactly. Tax complexity drives the CPA / tax prep need.
That said, there is a huge swath of America that's being preyed on by strip-mall tax prep, who derive zero benefit from it. (And an industry whose profits ultimately trickle up to the tax prep software companies)
Lobbyists aren't the problem. They are doing what they are paid to do.
If you donate to a large charity, there is a good chance some of that $ goes to lobbying, as it should. (Presumably you want the issues goy care about to be fixed!)
If you work at a large company, 100% chance it lobbies, for good reason. Large employers lobby for better mass transit (because parking garages are expensive), more housing (because it is cheaper to lobby than pay employees more so they can afford $$$$ houses), or friendlier business laws (no one likes paying more taxes).
Lobbying is everything from "help us use orphans as a source of cheap protein!" To "keep the national parks funded".
We recently made a fairly large donation to a children’s hospital to support a specific research program. They directly told us that the highest-impact way to deploy the funds would be to pay lobbyists to try to get earmarks injected into federal bills. Like, >10x expected ROI.
Not all lobbying is straight-up mustache twirling. But it definitely left a bad taste in our mouths.
This is a misleading characterization of the issue here. Let me pull up another very relevant analogy here. Let's say that you visit a government office for a driving license. Should you pay a bribe to the official? You are a responsible adult, after all. Bribes are needed for everything from housing permits to your kids' food assistance. How is it bad when it gets good things done?
Is this how you reason about corruption in government service? Unlike your argument about about lobbying, the problem is very conspicuous here - you're supposed to get those services without paying anything beyond the nominal service charges. They're your rights in an society where you already pay taxes to fund them. The government officials are already being paid with your tax money to do this job. What's even worse? If such loose and open-ended bargaining is permitted for basic essential services, then the only ones who will get those services will be the ones with money, not the ones who need it. Your housing permits and your kids' food assistance will become increasingly costlier and harder goals to achieve. That's why bribes are illegal.
If you look at this scenario carefully, it isn't much of an analogy. It's exactly the same situation, but with different players! When politicians debate public policy, the only criterion should be the public interests - because the public are the primary stakeholders in a democracy, and it's the utilization of their tax payments that these politicians are debating. Those politicians are supposed to be the people's 'representatives' who are elected and paid to listen to their constituents and lobby on their behalf. The public shouldn't have to 'lobby' with them too, especially for basic essentials like nutrition, national parks or tax filing!
What you call 'lobbying' in the US is known as 'political corruption' in most of the rest of the world. It's just a weasel word used to underplay the seriousness of such corruption. And as I pointed out earlier in my analogy, the rich ones outcompete the majority public here too. It's abundantly clear that even town councils favor big corpos even in the face of loud vocal opposition from the majority of their constituents. It's clear how much special treatment these professional grifters called 'lobbyists' get when they walk into the town hall just minutes before the discussion of a topic, while the town's people have to wait there for one and a half days without proper food, water or sleep in order to speak a few words in opposition. This is what happens when you legitimize corruption with cute terms like 'lobbying'.
"Keep the national parks funded" sounds like a good use case for lobbying, until you realize it's only needed as a counterweight because lobbying diminishes the relative role of the democratic process itself in meeting needs.
Or voters should take some civic responsibility and stop voting for corrupt politicians. Americans seem to be either unable to make their own decisions without paid advertising to direct them or they're afraid of "wasting" their vote on candidates that didn't spend enough on advertising.
Or “politics” are too much of their identity and they always vote for “their guy” regardless of the merits. Education does not matter when the vote has nothing to so with rationality and is only rooting for a team.
Corruption will never be solved. It could possibly be reduced if there was less ROI. I expect that would require shrinking the government so there is less centralized power. A limited federal government and more administrative power handed back to the states (within reason) would be interesting.
this is just a more abstract "bootstraps" argument. schooling in this country has been systematically attacked and deconstructed, and as the burger reich's leader says, "i love the poorly educated". this is not "dum timmy votes for dum thing" it's "countless $ and effort and man hours have been devoted to making the american populace dumber"
Why? look at any polling breakdown for how the educated vote vs the uneducated.
Try telling people you voted third party because of a deeply held conviction about not electing corrupt politicians. You will be told you are evil, that you've got an unreasonable/impossible purity bar, that you don't really believe in that deeply held moral conviction actually, that you are worse than the people who voted for the other guy, that you are a utopian idealist, etc etc.
Don't get me wrong, I did vote third party and I will continue to do so if the Dems put up candidates like Harris and Biden. But don't expect most people to be willing to weather the storm of vitriol they'll receive for holding a high bar for their politicians.
This problem is only magnified when you consider our voting system. Any ranked voting system inherently runs into Arrow's Impossibility Theorem, which makes what we have right now not exactly democratic. The solution would be to switch to something like approval voting but good luck getting that going.
Meanwhile in pretty much all other nations you go online to the free website, see your employer contributions already filled in and acknowledge they are correct for the year, add any extra income, check boxes for relevant deductions and you’re done.
This is true even of some third world countries like Sri Lanka (where I live). There is a web-based system called RAMIS (Revenue Administration Management Information System). Any taxpayer can log in using their tax identification number and file their taxes.
Which is basically how it works here too. If you just have W-2 income from an employer it takes less than 10 minutes to fill out the form. Sure, the system you mention is more convenient, but the difference is minimal.
The IRS already has most of my tax information and knows the tax code. Why must I deal with a third party (and potentially have to pay them) to electronically file my own taxes?
As for "having most of your tax information", they don't. They know your reported income. You see that on your W2s/1099s/etc. What they don't know is whether or not you had a kid this year, or whether you lost a kid this year, whether you got married or divorced, if your spouse is claiming the kids this year or not, the number or amount of your charitable contributions, whether you have deductible mileage expenses, or a million other things.
Doesn't America have uniquely complicated tax that requires you to keep all your receipts to claim all sorts of confusing deductions? How can the IRS know what you spent your income on if you don't tell them?
