Sounds like a business opportunity.
In 2021, I filed my 2020 taxes, and a few months later I get a letter from the IRS saying that I owed $8000 because I forgot to report a large stock transaction. I owed $7000 + a $1000 fine.
I wasn't mad at all about the $7000, I definitely owed that and it was just an oversight on my end, these things happen, and I was able to get the fine lowered by calling the IRS [1], so that wasn't a huge deal .
What did annoy me was why do I have to do anything? If the IRS knows about the transaction and is able to complain about me not paying enough, that suggests that they already have the information that I'm sending them. Why make me buy software and copy information from a piece of paper into that software, just for the IRS to check it against the numbers that they already have?
I understand that you might need to issue corrections, and maybe the software should exist for something like that, but it doesn't seem like it should exist otherwise.
[1] Who at least in my case was actually really polite and helpful! I had heard horror stories but that was definitely not the case for me. The people I talked to were very sympathetic and nice.
You mistakenly assume that simply knowing what is on the 1099-B form is sufficient to determine your tax on the gain. They don't know if you are married or single or head of household (filing status) in the current tax year. They don't know what some of your itemized deductions and other income not reported to them might be (which in turn, along with filing status, determines what marginal tax bracket you are in). They don't know if you are actually just a nominee for someone else's income. These are just a few examples. They don't know any of this stuff until you tell them by filing your complete return.
I think you're misinterpreting the GP's point. Clearly, at least in our current system, it is essential to tell the IRS the parts of the return that they don't already know such as what are your expenses, deductions, marital status, etc.
But the absurd thing is that the capture of the IRS by the paid tax prep scammers has prevented them from simply showing you what's on your tax transcripts and having you click "Agree" or "Modify" for each one. Instead, you get your own copy of the 1099-B, 1099-DIV, 1099-INTs, and are administered a pointless "honesty test" to see if you'll type in the same numbers they have, or be automatically punished.
Obviously, Direct File was ideally situated to offer this feature since IRS has the data themselves, and simply populating the numbers is a highly efficient way of ingesting the data into your return.
Under Biden, the IRS tried to make w2s and 1099s available. If you log into the IRS website with your information, you can download the w2s and 1099s the Service has in your name.
Antitax activists have fought these steps every step of the way because the less annoying tax filing is, the less people will buy their antitax arguments.
The IRS isn’t captured by these predatory tax preparers, Congress is. The IRS can’t do a lot on data without Congress specifically authorizing it. And the Republican Party is in bed with the antitax activists who are in bed with the tax preparation companies.
Use Form 4506-T to request them.
(They can detect that you had a sale for which they got a 1099-B but you didn’t list on your Schedule D. That doesn’t mean they have enough information to fix it.)
> It takes an average American taxpayer 11-13 hours to prepare their taxes, according to the IRS.
I'm not doing anything clever to try and lower my tax burden, it's an extremely straightforward "run it through tax software" process, and it still took me two hours.
There are two reasons. 1) Because Intuit owns enough reps to keep their business existing. 2) They have a fairly easy time doing that because the Republican party explicitly believes that taxes should be painful to discourage America from having functioning taxes.
All the "IRS might not know everything about you" is distraction. That's not a problem in any of the countries that have no trouble sending you a preliminary document for you to amend or accept. It's FUD.
For a long time the IRS was literally barred from doing what TurboTax does.
You pay the bill they send you, you are done.
I have a reasonably simple personal economy and it takes me all of five minutes to file my taxes in Sweden. My parents have a much more complicated setup (small private business, own a couple of properties, several deductions, etc.) and it basically is pretty straight-forward for them as well, certainly they don't need an accountant.
TurboTax, Intuit and anti-tax Republicans has really fucked with the US expectation of how complicated taxes needs to be.
Yes, keep telling yourself they don't (for what it matters)
In fact if you get a W2 the IRS already have it
Just think what someone with a gazillion dollars, some trusts, and "charitable foundations" could do.
But if by law something needs to be known by the government: just go for it
A silly analogy: your medical info is private, but it's in your best interest that a condition like 'diabetic' or 'allergic to something' have a lower level of privacy
> But if by law something needs to be known by the government: just go for it
This seems a bit flipped, the only reason something needs to be provided to the government “by law” is that we’ve passed a law that says it needs to be. That it is required by law is not a reason for it being required of course, that’s circular. The reason the law was passed is because we decided it was in the public interest for the government to collect that data.
If we decided it was in the public interest to collect more income info about wealthy people, then we could make that required by law. I think the comment you responded to is suggesting that we should change what is required by law.
Your analogy is better. There’s a reason you might be ok with less privacy there.
Every company has to file tax returns and pay employee taxes already, and employs accountants and finance people for that purpose.