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Open Source United States

The IRS Tax Filing Software TurboTax Is Trying To Kill Just Got Open Sourced (404media.co) 187

Posted by msmash from the moving-forward dept.
An anonymous reader shares a report: The IRS open sourced much of its incredibly popular Direct File software as the future of the free tax filing program is at risk of being killed by Intuit's lobbyists and Donald Trump's megabill. Meanwhile, several top developers who worked on the software have left the government and joined a project to explore the "future of tax filing" in the private sector.

Direct File is a piece of software created by developers at the US Digital Service and 18F, the former of which became DOGE and is now unrecognizable, and the latter of which was killed by DOGE. Direct File has been called a "free, easy, and trustworthy" piece of software that made tax filing "more efficient." About 300,000 people used it last year as part of a limited pilot program, and those who did gave it incredibly positive reviews, according to reporting by Federal News Network.

But because it is free and because it is an example of government working, Direct File and the IRS's Free File program more broadly have been the subject of years of lobbying efforts by financial technology giants like Intuit, which makes TurboTax. DOGE sought to kill Direct File, and currently, there is language in Trump's massive budget reconciliation bill that would kill Direct File. Experts say that "ending [the] Direct File program is a gift to the tax-prep industry that will cost taxpayers time and money."

The IRS Tax Filing Software TurboTax Is Trying To Kill Just Got Open Sourced More | Reply

The IRS Tax Filing Software TurboTax Is Trying To Kill Just Got Open Sourced

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  • Hubub? (Score:4, Interesting)

    by jjoelc ( 1589361 ) on Wednesday June 04, 2025 @10:56AM (#65427139)

    I understand Intuit and others' objections to free tax filing software... I *don't* understand anyone else's objection. The government ALREADY TAKES your tax money away from you automatically (which is the dangerous bit)... Why complain about making it easier for them to give it back to you?

    • Re:Hubub? (Score:5, Insightful)

      by jenningsthecat ( 1525947 ) on Wednesday June 04, 2025 @11:36AM (#65427247)

      I understand Intuit and others' objections to free tax filing software... I *don't* understand anyone else's objection. The government ALREADY TAKES your tax money away from you automatically (which is the dangerous bit)... Why complain about making it easier for them to give it back to you?

      Are you familiar with the neologism "corporatocracy"?

      Basically, we've arrived at a place where the government and the corporations are one mutually fellating body of assholes who consider the populace to be chattel.

      From their point of view the question is "Why not make citizens pay to get their money back?" The broader corollary to that is "Why not extract a toll on every single transaction or interaction between the citizens and the bureaucracy whose thumb they're under?"

      • The broader corollary to that is "Why not extract a toll on every single transaction or interaction between the citizens and the bureaucracy whose thumb they're under?"

        This literally happens every time most people use "tap to pay" instead of cash. The difference is the toll goes to the banks, and not to the government, who might at least spend a few of the dollars on schools and hospitals.

    • The government does not withhold- your employer does. They are required to, so that's one angle where you could say "the government does", but it's not like the Government goes in and takes from your employer's bank account.

      People without employers (self-employed, 1099s) don't have any withholding at all (though any accountant will recommend that they do at least quarterly withholding)

      • though any accountant will recommend that they do at least quarterly withholding

        Quarterly estimated tax payments are required by law and there are penalties for failing to make them. That includes income from things like taxable retirement accounts.

        it's not like the Government goes in and takes from your employer's bank account.

        It will eventually if your employer fails to pay the taxes withheld. But that is between your employer and the government. You will still be credited with the money withheld even if your employer fails to pay.

        • Quarterly estimated tax payments are required by law and there are penalties for failing to make them. That includes income from things like taxable retirement accounts.

          Estimated tax is separate from withholding, and there is a whole flow chart regarding whether or not you need to make estimated tax payments.
          Even if you don't need to make estimated tax payments- accountants will still suggest you withhold, to avoid the mistake if not having the yearly amount when it's due.

          It will eventually if your employer fails to pay the taxes withheld. But that is between your employer and the government. You will still be credited with the money withheld even if your employer fails to pay.

          Sure, after a district court issues a judgement on them being in breach of their legal obligation to pay.
          Unsure what your point is.

          • Sure, after a district court issues a judgement on them

            The IRS doesn't need a court judgement.

            Even if you don't need to make estimated tax payments- accountants will still suggest you withhold, to avoid the mistake if not having the yearly amount when it's due.

            What are you talking about? You mean saving money to pay your taxes? If you are going to owe taxes, you need to make estimated tax payments (with some exceptions). If you aren't going to owe taxes, why would you set aside money to pay them?