I've had the misfortune of having to fill in a W8-BEN-E form [1] and the first time, I just gave up and refused to work with the client because it was too complicated. The 2nd time, I got an LLM to tell me how to fill it in. Just look at the dense jargon - nonparticipating FFI, deemed-compliant FFI, Restricted distributor, International organiztion (hint, that's the wrong answer), Excepted territory NFFE, Passive NFFE, Direct reporting NFFE. There are 32 of them! What the hell is all that? Well 99% of cases are just one of those buried among the rest but you wouldn't know which without some advice.
For most people, those deductions are less than the "standard" deduction you can take instead. For most of the people who do itemized deductions, it's mostly just your mortgage payment and state taxes, which the IRS already knows about, and maybe charitable donations.
And even if you do have a lot of things to report, why not just report those things directly and let the IRS calculate your taxes, rather than you having to do it, fill out a complicated form, then the IRS does the calculation anyways to make sure you did it right?
While I fully agree that there are a lot of complicated rules for edge cases, for simple (non self employed) cases it is very straightforward. In fact, you don’t have to do anything at all in many cases and still won’t be screwed over as the German IRS will assume typical deductions. There is an official free filing software and if you spend 20-30 USD a year you’ll get access to super easy to use professional filing software. My situation is more complicated than most and I spend 2hrs a year for my entire family
The French tax system is pretty simple. Taxes are high, but simple. The website you use to file your taxes is also pretty simple, and every single field has a button that explains what it is about and in which cases you should write stuff inside.
The only annoying parts are if you have accounts outside of France, you have to declare them. And if you get dividends/capital gains in foreign currencies outside of the EU, you have to calculate yourself how much tax you owe using a bunch of tables per country and currency.
Yes, and? Nobody would fill all annexes. They are annexes because they're not part of the common path, and are only needed in specific scenarios. Their length is kind of irrelevant.
> Just look at the dense jargon ... There are 32 of them! What the hell is all that?
For every form I've ever had to file with the IRS, there's a corresponding set of instructions. Those instructions inevitably have a definitions section and/or define the terms in-line.
The instructions for form W8-BEN-E are at [0]. The definitions section starts at printed page 4 and continues through to printed page 7. Some terms you mentioned (like "Excepted territory NFFE") are not in the definitions section, but are described in their own sections.
I'm definitely not going to claim that it's foolish to consult with a tax lawyer (or similar such thing) when one is significantly uncertain about one's taxes. I'm definitely going to object to your implied claim that the IRS dumps a bunch of jargon on you and leaves you to rely on general-purpose search engines to figure out what the fuck they're talking about.
Remember, Americans have to file taxes separately to the State and Federal government. The Federal government has little authority to dictate State taxes. The paperwork is in part a coordination problem between the State and Federal governments.
Basic taxes are trivial in the US if you just work to live, it is essentially one page. However, there is an extremely long and fat tail where the government has no way of knowing the correct details to compute your taxes. There are myriad subsidies and offsets that have to be accounted for, many of which depend on what State you live in.
If you earn a lot of money, like the tech people that frequent this website, you are much more likely to find yourself in that fat tail. It can become esoteric quite quickly. The Federal tax code has to accommodate the completely independent tax codes of all 50 States in a reasonable way.
There is actually a pretty massive tax evasion problem. Or at least the IRS is pretty sure there is, but they don’t have the resources to go after even a small fraction of them. The only thing that keeps people honest is the worry that if they lie, the IRS might already know (based on e.g. 1099 reports that go to the IRS), or they’ll get audited (which actually happens very infrequently).
I just looked up https://directfile.irs.gov/. While it says closed, the testimonies on this site speak to how easy the filing was. Almost feels like it is intentional to keep rest of the site as is with a small banner on top announcing the closure, as a way to hint at this stupid move by the administration.
There are already ways to file your taxes for free or very cheap, e.g. https://www.freetaxusa.com. It would be hard for anyone to compete with a free or very cheap competitor, even as a nonprofit.
Yes, but Direct File moved us closer to a future where the government could pre-fill data for (and/or potentially just send a bill to) tax filers. Even if other free tax filing software exists, the loss of Direct File is painful because it was advancing the precedent of first party tax software.
I’m currently making my way through a video series on Ancient Rome. Apparently, there were times when Rome contracted out the right to collect taxes from certain regions. So businessmen would bid on this, and the winner then had a limited time when they could go out and collect the taxes. If they managed to collect more than what they paid for the bid, that was their profit. It’s easy to see how this was heavily abused, and these “publicans” were hated by the people. They’re even referenced in the Bible; “sinners and publicans”. How long before the IRS considers this arrangement?
> It started requiring phone numbers and things...
a) You're already trusting them with every piece of information in your tax return. It'd cost like five cents to use that information to discover your phone number... if they're malicious, you're already fucked.
b) When? At the end of the process where you're doing stuff like attesting that you're not lied on your tax return? I don't remember them demanding a phone number up front, and I also don't remember whether or not I refused to provide a phone number at the end.
The 1040 has a spot for both a phone number and an email address. The 1040 instructions make it completely clear that both are optional.
You have the option of entering your
phone number and email address in the
spaces provided. There will be no effect
on the processing of your return if you
choose not to enter this information.
Note that the IRS initiates most contacts
through regular mail delivered by the
United States Postal Service.
You know, the IRS is basically defunded, even not counting the whole shutdown thing. I wonder how many people need to file handwritten by mail before it becomes a significant problem
Direct File did have a lot of limitations, so I assume when they say “eligible taxpayers” that’s the total number of people that could have used Direct File, which is much less than 100% of taxpayers. Even then, I’d assume more than 10 million people in the U.S. have very simple tax returns.
Yes, and also, there's a difference between Free File and Direct File, and the article kind of switches between referring to the two.
Free file: government partners with private companies to offer free tax returns through their software for low income people. It's suspected a lot of people don't know about it, and just use the paid versions of filing software because you have to start the process on IRS.gov and dark patterns were employed by the snakes at Intuit et al. Hence "just 3%". Been around for decades.
