To Fight $5.2B In Identity Theft, IRS May Need To Change the Way You File Taxes 410
coondoggie writes: Based on preliminary analysis, the Internal Revenue Service (IRS) estimates it paid $5.2 billion in fraudulent identity theft refunds in filing season 2013 while preventing an additional $24.2 billion (based on what it could detect). As a result, the IRS needs to implement changes (PDF) in a system that apparently can't begin verifying refund information until July, months after the tax deadline. Such changes could impact legitimate taxpayers by delaying refunds, extending tax season and likely adding costs to the IRS.
Did you find that hard drive yet? (Score:5, Insightful)
Sorry, it's going to be a long time before anyone believes anything the IRS says again.
Re: (Score:2, Informative)
Blaming the IRS is a perfectly acceptable American past time.
Not to mention that they actually violated federal law by not having the backups, and that this failure mysteriously affected only the specific people Congress wanted the data from. I'm no tin foil hat-wearing crazy, but even I have to call bullshit on this whole thing.
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I have a trouble with the word "they". I grant that certain individuals violated laws and should be prosecuted. I deny that an organization is a self-willed entity. (I also don't believe that corporations are people.)
So. People at the IRS violated laws is a reasonable statement. The IRS violated the law is nonsensical. (Note also that the second form also turns some particular laws into a general generic "the law". Another piece of fallacious reasoning...and an increasingly common usage.)
Simplify Taxes (Score:5, Insightful)
How about we simplify taxes so there's no need to issue refunds in the first place?
Re:Simplify Taxes (Score:4, Funny)
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"Then how will people get all their tax credits, like earned income? How would you take into account deductions that don't take place on a regular or known schedule? E.g., I gave $1000 to the Red Cross in December of last year, how does that get entered on my W4 in time to make any difference? When I see a simplification that doesn't wind up costing the middle class (me) more money, I'll support it. I've run the number for the 'fair tax' and it really ain't."
Middle class income and tax/earned income credits
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Middle class income and tax/earned income credits? On what planet!?
On planet Earth, in the USA, we have both middle class income earners and people who make so little that they get to classify their rent and other payments as "earned income tax credits". Those middle class people also get some tax credits, like the ones for installing energy efficient whatsits or getting rid of the clunker cars.
I don't think you know what the word charity means.
There is a reason that charitable deductions exist, and if you don't understand why then you shouldn't be discussing tax policy.
Re:Simplify Taxes (Score:4, Insightful)
Or how about we get rid of all the stupid tax credits in exchange for a lower base rate... You are probably going to give your $1000 to the red cross anyways. If you pay a tax rate of 20% and you get a $1000 deduction, then the govt gives you back $200. You are still out $800.
Now you say that because the government won't give you $200 back, you will only donate $800. However, if the lower base rate gives you the extra $200 as disposable income without having to file the paperwork, then why wouldn't you give it to the Red Cross like you wanted to do before? If the answer is you are going to take the extra $200 and spend it on hookers and blow, then that's on you, not the government.
Personally I like the Fair Tax proposal. Consider this... do we really need to have an entire industry devoted solely to reducing people's tax burdens?
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You sign when donating to say that you paid tax on the money you donated and the charity gets the tax refund, increasing the value of your donation
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You aren't going to "keep" any of your money.
You win the pedant of the day award. Ok, here's a better way of putting it. Why should I pay taxes on money that I'm not getting to put in savings or exchange for goods or services that I get to keep and/or use? Most people would call that money which is not taken from them by the government what they get to keep, but I guess you're not one of them.
Sooner or later. Money isn't for keeping.
There is a natural time frame for talking about "keep", and that's a tax year. I have lots of money that I've kept a lot longer than a tax year, so yes, money
Or just get rid of all income taxes (Score:2, Interesting)
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That's how the Kryptonians ended up in deep shit.
Thus the problem with the TEA party (Score:5, Insightful)
..and really all of the "simple" solutions. It seems like a good idea - just don't spend that $1 Trillion and we can drop our taxes by $1 Trilllion. Except that economies don't really work that way. You can't add or subtract a trillion dollars like that and expect things not to spiral out of control.
