IRS Free Tax Filing Pilot Saved Consumers $5.6 Million In Prep Fees (cnbc.com) 37
The free tax filing pilot from the IRS that rolled out in 12 states last month saved filers an estimated $5.6 million in tax preparation fees for federal returns, said IRS Commissioner Danny Werfel. CNBC reports: This season, more than 140,000 taxpayers successfully filed returns using IRS Direct File, a free tax filing pilot from the IRS, according to the U.S. Department of the Treasury and the IRS. Direct File surveyed more than 15,000 users, around 90% of whom rated their experience as "excellent," the agencies reported.
"We have not made a decision about the future of Direct File," Werfel said, noting the agency still needs to analyze data and get feedback from a "wide variety of stakeholders." The IRS plans to release a more detailed report about the Direct File pilot "in the coming days," he added. If Direct File were expanded for the next season, the program could add additional states and tax situations, according to a senior IRS official. The agency expects to decide the future of Direct File later this spring, Werfel said.
"We have not made a decision about the future of Direct File," Werfel said, noting the agency still needs to analyze data and get feedback from a "wide variety of stakeholders." The IRS plans to release a more detailed report about the Direct File pilot "in the coming days," he added. If Direct File were expanded for the next season, the program could add additional states and tax situations, according to a senior IRS official. The agency expects to decide the future of Direct File later this spring, Werfel said.
More impressive (Score:4, Interesting)
is the new quick turn around Form 4 NFA tax processing. What has traditionally taken months of waiting is now happening in days, I've seen several completed within 24 hours of submission...
And cost tax preparers... (Score:5, Insightful)
Re:And cost tax preparers... (Score:4, Insightful)
Perhaps you're familiar with Louis Rossmann. If not, I suggest you watch some of his videos concerning his dealings with New York's tax department. Absolute fuckery due to incompetent bureaucrats.
Re:And cost tax preparers... (Score:5, Informative)
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In this case, it sounds like it might be a good idea to invest a couple of bucks in using certified mail with a return receipt.
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Re:And cost tax preparers... (Score:4, Interesting)
>"I file one return that has to be in writing and sent in. Four of the last 15 years they have lost it."
Something must be seriously wrong with your mail service there. I have filed paper tax forms, done myself, sent regular US mail, for 37+ years and have never had one lost.
Not in the mindset of defending the IRS, but I am not thinking that is a "them" problem.
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Yeah, that is certain sus. Could be one of the many IRS offices is somehow whacked.
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Put them in charge of everything and their fuck ups will hurt you instead o
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Agreed. A free filing system is long overdue and tax prep companies have been making a killing that I don't mind taking away from them.
However to date, every attempt to reform the tax code (in any country) has made it more complex and way worse. I'm not sure anything productive can ever be done about it. My current policy is to vote against anyone that mentions tax reform, because it won't end well.
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Generally I would agree with you. However, the last reform that greatly increased the standard deduction made it so that the vast majority of people who used to have to itemize, don't have to itemize deductions anymore. That actually did help a lot.
But the income tax code is still ridiculously overly complex.
It really is crazy that they can't AT LEAST just put the damn 1040 and related forms into a web form that allows you to key it, do some basic math and checks, submit it, and print it. If you need mor
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It really is crazy that they can't AT LEAST just put the damn 1040 and related forms into a web form that allows you to key it, do some basic math and checks, submit it, and print it.
You mean, provide Free File Fillable Forms [irs.gov] like these?
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>"You mean, provide Free File Fillable Forms like these?"
Ah, I skipped over that because I thought it was just fillable PDF files, which is what I already do. Reading about it, looks like I can't use it:
"you must have a U.S. phone number that accepts text messages"
"phone verification [...] If you are not receiving the verification codes, from both sources, you will not be able to create an account:"
I do not give out my cell number to ANY organization, ever. Oh well, guess I am stuck with paper. :(
Also,
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You aren't going to jail if you make a simple mistake on a tax form. You aren't Al Capone, Wesley Snipes, or Lauryn Hill. They all refused to pay millions and did time instead.
Re: And cost tax preparers... (Score:5, Interesting)
Disclaimer: Former IT and Financials auditor.
The IRS does not know what you owe the Federal government. You tell your employer how much to give the FG. And they use a simple look up table to pre-pay the govt. Usually people elect to give more than they should. Pretty much everyone below 50k in earnings gives a lot over what they owe.
For the vast majority of Americans, tax files are a correction of showing the US govt that they paid too much and should get some back. For people with W2s or SSI, 401ks, and Savings accounts, it's actually not complicated. There should have been a simple website at the IRS for this in the 1990s. But we are a County mostly ruled by corporations and mitigated only by competing interests.