Direct file: New program (since 2024) for eligible people to file directly for free with the IRS, no third party tax software middleman. Only half the states are eligible, income criteria, simple taxes only. 300,000 touted as a bigger number because it's a very new program.
What was wrong with using Free File Fillable Forms in the first place? It's the real deal forms just online and with nothing obscured or sugar coated.
I use it every year, and while I wouldn't exactly say I enjoy doing my taxes, I do enjoy being fully aware what I'm filing and not being forced to do it on paper just because others have obtuse opinions or are lazy.
I've used the fillable forms before; the problem is that to fill them out with confidence - to even know with confidence which ones you should be filling out - requires more knowledge of tax law than the average person can reasonably be expected to possess.
Now, the various self-filing software products also feel a lot like guessing, but at least they walk you through which guesses are mostly likely to be correct and can catch the most egregious errors.
Yes, obviously, everyone knows that. When all you have to file is a 1040, reading one of the instructions documents is fine. When you have to use several forms it start to add up.
I've filed my own taxes for years and have a complicated set up; real estate, stocks, rsus, espps, private shares, amt, etc ... It's extremely straightforward and takes less time than using turbotax if you've done it before. The instructions are obvious.
You can also call the IRS and be told for free what the rules are. People pay h&r block and Intuit when the irs is extremely responsive and will connect you with an actual American irs rep to answer your questions.
People pay for the software because they've been marketed to not because they need it. For the situations that are actually hard, then a software like TurboTax is useless.
Also if you get the numbers wrong the IRS just corrects it
It's pretty clear that daemonologist did not know that. Which is weird, given that all the tax law the average USian needs to know is "Read and follow the instructions for Form 1040.".
(RIP 1040-EZ. You were a good form.)
Also, I've had to file several forms in the past. It 'adds up', but it's all mechanically following instructions... not anything difficult.
Unless you have a unreasonably complicated return, you need absolutely no knowledge of tax law. It's all just "take the number from box X on form A and write it in box Y of form B."
Yes. I've used Free filllable forms several times. For basic tax situations, and even mildly complex ones, the problem isn't so much that it is hard as that it is very tedious.
It involves reading a lot of instructions, with many references to other documents and other sections. It involves copying a lot of numbers from one place to another, and doing basic math on them to get a new one.
It could be improved a lot just by automatically calculating more fields, and adding more of the "worksheets" that are in the instructions into the forms so it can calculate those for you.
> It could be improved a lot just by automatically calculating more fields, and adding more of the "worksheets" that are in the instructions into the forms so it can calculate those for you.
It already does this. The form validation checks that you have filled in the required fields and on most forms about half of the field values are not user-editable and instead auto-calculated from the other half.
It also looks for the required related forms you should have attached. The worksheets are another matter and aren't required to be attached, so they aren't part of the validation. It's assumed that you have read the instructions and done the worksheets elsewhere, although you certainly can attach them anyway.
If anyone's interested, the CashApp tax prep section (kind of its own app, but its contained within the CashApp app) is a feature they have purchased from CreditKarma when CreditKarma got bought out by Intuit (turbotax pricks).
So I had filed taxes with CreditKarma one year, and then the next year the CreditKarma tax service had no information about my previous filing. So I tried out the CashApp app, since I was going to have to fill out all the info anyway, and it actually did have my information from the previous year and I only had to change the new information, rather than re-enter all of my address and employer info, etc.
So I also recommend the CashApp app - it's free for basic taxes, it's not helping turbotax and their relentless lobbying, and it's really convenient if you already use CashApp. Of course, all of this is subject to change any specific year. Big companies gonna big company, after all.
If your tax situation isn't too complicated, it actually isn't too hard to fill out the forms yourself[1]. But if you are living abroad, unfortunately your tax situation probably isn't that simple.
[1]: Although I find it incredibly frustrating the lengths they go to to avoid negative numbers on the forms.
I pay $500 a year for an accountant to do my taxes for me. And then tell me I owe nothing. Support the Tax Fairness for Americans Abroad group, they’re working on fixing this.
They do. The problem isn’t understanding the numbers, they gave me last year, it’s making sure I am doing things correctly for both my US taxes and Norwegian taxes, including following the specifics of the US/Norway tax treaty.
Turbo tax is free for federal filers with no business income, same thing as this service. Except now no taxpayer dollars were spent on maintaining this. This would have been useful if it also did state taxes, which turbo tax is not free for.
They were rolling out matching services state by state. Something like 12 last year. And Turbo tax is NOT "free for federal filers with no business income". Just look at the Costco Turbotax stands every year.
No business income (including no Uber/doordash/etc due to schedule SE?), no dividends over $1500, no itemized deductions, no capital gains, no nanny (like you hiring a nanny), no unemployment income, no gambling winnings, no alimony, etc etc
Wasn't part of the impetus for the free file program because TurboTax actively hid the free filing options?
I am pretty sure that state filing would have happened in the future if the Trump admin hadn't killed it; you have to start somewhere, federal is as good a place as any.
The entire reason that tax software is hard is that it can NEVER produce a wrong answer. Plus tax law is about ten thousand times more complicated than you're assuming.
No tax software or expert will never produce a wrong answer, because too many questions have no guaranteed right answer, due to inconsistent interpretatios within the IRS.
Tax filing is a matter of risk balancing, which heuristics are great at optimizing, if they incorporate enough data. Neural networks are ideal for that, but it would take a lot of data gathering to develop the model, from data that isn't easily scraped from Web pages.
People file incorrect tax amounts all the time. It's the government's job to verify the return and either refund you or request more money. There's a decent margin for error, and not all returns are audited so the IRS must also have a margin for error they're building policy and budgets around.
You need legal documents to be accurate and deterministic, not for some LLM to make shit up and have you inadvertently and incompetently lie to the IRS.
The only reason I care about companies having my data is that it means the government can get to it. In this case I am required to give my data to the government anyway, so why would I care if OpenAI / Google has it?
ISTM one ought to be able to use AI to translate the official IRS forms to a machine readable format. No personal data needs to go anywhere near the AI.
Even if you do want to feed your personal data to an AI tax bot, this should be easily within the capabilities of a model that can run locally.