Remember the recession that freaked out the entire world? Remember the job losses, the stagnation of the economy, and the general feeling that the world would end? We lost 8.8 million jobs, most of them paying $14-21/hr (if wikipedia is to be believed). Do you know how many jobs $1 Trillion dollars pays for? About 18 Million - more than double what was lost in the great recession.
"But wait," I hear you cry, "that trillion dollars would still be spent by the people who wouldn't have been taxed!" Oh, that's partially true. Understand that 40% of that money would go to multi-millionaires who's purchasing habits generally are not affected by their income. The other 60% probably would be spent, but that 60% would be spent on goods and services in an economy which has almost zero overlap with the manpower which would be idled by the drop of $1T in defense spending. Those are soldiers, intelligence report creators, bomb makers - not really things you purchase in your every day life. And because you can't train and re-purpose people fast enough to build the TVs and tablets and cars and hotel staff to pick up the increase in demand, the prices for all those products would increase. And because of the numbers, dropping the US income tax would result in a net increase in take home pay of about 4%-5% for most people in the middle class (Say, $60-80,000 annual household income) or about $50 a week.
So you're magical tax-free utopia would end up with 18 Million people out of work and without the skills needed to change jobs, inflation in the disposable goods and discretionary services market, and a net effect of $50 a week in the pockets of the people who still have jobs.
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"But wait," I hear you cry, "that trillion dollars would still be spent by the people who wouldn't have been taxed!" Oh, that's partially true.
Its completely true unless you subscribe to the under-the-mattress fallacy.
Understand that 40% of that money would go to multi-millionaires who's purchasing habits generally are not affected by their income.
I see. You are a subscriber. Yes, rich people when they get money stick it under mattresses in order to deny the money from the economy, and this is believable in spite of the fact that rich people are rich because they dont do stupid shit like that.
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Or, they could invest that money abroad, China perhaps, where it is effectively denied from the US economy.
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I was going to down vote you but I thought better to reply.
It has been proven time and again that a person on the low end of the scale will spend a greater portion of their salary on day to day purchases than a rich person.
Do you really think if you gave a man like Larry Elison $1000 or $1M or $10M that he is going to run around like a kid in a candy store and spend it on daily needs? Most likely he WILL stick it under his mattress or something similar because at a certain point you don't need more.
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Actually, I know quite a few people in that boat. Most of them do "invest" their extra cash because they don't have a need to spend more than they currently are. They don't live paycheck to paycheck, that money just goes into their investment portfolios (which, in a way, is "spent" but in reality is just changing hands with other investors who are moving elsewhere). It definitely doesn't buy bombs or planes or fatigues or army personnel.
Will they spend some of that 40%? Sure. Will they spend all of it? Not
Solution (Score:5, Insightful)
End income tax.
No more tax returns. Only tax based on use (i.e. Sales Tax) Problem solved in one fell swoop.
Tax evasions now impossible and you encourage people to invest rather than spend.
Oh wait, that's right, we have an entire industry run by blood sucking vampires that need the current system to remain as confusing as possible.
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Right off the bat, I see sub rosa barter as the form of evading consumption taxes.
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It is impossible. I am not aware of any merchants that dodge sales tax, but if it is a problem start imposing fines on merchants and book them for tax evasion. Number of merchants is obviously less than number of citizens. Since this is federal taxes, pass a law mandating online merchants (and online middlemen) to impose the tax too. It should be quite easy actually. Merchants already have systems that deal with sales tax (in most of the states atleast)
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Not for nothing, but many small merchants dodge sales tax regularly.
There are also numerous merchant cooperatives that swap goods and services already.
By the time you hit multi-store or regional, this largely ceases to be possible (or worth the time compared to managing a multi-site business), but it certainly happens with businesses still on the Quickbooks level.
Re:Solution (Score:5, Interesting)
It is impossible. I am not aware of any merchants that dodge sales tax,
It is quite possible, and if you raise (or create) a sales tax in the amount you'll need to replace the income tax you'll see a lot of them doing it -- because the customers will want it.
If the sales tax is 4%, it's not worth it. When the sales tax goes to 20% or more, look out. Why do you think there is illegal cigarette traffic, because you can't get the smokes that taste right? Or is it tax-stamp created?