            • The IRS doesn't need a court judgement.

              They do if you have a legal department.
              They issue a Notice of Intent to Levy, and you sue to block it.

              What are you talking about? You mean saving money to pay your taxes? If you are going to owe taxes, you need to make estimated tax payments (with some exceptions). If you aren't going to owe taxes, why would you set aside money to pay them?

              Yes, I mean saving money to pay your taxes.
              Not everyone knows if they're going to owe taxes.

              For the case of a 1099 with a regular income, it's pretty easy to know, and to claim otherwise will probably get you in trouble.
              People on AIIM, or for people AIIM doesn't work well for, the fact that you may not be obligated to make an ETP doesn't mean you shouldn't pretend that you're not going to owe taxes. Do

      • Pretty sure 1099's are supposed to withhold as well. My understanding is that if your tax bill due on Apr 15 is more than some percent of what you withheld the IRS can fine you for not withholding enough throughout the year. Govt doesn't want to wait for it's money!

        • Negative. 1099s must be reported to the government if the workers's annual pay exceed some minimum threshold. But no, if someone withholds taxes for contract (1099) work, that's a failure to pay.

          • There is quasi withholding in that the contractor must pay estimated taxes on a quarterly basis. Missing those or underestimating incurs a fat penalty. I've paid it enough times to regularly overpay quarterly now.

    • Re: (Score:3)

      by Sloppy ( 14984 )

      Why complain about making it easier for them to give it back to you?

      Because when Intuit contributes to my political campaign, they tell me they wish it was harder.

    • Re: (Score:2)

      by Himmy32 ( 650060 )
      Politicians object because it would cut into their donations from lobbyists over something that isn't a political wedge issue.

    • The government ALREADY TAKES your tax money away from you automatically (which is the dangerous bit)...

      The government does not take anything automatically. They are wholly reliant on companies, to manually calculate what needs to be withheld and hand that over.

  • Taxes are backward (Score:5, Insightful)

    by FictionPimp ( 712802 ) on Wednesday June 04, 2025 @11:02AM (#65427155) Homepage

    The government has all my info already. They should send me an estimated tax bill/refund. If I dispute it I should be allowed to file my taxes. Otherwise I should just check a box to accept and pay or wait for a refund.

    Most americans have a W2 and that's about it. Most americans take a standard deduction. Only a small percentage of americans need much else.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      Meanwhile the rest of the world sees this and looks bewildered. Most civilized countries figured this out years ago.

    • The government has all my info already

      You'd be surprised how little information the government actually knows about you. Facebook and Google definitely have more detailed information about you than the IRS.

      Take something simple, such as number of dependents. Birth and death records are maintained by the states, and parental records are not associated directly with social security numbers. Further, the state-level records are stored in a bunch of different ways, and there's no centralized federal collection of births and deaths as associated wi

      • Re:Taxes are backward (Score:4, Insightful)

        by FictionPimp ( 712802 ) on Wednesday June 04, 2025 @11:14AM (#65427187) Homepage

        It's a pretty weak argument. You could simply report your dependants on a form and then the IRS can use that for a calculation. It's a trival problem to solve. Hell it could just be reported at the employment level, birth level, or any number of locations. We frequently in american say something is impossible when it's trivial to solve or every other country has already solved it.

        • Re:Taxes are backward (Score:5, Interesting)

          by swillden ( 191260 ) <shawn-ds@willden.org> on Wednesday June 04, 2025 @01:36PM (#65427565) Journal

          It's a pretty weak argument. You could simply report your dependants on a form and then the IRS can use that for a calculation.

          Sure. And on that same form you can also report all of the other details they might not have, like whether you bought an EV or installed home efficiency upgrades that qualify for a tax credit, and what charitable donations you made that are tax deductible, and what your state and local taxes are, and... you get the point. Just to be sure, maybe you should also include the details you're sure they do have. And given that there's some ambiguity in the law about how some of this stuff fits together as well as some choices you get to make, maybe you could also do the calculations.

          You've just reinvented the 1040.

          We frequently in american say something is impossible when it's trivial to solve or every other country has already solved it.

          This one is completely solvable, but the place you have to start is not with the forms and flow of information, the place you have to start is the tax code and the laws regulating what other entities have to report, and are allowed to report.

          For example, consider state and local taxes. Two options: Either you eliminate the state and local tax deduction on federal income taxes or you require all state and local tax entities to report your payments to them. This also means that all of those entities have to have a way to uniquely identify you. We abuse the social security number (which was not intended to be used as an identifier for anything except the social security program) for this, and that's probably fine in this case, though it's also possible that the Privacy Act restricts it in some cases, so the law might have to be tweaked there, too.