> translate the official IRS forms to a machine readable format
The instructions for each form published by the IRS every year are already written by professional technical writers to be unambiguous. Do you mean that someone ought to write a simplified english grammar transpiler? I think that would genuinely be interesting. What's missing are the guidelines the technical writers are using, but that can probably be derived.
Also, a good satire presents what the author believes is the right thing as well as ridiculing the wrong thing. "A Modest Proposal" is famous for the proposition that the Irish should eat their own babies - ridiculing the obviously wrong solution of blaming the Irish for their problems but it also explicitly lists things that would work in the guise of dismissing them as unworkable. Ideas like taxing the people who own everything in Ireland (many of whom were not Irish), and that's much less famous but it's right there in the text.
Money well spent
https://www.yahoo.com/news/opinion-makers-turbotax-gave-trum...
Such a cheap bribe holy crap.
When you look at the donations politicians receive and the ROI they produce you quickly realize that they are way too cheap. Politicians should ask for way more money so lobbying is not that incredibly profitable.
> Politicians should ask for way more money so lobbying is not that incredibly profitable.
Except those corrupt politicians want lobbying to be profitable, so they can profit from it too. And if they ask for too much, they’ll just bribe the next guy or may even try to put their own in office. Can’t have that!
Especially since they so often land jobs for themselves and their kids with the people that lobby them.
Kirsten Sinema got a job as a senior lobbiest after her short congressional stint.
Ah yes, the free market
Healthy competition, the free market has resolved the issues of overpriced bribes. /s
Compare https://slatestarcodex.com/2019/09/18/too-much-dark-money-in... and https://www.astralcodexten.com/p/tech-pacs-are-closing-in-on...
I am surprised no one has started a go fund me to make a fund just to bribe politicians to fix tax filing.
It would be cost effective VS paying for tax prep!
> I am surprised no one has started a go fund me to make a fund just to bribe politicians to fix tax filing. > > It would be cost effective VS paying for tax prep!
It will not work, part of compensation is being hired as lobbyist after you "retire" from public office. So either go fund me will do the same or it will fail.
The average HNer, who is fairly literate and well-informed about tax-prep, tends to misunderstand the situation.
Using tax preparation software is the cheap (or free!) alternative to what millions of Americans are doing. It was a change for the better for people who didn't do their own taxes. A regular person's taxes can always be done electronically for free, or if they really want, for $20-$100 through tax prep software.
What millions of Americans do is pay a local accountant hundreds of dollars. The accountant pays himself out of their refund. He is "their guy" who is going to find all the "loopholes" to get them the biggest possible refund. He is also a shield between them and the vengeful and anal IRS that will garnish their paychecks or possibly even imprison them for making mistakes. (This is how the accountants market things, not reality.)
The masses generally don't want to "fix" e-filing/tax prep because a) you can already do it for free if you want to, it just requires a third-party which may be dumb but isn't getting most people fired up or b) they don't care about tax prep software at all because they're using an accountant.
https://www.irs.gov/tax-professionals/return-preparer-office...
There are 800k people out there with Preparer Tax Identification Numbers(PTINs) being paid to file other people's taxes. Looking around for the estimates for the actual stats of the percentages of people supposed to use these preparers varies from 25-55%.
I'd like to defend the notion of using a CPA a bit. I started using one when I became a partner in a passthrough LLC. I was now self-employed and was responsible for paying taxes on the businesses income as well as my own personal income. Filing that first year was incredibly stressful and time consuming, and I came to the conclusion that sometimes the right thing to do is to hire someone who knows what theyre doing.
Your post paints accountants as con-men, swindling people and promising "loopholes". Maybe some are, but they do provide a valuable service, especially if your tax situation is non-trivial.
I would love for the tax code to be simplified enough that I don't feel compelled to hire someone who put in the work to understand it, but that's simply not the case right now.
I think GP’s point was that the vast majority of individuals have taxes that look like “one W2, maybe a couple 1099s, and standard deduction.” Many of these people have been scared into using a CPA when they really just need to plug-and-chug a few numbers into tax software.
As soon as the words “passthrough LLC” (or “farm” or “S-corp” or “itemize”) are on the table, it’s usually worth it to pay $1,000 for a professional, assuming your time is worth something.
Exactly. Tax complexity drives the CPA / tax prep need.
That said, there is a huge swath of America that's being preyed on by strip-mall tax prep, who derive zero benefit from it. (And an industry whose profits ultimately trickle up to the tax prep software companies)
I’m talking about people with a couple W2s and maybe a 1099. In your situation hiring a CPA is likely a very reasonable choice.
Jon Oliver tried his best to bribe Clarence Thomas, but unfortunately, the prick turns out to only be for sale to one side.
You might run into similar problems.
economies of scale, he's just being a smart businessman.
Maybe lobbyists should be punished by having their skin fully tattooed blue like smurfs.
This way, you’d have to really be into lobbying to suffer the tattoo pain and permanent branding.
Lobbyists aren't the problem. They are doing what they are paid to do.
If you donate to a large charity, there is a good chance some of that $ goes to lobbying, as it should. (Presumably you want the issues goy care about to be fixed!)
If you work at a large company, 100% chance it lobbies, for good reason. Large employers lobby for better mass transit (because parking garages are expensive), more housing (because it is cheaper to lobby than pay employees more so they can afford $$$$ houses), or friendlier business laws (no one likes paying more taxes).
Lobbying is everything from "help us use orphans as a source of cheap protein!" To "keep the national parks funded".
We recently made a fairly large donation to a children’s hospital to support a specific research program. They directly told us that the highest-impact way to deploy the funds would be to pay lobbyists to try to get earmarks injected into federal bills. Like, >10x expected ROI.
Not all lobbying is straight-up mustache twirling. But it definitely left a bad taste in our mouths.
This is a misleading characterization of the issue here. Let me pull up another very relevant analogy here. Let's say that you visit a government office for a driving license. Should you pay a bribe to the official? You are a responsible adult, after all. Bribes are needed for everything from housing permits to your kids' food assistance. How is it bad when it gets good things done?