As for the complexity of the tax code,
much of it is for the betterment of the country. We want to encourage personal investment, families, and keeping healthy. The Federal govt even gives you a Credit for all the taxes you paid to your County & City! For small timers, even more! Even if you do stocks, 1yr plus holdings don't add any complexity. Tax payers just need to make sure they pre-pay 15% of any profit within the quarter.
The actual complex part is all the corporate additions. These make it hard for small businesses and self-employed. It's far more complex for large businesses and the wealthy (+500k/yr) but those guys have the resources to make it vastly easy.
Believe it or not, the IRS and normal Tax guys don't want to deal with the general tax payer. The little fraud there doesn't add up to much. It's almost negative for the people as when you consider many below the poverty level overpay by almost 30% of their income and don't get refunds! Even people making less than 50k overpay $5k every year! That's a lot of the government funding needs being placed on the ones with the least means to pay.
HRB and TaxCut are additional barriers for these people to file these simple taxes. I wish basic tax filing was taught in 9th grade as part of some standard home economics class or gym or Social Studies or English. It would immensely help our country.
State taxes are a whole other matter... states are messed up!
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You contradicted yourself in a way. The government knows how much your employers paid you, however the complicated tax code means there's a shitload of other quibbles that must be computed, and the government does not know which applies to you.
More, please (Score:3)
IRS stated through the GAO that the combined costs to develop and run this initial pilot ran about $25 million**. That's pretty steep, but doesn't seem particularly egregious for essentially breaking into and disrupting an entrenched industry. The running costs for Direct File were estimated at $2.4 million**, which will certainly go up as/if the program expands, but so will the amount of revenue diverted from tax preparers.
** These numbers are disputed. According to a GAO report, there were a number of additional costs that should have been included, particularly costs related to the Direct File pilot incurred by the US Digital Service (USDS, a technology unit that is part of the Executive branch of the government) that were not required to be reimbursed from IRS. USDS developed the prototype that was eventually developed into the Direct File program and also loaned 29 staff to the IRS to assist with building and running Direct File)
GAO report about IRS Direct File [gao.gov]
Paying taxes shouldn't cost most people money (Score:5, Insightful)
The base issue here is that our tax system is needlessly complicated - thanks, Congress! But if the government is going to insist on a stupidly complicated system, most taxpayers shouldn't have to pay even more money just to hand the government what the government says they owe.
Whether it hurts the employees of H&R Block is irrelevant.
Re:Fix It (Score:4, Insightful)
The FairTax proposal is a very regressive tax [taxpolicycenter.org]. And you'd still need an entity, not unlike the IRS, to manage a progressive program called a prebate [fairtax.org]. The prebate system that would apply to around 70 million households in the US, as it applies in vary degrees to people who are need assistance or otherwise receive a reduced tax bill today. (about 40% of households in some form or another [taxpolicycenter.org]). It's no small feat to issue checks, even electronically, to households every month. It's administratively complicated and you need staff to do the work.
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"he prebate system that would apply to around 70 million households in the US, as it applies in vary degrees to people who are need assistance "
Just noticed this error too. The prebate is to be received by absolutely everyone who is living in the country legally. Foreign nationals, all folks regardless of income, Bill Gates on down to your favorite bag lady would be getting the prebate. It is just for the purpose of not taxing necessities for ANYBODY. Of course the rich folks barely notice the preba
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The Department of Agriculture's Food and Nutritional Service employs 1,300 people. If it takes that many people to manage the services to 40 million. Then we're on the right track in firing the IRS's 95,000 employees that serve essentially 300 million people. We might only need 10k employees to handle prebates. That cuts 80k unneeded people from the federal government and saves a trivial amount of money.
Which goes back to my point:
And you'd still need an entity, not unlike the IRS, [...]
There are details that we could hypothesis over. But the point stands that if
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Whether it hurts the employees of H&R Block is irrelevant.
They should have pivoted to payroll processing if they wanted to save their business.
$373.33??? (Score:2)
>" saved filers an estimated $5.6 million [...]140,000 taxpayers successfully filed returns using IRS Direct File"
I have never paid to file taxes, I just fill out the PDF forms, do a little math, and print it and mail it. People are paying, based on that "estimate", $373.33 each, on average, just to file a simple, Fed-only, 1024 (which I think is all that Direct File would do)? Um, wow. Either people were grossly overpaying or that estimate is bogus. I saw plenty of other online tax prep for simple s
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>"I went to H&R block for that sucker."
Correction, it was Jackson Hewitt. Not that it matters, in principle.
Re: $373.33??? (Score:2)
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Damn, that is what I get for posting when late/tired.
Yeah, $40 is far more reasonable.
I wish there were a way to edit or delete postings. Anyway, thanks for posting.
IRS Direct File cannot process extra forms needed (Score:2)
Costs (Score:1)
"Saving" taxpayers $6M by spending $25M of taxpayers' money— thank you, big G.