          For the charitable donations case, same options: Either eliminate the tax deduction or require all charities to report donations, which will require you to give your social security number to them. I'm not sure how people would feel about having to provide their SSN to Goodwill when they drop off some old furniture.

          Same with EV. If you want to keep the tax credits, auto dealers will have to report to the IRS. At least you already more or less have to give them your SSN.

          Same with energy efficiency upgrades, except that's complicated by the fact that some people buy the units themselves and install them, so Home Depot et al have to begin reporting to the IRS, and you have to give them your SSN, while other people hire a contractor, who will have to do the reporting, and to whom you'll have to provide your SSN.

          And so on across the hundreds, perhaps thousands, of other issues.

          Yes, most people don't have any of these other issues in a given year (except state and local taxes), so a compromise might be a simple system for people who just have W-2 income and take the standard deduction, and no other complications. It's hard to see how it could be simplified for anyone with more complex taxes, though, unless the tax code was overhauled to simply eliminate all of the deductions and credits.

          • That was basically my suggestion. The government assume a standard deduction and basic public records and sends you estimated taxes. You can accept and pay, or file a return.

            For me I'd never need to do anything, every thing I do is already reported to the government and I'd suspect most americans fall into that category. Unless Fidelity isn't telling the government my capital gains.

            • That was basically my suggestion. The government assume a standard deduction and basic public records and sends you estimated taxes. You can accept and pay, or file a return.

              Makes sense.

              For me I'd never need to do anything, every thing I do is already reported to the government and I'd suspect most americans fall into that category. Unless Fidelity isn't telling the government my capital gains.

              Could be worse than that. One year I had a problem that my brokerage reported all of my gains but failed to report the cost basis. This was on a bunch of Restricted Stock Unit sales which happened automatically when the stock vested, so the actual capital gains are always very close to zero, since the sale occurs minutes after the vesting. But from the 1099-B it appeared I had 100% gains on a bunch of stock sales that approximately equal my annual salary (about half of my income is stock). Wors

        • This info is already recorded on a W-4 when you start a job or should be updating when you have a life status change, birth, death, marriage or divorce. If employers aren't sending this to the IRS already I would be shocked. It's the whole point of having the standardized form.
          • And annual submission of that information, via a tax return, verifies it is correct.

            Unless you are audited, the IRS really does not have that much information about you other than what you tell them and the limited info they get from employers, banks, and investment firms.

      • Re: (Score:2)

        by spitzak ( 4019 )

        The number of dependents is put on the form you fill out to set up withholding.

        The government also obviously knows it. If you could write any number of dependents on your tax form then the IRS would think the population of the USA is a few billion, 80% children.

        • You can write down any number, and your employer will calculate withholding appropriately.

          The problem is paying the piper at the end, because you will not get away with it, and if they can prove intent, rather than just seizing every bit of property you have to pay the bill, they will put you in Federal prison.
          But until someone audits it- life will go on, swimmingly.

          The US Government doesn't have that information readily available. It requires work to collect it. That's what we have a trust-and-threate

    • Re: (Score:3)

      by evanh ( 627108 )

      This works in my country but it's a small country with decent social safety nets. And yes, it's a done thing for some years now.

      Most everyone has a bank account and everyone is paid via direct credit. These two points makes automating tax accounting a whole lot more possible. It's tricky for long term prison inmates arriving back into society. One of the first hurdles is for them to get a bank account.

      • one of the first hurdles is for them to get a bank account

        "Your honor it is such a tough hurdle that I decided to go into other people's accounts"

        "Using a tunnel, that leads to the vault. Which brings us here, now, in this courtroom."

    • This is exactly the type of tax system we should have. Most of the population are W2 workers, having taxes deducted by their employer every pay period and claiming standard deductions and could simply accept this notice and pay what they owe or accept the refund. For those who are 1099, cash earners, or W2 workers with 1099 or cash earning side jobs then you can go file the 1040.

  • Ummmm.... (Score:3)

    by jd ( 1658 ) <imipak@yah[ ]com ['oo.' in gap]> on Wednesday June 04, 2025 @11:47AM (#65427279) Homepage Journal

    I can't think of a single other country that claims to be civilised that has a tax code so complicated you need vast amounts of software and a high-power computer just to file what is properly owed.

    TLDR version: The system is engineered to be too complex for humans, which is the mark of a very very badly designed system that is suboptimal, inefficient, expensive, and useless.