Is this how you reason about corruption in government service? Unlike your argument about about lobbying, the problem is very conspicuous here - you're supposed to get those services without paying anything beyond the nominal service charges. They're your rights in an society where you already pay taxes to fund them. The government officials are already being paid with your tax money to do this job. What's even worse? If such loose and open-ended bargaining is permitted for basic essential services, then the only ones who will get those services will be the ones with money, not the ones who need it. Your housing permits and your kids' food assistance will become increasingly costlier and harder goals to achieve. That's why bribes are illegal.
If you look at this scenario carefully, it isn't much of an analogy. It's exactly the same situation, but with different players! When politicians debate public policy, the only criterion should be the public interests - because the public are the primary stakeholders in a democracy, and it's the utilization of their tax payments that these politicians are debating. Those politicians are supposed to be the people's 'representatives' who are elected and paid to listen to their constituents and lobby on their behalf. The public shouldn't have to 'lobby' with them too, especially for basic essentials like nutrition, national parks or tax filing!
What you call 'lobbying' in the US is known as 'political corruption' in most of the rest of the world. It's just a weasel word used to underplay the seriousness of such corruption. And as I pointed out earlier in my analogy, the rich ones outcompete the majority public here too. It's abundantly clear that even town councils favor big corpos even in the face of loud vocal opposition from the majority of their constituents. It's clear how much special treatment these professional grifters called 'lobbyists' get when they walk into the town hall just minutes before the discussion of a topic, while the town's people have to wait there for one and a half days without proper food, water or sleep in order to speak a few words in opposition. This is what happens when you legitimize corruption with cute terms like 'lobbying'.
"Keep the national parks funded" sounds like a good use case for lobbying, until you realize it's only needed as a counterweight because lobbying diminishes the relative role of the democratic process itself in meeting needs.
> (Presumably you want the issues goy care about to be fixed!)
Is 'goy' a typo? I only know of its meaning as 'non-Jewish person'.
Or voters should take some civic responsibility and stop voting for corrupt politicians. Americans seem to be either unable to make their own decisions without paid advertising to direct them or they're afraid of "wasting" their vote on candidates that didn't spend enough on advertising.
Or “politics” are too much of their identity and they always vote for “their guy” regardless of the merits. Education does not matter when the vote has nothing to so with rationality and is only rooting for a team.
Corruption will never be solved. It could possibly be reduced if there was less ROI. I expect that would require shrinking the government so there is less centralized power. A limited federal government and more administrative power handed back to the states (within reason) would be interesting.
this is just a more abstract "bootstraps" argument. schooling in this country has been systematically attacked and deconstructed, and as the burger reich's leader says, "i love the poorly educated". this is not "dum timmy votes for dum thing" it's "countless $ and effort and man hours have been devoted to making the american populace dumber" Why? look at any polling breakdown for how the educated vote vs the uneducated.
Try telling people you voted third party because of a deeply held conviction about not electing corrupt politicians. You will be told you are evil, that you've got an unreasonable/impossible purity bar, that you don't really believe in that deeply held moral conviction actually, that you are worse than the people who voted for the other guy, that you are a utopian idealist, etc etc.
Don't get me wrong, I did vote third party and I will continue to do so if the Dems put up candidates like Harris and Biden. But don't expect most people to be willing to weather the storm of vitriol they'll receive for holding a high bar for their politicians.
This problem is only magnified when you consider our voting system. Any ranked voting system inherently runs into Arrow's Impossibility Theorem, which makes what we have right now not exactly democratic. The solution would be to switch to something like approval voting but good luck getting that going.
It's more that voting third party in a first-past-the-post voting scheme is systemically pointless.
Parent poster said to stop voting for bad candidates. I said you would be mocked/judged/told off for doing so. And here we are.
Most bribes are
I thought we were draining the swamp >:(
There's more https://www.youtube.com/watch?v=y_q741QO_m0
Meanwhile in pretty much all other nations you go online to the free website, see your employer contributions already filled in and acknowledge they are correct for the year, add any extra income, check boxes for relevant deductions and you’re done.
This is true even of some third world countries like Sri Lanka (where I live). There is a web-based system called RAMIS (Revenue Administration Management Information System). Any taxpayer can log in using their tax identification number and file their taxes.
Which is basically how it works here too. If you just have W-2 income from an employer it takes less than 10 minutes to fill out the form. Sure, the system you mention is more convenient, but the difference is minimal.
The IRS already has most of my tax information and knows the tax code. Why must I deal with a third party (and potentially have to pay them) to electronically file my own taxes?
You don't have to pay.
https://www.irs.gov/e-file-providers/free-file-fillable-form...
As for "having most of your tax information", they don't. They know your reported income. You see that on your W2s/1099s/etc. What they don't know is whether or not you had a kid this year, or whether you lost a kid this year, whether you got married or divorced, if your spouse is claiming the kids this year or not, the number or amount of your charitable contributions, whether you have deductible mileage expenses, or a million other things.
This argument could be put in a museum as a perfect illustration of the "Perfect is the enemy of good" maxim.
Would just relying on the information from your employers cover all possible edge-cases? No.
Would it dramatically simplify the process for (tens?) millions of people? Absolutely.
The system he mentioned is usually equally simple for self-employed.
Lol not really in practice.
Doesn't America have uniquely complicated tax that requires you to keep all your receipts to claim all sorts of confusing deductions? How can the IRS know what you spent your income on if you don't tell them?
I've had the misfortune of having to fill in a W8-BEN-E form [1] and the first time, I just gave up and refused to work with the client because it was too complicated. The 2nd time, I got an LLM to tell me how to fill it in. Just look at the dense jargon - nonparticipating FFI, deemed-compliant FFI, Restricted distributor, International organiztion (hint, that's the wrong answer), Excepted territory NFFE, Passive NFFE, Direct reporting NFFE. There are 32 of them! What the hell is all that? Well 99% of cases are just one of those buried among the rest but you wouldn't know which without some advice.
[1] https://www.irs.gov/pub/irs-pdf/fw8bene.pdf
For most people, those deductions are less than the "standard" deduction you can take instead. For most of the people who do itemized deductions, it's mostly just your mortgage payment and state taxes, which the IRS already knows about, and maybe charitable donations.
And even if you do have a lot of things to report, why not just report those things directly and let the IRS calculate your taxes, rather than you having to do it, fill out a complicated form, then the IRS does the calculation anyways to make sure you did it right?
The majority of Americans are W2 wage earners that take the standard deduction.
For a truly uniquely complicated tax system please move to Germany.
While I fully agree that there are a lot of complicated rules for edge cases, for simple (non self employed) cases it is very straightforward. In fact, you don’t have to do anything at all in many cases and still won’t be screwed over as the German IRS will assume typical deductions. There is an official free filing software and if you spend 20-30 USD a year you’ll get access to super easy to use professional filing software. My situation is more complicated than most and I spend 2hrs a year for my entire family
I highly doubt that it's more complicated than the French or German tax system.
Based on what?
The French tax system is pretty simple. Taxes are high, but simple. The website you use to file your taxes is also pretty simple, and every single field has a button that explains what it is about and in which cases you should write stuff inside.
The only annoying parts are if you have accounts outside of France, you have to declare them. And if you get dividends/capital gains in foreign currencies outside of the EU, you have to calculate yourself how much tax you owe using a bunch of tables per country and currency.
For basic taxes yes but you have annex forms which are 20 pages long in the french system.
20 pages? My 2024 full pdf from turbotax was 644 pages.
Yes, and? Nobody would fill all annexes. They are annexes because they're not part of the common path, and are only needed in specific scenarios. Their length is kind of irrelevant.
This is exactly the way it works in the US. All the really complex parts are never even used by 99% of people.
> Just look at the dense jargon ... There are 32 of them! What the hell is all that?
For every form I've ever had to file with the IRS, there's a corresponding set of instructions. Those instructions inevitably have a definitions section and/or define the terms in-line.
The instructions for form W8-BEN-E are at [0]. The definitions section starts at printed page 4 and continues through to printed page 7. Some terms you mentioned (like "Excepted territory NFFE") are not in the definitions section, but are described in their own sections.
I'm definitely not going to claim that it's foolish to consult with a tax lawyer (or similar such thing) when one is significantly uncertain about one's taxes. I'm definitely going to object to your implied claim that the IRS dumps a bunch of jargon on you and leaves you to rely on general-purpose search engines to figure out what the fuck they're talking about.
[0] <https://www.irs.gov/pub/irs-pdf/iw8bene.pdf>
When you say America you certainly mean USA? Or is America a country now?
Remember, Americans have to file taxes separately to the State and Federal government. The Federal government has little authority to dictate State taxes. The paperwork is in part a coordination problem between the State and Federal governments.
Basic taxes are trivial in the US if you just work to live, it is essentially one page. However, there is an extremely long and fat tail where the government has no way of knowing the correct details to compute your taxes. There are myriad subsidies and offsets that have to be accounted for, many of which depend on what State you live in.
If you earn a lot of money, like the tech people that frequent this website, you are much more likely to find yourself in that fat tail. It can become esoteric quite quickly. The Federal tax code has to accommodate the completely independent tax codes of all 50 States in a reasonable way.
Even so, Direct File was possible.
Until it wasn’t.
It is not that complex. RSU's or options are pretty straightforward.
Deductions can get esoteric if you sold a bunch of stock. Even then, not that bad.
RSUs are not straightforward: https://news.ycombinator.com/item?id=43676698
And options are worse.
Congratulations on having simple taxes. It can definitely get more complex.
There is a reason Americans spend staggering amounts of time and money on tax preparation. It is simple until it isn’t.
Yes, the reason is Intuit.
If they genuinely can't work out what you owe, why bother paying it at all? Shouldn't there be a massive tax evasion problem?
There is actually a pretty massive tax evasion problem. Or at least the IRS is pretty sure there is, but they don’t have the resources to go after even a small fraction of them. The only thing that keeps people honest is the worry that if they lie, the IRS might already know (based on e.g. 1099 reports that go to the IRS), or they’ll get audited (which actually happens very infrequently).
https://github.com/IRS-Public/direct-file <- Direct File's web app source code is public-domain and published on GitHub!
Obviously the 2025 version will be out of date for the 2026 filing season, though public code means it can always be revived by anyone else.
(previous HN threads: https://news.ycombinator.com/item?id=44182356 https://news.ycombinator.com/item?id=44131901 )
Does the "Modernized eFile API" still exist?
Fascinating repo, thank you for sharing!
I just looked up https://directfile.irs.gov/. While it says closed, the testimonies on this site speak to how easy the filing was. Almost feels like it is intentional to keep rest of the site as is with a small banner on top announcing the closure, as a way to hint at this stupid move by the administration.
Paying a private company so you can pay the government.
You guys need to raise your expectations.
Why won't a non-profit pick up the open-source code they released and modify it for 2026?
Everybody seems to care about this issue so much, so this feels like an extremely high-impact thing to do.
There are already ways to file your taxes for free or very cheap, e.g. https://www.freetaxusa.com. It would be hard for anyone to compete with a free or very cheap competitor, even as a nonprofit.
Yes, but Direct File moved us closer to a future where the government could pre-fill data for (and/or potentially just send a bill to) tax filers. Even if other free tax filing software exists, the loss of Direct File is painful because it was advancing the precedent of first party tax software.
I’m currently making my way through a video series on Ancient Rome. Apparently, there were times when Rome contracted out the right to collect taxes from certain regions. So businessmen would bid on this, and the winner then had a limited time when they could go out and collect the taxes. If they managed to collect more than what they paid for the bid, that was their profit. It’s easy to see how this was heavily abused, and these “publicans” were hated by the people. They’re even referenced in the Bible; “sinners and publicans”. How long before the IRS considers this arrangement?
As long as they don't kill FreeFillableForms...
It started requiring phone numbers and things and I stopped using it in favor of my own spreadsheet.