    Let's pretend for a moment that you've a tax system that taxes the nth dollar at the nth point along a particular curve. We can argue about which curve is approporiate some other time, my own opinion is that the more you earn, the more tax you should pay on what you earn. However, not everyone agrees with that, so let's keep it nice and generic and say that it's "some curve" (which Libertarians can define as a straight line if they absolutely want). You now don't have to adjust anything, ever. The employer notifies the IRS that $X was earned, the computer their end performs a definite integral between N (the top of the curve at the last point you paid tax) and N+X, and informs the employer that N+X is the money owed for that interval.

    Nobody actually does it this way, at the moment, but that's beside the point. We need to be able to define what the minimum necessary level of complexity is before we can identify how far we are from it. The above amount has no exemptions, but honestly, trying to coerce people to spend money in particular ways isn't particuarly effective, especially if you then need a computer to work through the form because you can't understand what behaviours would actually influence the tax. If nobody (other than the very rich) have the time, energy, or motivation to find out how they're supposed to be being guided, then they're effectively unguided and you're better off with a simple system that simply taxes less in the early amounts.

    This, then, is as simple as a tax system can get - one calculation per amount earned, with no forms and no tax software needed.

    It does mean that, for middle-income and above, the paycheck will vary with time, but if you know how much you're going to earn in a year then you know what each paycheck will have in it. This requires a small Excel macro to calculate, not an expensive software package that mysteriously needs updating continuously, and if you're any good at money management, then it really really doesn't matter. If you aren't, then it still doesn't matter, because you'd still not cope with the existing system anyway.

    In practice, it's not likely any country would actually implement a system this simple, because the rich would complain like anything and it's hard to win elections if the rich are paying your opponent and not you. But we now have a metric.

    The UK system, which doesn't require the filling out of vast numbers of forms, is not quite this level of simple, but it's not horribly complicated. The difference between theoretical and actual is not great, but it's tolerable. If anyone wants to use the theoretical and derive an actual score for the UK system, they're welcome to do so. I'd be interested to see it.

    The US, who left the UK for tax reasons (or was that Hotblack Desiato, I get them confused) has a much much more complex system. I'd say needlessly complicated, but it's fairly obvious it's complicated precisely to make those who are money-stressed and time-stressed pay more than they technically owe, and those who are rich and can afford accountants for other reasons pay less. Again, if anyone wants to produce a score, I'd be interested to see it.

    • All you should need is a web browser.

    • Re: (Score:2)

      by PCM2 ( 4486 )

      I can't think of a single other country that claims to be civilised that has a tax code so complicated you need vast amounts of software and a high-power computer just to file what is properly owed.

      I think it's pretty similar in Canada, although I can't speak to the comparative levels of complexity. One reason is that, like the U.S., many powers are held by the federal government, while others are exclusive to the various provincial governments. A notable example is the provinces' ability to levy taxes in addition to federal ones. There may also be other provincial records that the federal government does not have direct access to, such as marriage records.

    • Re: (Score:2)

      by Himmy32 ( 650060 )

      I can't think of a single other country that claims to be civilised that has a tax code so complicated you need vast amounts of software a

      Then you might find this paper about the French tax code compiler interesting [arxiv.org]

    • TLDR version: The system is engineered to be too complex for humans, which is the mark of a very very badly designed system that is suboptimal, inefficient, expensive, and useless.

      That's only true if you assume the purpose of the tax code is to spread the cost of operating government fairly across the citizenry. That's not the case, at least in the USA. Here, the tax code is designed to shift the tax burden away from the class which writes tax code (politicians and people wealthy enough to make those politi

    • The point is that the tax code is contradictory so if they want to prosecute YOU they absolutely can.

      It's how they got Al Capone and they've indicted Roger Ver for daring to say Bitcoin is broken by making up completely novel and new interpretations of tax code never before applied to anybody, much less a former citizen, and that's after he asked them how much he owed and paid it.

      At the same time Trump is investing in BTC in his businesses and needs NGU.

      Three things are inevitable: death, taxes, and corrupt

    • I can't think of a single other country that claims to be civilised that has a tax code so complicated you need vast amounts of software and a high-power computer just to file what is properly owed.

      While it is a good story, sorry - I used to do my taxes by sitting there with a calculator, the guide and a pen and paper to fill out the form. And ask anyone here - I'm a fscking idiot!

      TLDR version: The system is engineered to be too complex for humans, which is the mark of a very very badly designed system that is suboptimal, inefficient, expensive, and useless.