> It started requiring phone numbers and things...
a) You're already trusting them with every piece of information in your tax return. It'd cost like five cents to use that information to discover your phone number... if they're malicious, you're already fucked.
b) When? At the end of the process where you're doing stuff like attesting that you're not lied on your tax return? I don't remember them demanding a phone number up front, and I also don't remember whether or not I refused to provide a phone number at the end.
The 1040 has a spot for phone number too...
The 1040 has a spot for both a phone number and an email address. The 1040 instructions make it completely clear that both are optional.
If they do, I'm filing paper. Clowns.
You know, the IRS is basically defunded, even not counting the whole shutdown thing. I wonder how many people need to file handwritten by mail before it becomes a significant problem
IRS will absolutely go after regular people who just have a W-2 and maybe a couple of 1040 forms. It's easy to verify automatically.
But if you're a rich person with dozens of companies and complicated trusts? Yep, nobody is going to be looking.
[sorry](https://www.irs.gov/e-file-providers/free-file-fillable-form...)
That's about it being closed for the 2025 tax year (because the filing deadling has passed), not about the program being shut down.
The article touts the ~300k users of direct file as a big number, and the “just 3% of eligible tax payers” used free file as a small number.
Wouldn’t the 3% number come out yo millions of people?
Direct File did have a lot of limitations, so I assume when they say “eligible taxpayers” that’s the total number of people that could have used Direct File, which is much less than 100% of taxpayers. Even then, I’d assume more than 10 million people in the U.S. have very simple tax returns.
Yes, and also, there's a difference between Free File and Direct File, and the article kind of switches between referring to the two.
Free file: government partners with private companies to offer free tax returns through their software for low income people. It's suspected a lot of people don't know about it, and just use the paid versions of filing software because you have to start the process on IRS.gov and dark patterns were employed by the snakes at Intuit et al. Hence "just 3%". Been around for decades.
Direct file: New program (since 2024) for eligible people to file directly for free with the IRS, no third party tax software middleman. Only half the states are eligible, income criteria, simple taxes only. 300,000 touted as a bigger number because it's a very new program.
Why innovate when you can be a perpetual rentier?
Direct File won’t happen in 2026, Intuit tells IRS
This is the correct headline
Very related discussion from 6 months ago:
https://news.ycombinator.com/item?id=43724267
Isn't it great to have a government that serves corporations and not its people!
no
But corporations are people
Corporations are people, my friend!
Citizens United v. Federal Election Commission, 558 U.S. 310
What was wrong with using Free File Fillable Forms in the first place? It's the real deal forms just online and with nothing obscured or sugar coated.
I use it every year, and while I wouldn't exactly say I enjoy doing my taxes, I do enjoy being fully aware what I'm filing and not being forced to do it on paper just because others have obtuse opinions or are lazy.
I've used the fillable forms before; the problem is that to fill them out with confidence - to even know with confidence which ones you should be filling out - requires more knowledge of tax law than the average person can reasonably be expected to possess.
Now, the various self-filing software products also feel a lot like guessing, but at least they walk you through which guesses are mostly likely to be correct and can catch the most egregious errors.
The form that you fill out has a very tearse description of the field, but the actual instructions are in a separate document. For example, form 1040 is here: https://www.irs.gov/pub/irs-pdf/f1040.pdf and the instructions document is here: https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
The instructions make it very clear when a field in the form should be used and what should go in it.
Yes, obviously, everyone knows that. When all you have to file is a 1040, reading one of the instructions documents is fine. When you have to use several forms it start to add up.
I've filed my own taxes for years and have a complicated set up; real estate, stocks, rsus, espps, private shares, amt, etc ... It's extremely straightforward and takes less time than using turbotax if you've done it before. The instructions are obvious.
You can also call the IRS and be told for free what the rules are. People pay h&r block and Intuit when the irs is extremely responsive and will connect you with an actual American irs rep to answer your questions.
People pay for the software because they've been marketed to not because they need it. For the situations that are actually hard, then a software like TurboTax is useless.
Also if you get the numbers wrong the IRS just corrects it
> Yes, obviously, everyone knows that.
It's pretty clear that daemonologist did not know that. Which is weird, given that all the tax law the average USian needs to know is "Read and follow the instructions for Form 1040.".
(RIP 1040-EZ. You were a good form.)
Also, I've had to file several forms in the past. It 'adds up', but it's all mechanically following instructions... not anything difficult.
Unless you have a unreasonably complicated return, you need absolutely no knowledge of tax law. It's all just "take the number from box X on form A and write it in box Y of form B."
Yes. I've used Free filllable forms several times. For basic tax situations, and even mildly complex ones, the problem isn't so much that it is hard as that it is very tedious.
It involves reading a lot of instructions, with many references to other documents and other sections. It involves copying a lot of numbers from one place to another, and doing basic math on them to get a new one.
It could be improved a lot just by automatically calculating more fields, and adding more of the "worksheets" that are in the instructions into the forms so it can calculate those for you.
yes, the worksheets especially are tedious when they could be automatically calculate with relatively little effort in most cases.
> It could be improved a lot just by automatically calculating more fields, and adding more of the "worksheets" that are in the instructions into the forms so it can calculate those for you.
It already does this. The form validation checks that you have filled in the required fields and on most forms about half of the field values are not user-editable and instead auto-calculated from the other half.
It also looks for the required related forms you should have attached. The worksheets are another matter and aren't required to be attached, so they aren't part of the validation. It's assumed that you have read the instructions and done the worksheets elsewhere, although you certainly can attach them anyway.
Why does anyone want a better option when a worse option is available…
The Trump Administration is hell bent on doing everything it can to benefit large corporations at the expense of the American people.
Cash App offers free Fed and State filing and it's quite good (used it last year for the first time). Not many people know about it though.
If anyone's interested, the CashApp tax prep section (kind of its own app, but its contained within the CashApp app) is a feature they have purchased from CreditKarma when CreditKarma got bought out by Intuit (turbotax pricks).