      Actually, many humans do their taxes manually. I don't any more, because the pittance I pay to TT is hella less than my hourly burn rate. But I could if I wanted to. They file my fed and state taxes for me. But yeah - I have investment properties, oil properties, W2's and 1099 miscellaneous, so it is a bit more complex tha

    • I can't think of a single other country that claims to be civilised that has a tax code so complicated you need vast amounts of software and a high-power computer just to file what is properly owed.

      Actually there's many countries where the tax code is this complicated, in some cases even more so. The difference is that other companies have automated the process on the onset. Much of what you dedicate your tax return to doing I received pre-filled. Our tax code is no simpler, it's just the government did the homework for us (as they do for you anyway when you file your tax return or get an audit) and the only thing we're left with is filing information that the government doesn't know.

      I don't tell the

  • The way to fight this. (Score:5, Insightful)

    by Holi ( 250190 ) on Wednesday June 04, 2025 @11:59AM (#65427311)

    Everyone complete paper forms for their taxes. Paper returns are harder for the IRS and cost them more. If people boycotted the expensive software options for one year and slammed the IRS with paper forms, this would be reversed post haste.

    • I like your idea, even more so since I already file paper returns and so it would cost me no extra effort.

    • Re: (Score:2)

      by Sloppy ( 14984 )

      If people boycotted the expensive software options for one year and slammed the IRS with paper forms, this would be reversed post haste.

      If we did that, do you know how much it would inconvenience every House member and Senator?

      None at all. Their lives will be as damaged as a bulldozer that just ran over Arthur Dent.

    • Re:The way to fight this. (Score:5, Insightful)

      by swillden ( 191260 ) <shawn-ds@willden.org> on Wednesday June 04, 2025 @01:51PM (#65427609) Journal

      Everyone complete paper forms for their taxes. Paper returns are harder for the IRS and cost them more. If people boycotted the expensive software options for one year and slammed the IRS with paper forms, this would be reversed post haste.

      Or you could just fire most of the IRS staff and reduce their capacity that way... which the party currently in charge is already happily doing, so I'm not sure why you think reducing their capacity by burying them in paper would cause a reversal. It would just make it even easier for wealthy people with long, complicated returns to cheat outrageously, confident the IRS doesn't have the capacity to audit them. That is the GOP's goal.

    • this would be reversed post haste.

      Nice theory. In reality the government would cut spending on social programs and fund the IRS to clear the backlog to make sure the rich people get their deductions back while giving yet another reason to fuck the poor.

  • The IRS is funny. I chose not to take advantage of those payments they were giving out so they just said "F#$! it!" and sent me $1400.

    I still don't like them.

  • Good-ish (Score:3)

    by MBGMorden ( 803437 ) on Wednesday June 04, 2025 @01:25PM (#65427537)

    I mean, its good, but the reality of tax filing software is that it needs consistent yearly updates to contend with policy changes. I'd wager that the maintenance work on such things probably outweighs the baseline source-code of getting something working in a general sense.

    Plus most Americans also have to deal with filing state income tax too which I wouldn't guess this would handle, and will require much more effort to handle since you're dealing with 41 more different sets of laws that change annually (9 states don't do state income tax).

    All in all though, Turbotax. Even as is they're too expensive. There are other companies out there that will do the same thing for cheaper. For a while I used TaxAct - recently I've switched to Tax Slayer instead.

  • Repo URL (Score:5, Informative)

    by Gravis Zero ( 934156 ) on Wednesday June 04, 2025 @01:25PM (#65427539)

    The URL for the git repository is: https://github.com/IRS-Public/... [github.com]

    • Nice touch. Given the way things are going, I'd be interested to see a F/OSS inspired attempt to build a practical replacement for the broken & corrupt parts of the US government. I don't know how it would work. It would take a lot of dedicated and intelligent people working together effectively, even knowing how badly the odds are stacked. But sitting around hoping that someone else will get it done probably won't end well.

  • I didn't use FreeFile for 2024 so I don't know what it offered. But I have used both Intuit and HR Block free version to file federal and state taxes for years. Only thing that sucks are the incessant dark patterns trying to push you into a paid tier of service.

    So what was FreeFile offering that didn't already exist? Did it cover more situations for free than the commercial options?

    • Re: (Score:2)

      by Pascoea ( 968200 )

      So what was FreeFile offering that didn't already exist?

      I didn't have "the incessant dark patterns trying to push you into a paid tier of service." which analysis showed was very successful into "tricking" people who should have qualified for free service into coughing up money.

  • The hard part is the data that goes into it, and the infrastructure that hosts it.

    Open-sourcing the code makes 10% of the work easier to finish, should someone want to use it to provide their own competing tax software.

  • OK, open sourced. Where? I can't find a single link to the repository &#191;?

  • Taxation is theft.

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