So I had filed taxes with CreditKarma one year, and then the next year the CreditKarma tax service had no information about my previous filing. So I tried out the CashApp app, since I was going to have to fill out all the info anyway, and it actually did have my information from the previous year and I only had to change the new information, rather than re-enter all of my address and employer info, etc.
So I also recommend the CashApp app - it's free for basic taxes, it's not helping turbotax and their relentless lobbying, and it's really convenient if you already use CashApp. Of course, all of this is subject to change any specific year. Big companies gonna big company, after all.
FreeTaxUSA
Ok, fine, I’ll use TurboTax.
I live and work abroad and Turbotax requires a US billing address to pay the fee of using Turbotax. :facepalm
All the other self-service options do not work and I’m not sure if the risk is worth it to file it myself.
To my fellow Expats, what are you doing?
If your tax situation isn't too complicated, it actually isn't too hard to fill out the forms yourself[1]. But if you are living abroad, unfortunately your tax situation probably isn't that simple.
[1]: Although I find it incredibly frustrating the lengths they go to to avoid negative numbers on the forms.
I pay $500 a year for an accountant to do my taxes for me. And then tell me I owe nothing. Support the Tax Fairness for Americans Abroad group, they’re working on fixing this.
If your accountant doesn't give you the forms AND worksheets, change accountant.
They do. The problem isn’t understanding the numbers, they gave me last year, it’s making sure I am doing things correctly for both my US taxes and Norwegian taxes, including following the specifics of the US/Norway tax treaty.
Does FreeTaxUSA work for you?
TurboTax is one of the products of Intuit, the company that's fucking us all over with this - its not fine, stop being ok with it.
As one of those ~300,000 that filed with Direct File these last two years I’m sad and disgusted.
Guess I get screwed so some asshole at Intuit can make an extra twenty bucks.
This wont bode well.........
Direct File won’t happen in 2026, Intuit TurboTax tells states[1]
There, fixed that for you.
[1] Very related discussion six months ago posted by me.
https://news.ycombinator.com/item?id=43724267
Turbo tax is free for federal filers with no business income, same thing as this service. Except now no taxpayer dollars were spent on maintaining this. This would have been useful if it also did state taxes, which turbo tax is not free for.
They were rolling out matching services state by state. Something like 12 last year. And Turbo tax is NOT "free for federal filers with no business income". Just look at the Costco Turbotax stands every year.
No business income (including no Uber/doordash/etc due to schedule SE?), no dividends over $1500, no itemized deductions, no capital gains, no nanny (like you hiring a nanny), no unemployment income, no gambling winnings, no alimony, etc etc
The federal government doesn't do state taxes.
Luckily for me, my state rolled out its equivalent of Direct File a couple years ago, and it's fantastic. Just like Direct File was.
Wasn't part of the impetus for the free file program because TurboTax actively hid the free filing options?
I am pretty sure that state filing would have happened in the future if the Trump admin hadn't killed it; you have to start somewhere, federal is as good a place as any.
https://www.ftc.gov/news-events/news/press-releases/2022/03/...
https://www.propublica.org/article/turbotax-deliberately-hid...
With the rise of AI there is no excuse on why tax software should be so hard to make.
The entire reason that tax software is hard is that it can NEVER produce a wrong answer. Plus tax law is about ten thousand times more complicated than you're assuming.
No tax software or expert will never produce a wrong answer, because too many questions have no guaranteed right answer, due to inconsistent interpretatios within the IRS.
Tax filing is a matter of risk balancing, which heuristics are great at optimizing, if they incorporate enough data. Neural networks are ideal for that, but it would take a lot of data gathering to develop the model, from data that isn't easily scraped from Web pages.
People file incorrect tax amounts all the time. It's the government's job to verify the return and either refund you or request more money. There's a decent margin for error, and not all returns are audited so the IRS must also have a margin for error they're building policy and budgets around.
1% of returns filed by tax software have errors, which is infinitely more than 0%
>it can NEVER produce a wrong answer
As the government it should be possible to reduce the negative impact of making mistakes.
>Plus tax law is about ten thousand times more complicated than you're assuming.
Then start simple. You don't have to cover all of tax law at the start.
You’re going to give your tax data - some of the most sensitive data to some constituents - to OpenAI / Google / some other startup?
That seems like a nightmare of a product as far as privacy is concerned.
Fwiw they have already bought all you financial info from Experian
https://theworknumber.com/solutions/products/income-employme...
I was flabbergasted when I heard of this. Basically you are totally transparent for anybody who wants to spend some money.
Being an American with so much freedom is so refreshing
Oh shit, wait.
I think they meant that it should be a lot faster to develop software that implements the tax code with the assistance of AI coding tools.
You need legal documents to be accurate and deterministic, not for some LLM to make shit up and have you inadvertently and incompetently lie to the IRS.
The only reason I care about companies having my data is that it means the government can get to it. In this case I am required to give my data to the government anyway, so why would I care if OpenAI / Google has it?
ISTM one ought to be able to use AI to translate the official IRS forms to a machine readable format. No personal data needs to go anywhere near the AI.
Even if you do want to feed your personal data to an AI tax bot, this should be easily within the capabilities of a model that can run locally.
> translate the official IRS forms to a machine readable format
The instructions for each form published by the IRS every year are already written by professional technical writers to be unambiguous. Do you mean that someone ought to write a simplified english grammar transpiler? I think that would genuinely be interesting. What's missing are the guidelines the technical writers are using, but that can probably be derived.
Satire requires a clarity of purpose and target, lest it be mistaken for, and contribute to, that which it intends to criticize.
Also, a good satire presents what the author believes is the right thing as well as ridiculing the wrong thing. "A Modest Proposal" is famous for the proposition that the Irish should eat their own babies - ridiculing the obviously wrong solution of blaming the Irish for their problems but it also explicitly lists things that would work in the guise of dismissing them as unworkable. Ideas like taxing the people who own everything in Ireland (many of whom were not Irish), and that's much less famous but it's right there in the text.
I'm surprised that there hasn't been an "this is good for bitcoin" comments yet.