You'll also immediately get calls for the return of a tax on those awful rich people who are now avoiding taxation on their luxurious incomes because they don't spend most of it, while the poor folks are stuck paying taxes on every penny they earn because they have to spend it all to get by. Then you'll get a demand for some kind of tax credit for the poor, which will require an IRS and that awful paperwork you're trying to get rid of.
You'll see charity as we know it drying up because there will be no tax benefit to it, and people who could afford to buy a house because the mortgage interest was deductable won't be buying houses.
In fact, all of those social engineering projects that our tax code has been used to promote will go away. At least until you create a paperwork nightmare just as large as the existing one to bring them all back.
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No, that's a terrible idea. With income tax, you can lighten the tax burden on those most affected by using tax rates that scale with your income. If everyone just pays a flat sales tax rate, the poor bear most of the economic burden. Plus, if we eliminate income tax, we have to raise sales tax to cover the deficit, so pretty soon we'll all be paying 20% (or higher) sales tax.
Think of it this way; if you make $24,000 a year, a 20% tax that reduces your income to $18,000 a year is a much greater burden than
Re:Solution (Score:4, Funny)
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Don't tax food or medicine. OK, the discrepancy just halved.
Except that the government will just increase taxes on other common goods to make up for the shortfall.
Your problem is that you missed the most important sentence in OP's post:
if you make $24,000 a year, a 20% tax that reduces your income to $18,000 a year is a much greater burden than it is to someone who makes $200,000 a year and has their income reduced to $150,000 a year.
With a "flat tax," there isn't any way around that issue.
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Except that the government will just increase taxes on other common goods to make up for the shortfall.
So? Low income people still spend a lower percentage on their income on those "common goods" than the wealthy.
You are also missing out on the idea that capital gains will be taxed at the same rate as income. For that matter, all income will taxed at the same rate, so even if you work "under the table", you will still pay taxes.
With a "flat tax," there isn't any way around that issue.
There are lots of way
Re:Solution (Score:4, Insightful)
Except that the government will just increase taxes on other common goods to make up for the shortfall.
So? Low income people still spend a lower percentage on their income on those "common goods" than the wealthy.
Actually, the opposite - low income people spend less dollars, but a larger portion of income, on those items than rich people. Plus, you really can't limit spending on "must-have" items like food, shelter, utilities, etc.
As OP stated, and I already repeated, a 20% tax on a $20,000/yr income is a much larger chunk of income than a 20% tax hit on a $200,000 income.
With a "flat tax," there isn't any way around that issue.
There are lots of ways around the issue.
You could tweak the system further.
Then it's not a "flat tax," it's a graduated tax system, like the one we already have.
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The simple answer is to exclude necessity items from the flat tax.
Any WEC-eligible food item, for example, could easily be tax exempt with minimal reworking of the system, as could, say, any traditionally medicare covered medical or dental service, uniform sales, etc.
I recognize this opens the door to loophole items into tax exemption, but while we're spitballing utopian tax systems, might as well start somewhere.
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Don't tax food [...]
Having been to the US on occasions, I'd question just what would be exempted by that statement.
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Most states do this. Back when I was a checker at a grocery store about 30 years ago, we had to learn what food is taxed and what food is not. For example:
"Juice" products, those that contain nothing but fruit or vegetable juice, are tax free.
Products labeled "drink" or "punch" are taxable.
All non-processed food was non-taxable.
Anything you cook at home was non-taxable. This includes frozen meals such as TV Dinners or frozen pizza.
Canned goods were non-taxed.
Potato chips, candy, and other "junk" food is
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Don't tax food or medicine.
States that have different tax rates on different goods already face this problem and demonstrate that it isn't as easy as you want to pretend. What is "food"? Is it fair for a poor person who works two jobs and doesn't have time to cook for himself to be paying taxes on prepared food while the idle rich guy can buy caviar and lobster tails with no tax at all?
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And yet somehow the state of Minnesota (and many other states) manage to define "food" and "clothing" in such a way as to result in zero sales tax being applied to those purchases day after day.
Well, yes, by their definition of "food", "food" is not taxed. It is a tautology. They define food this way: [google.com]
So, if your dinner consists of what the common man calls "food", and you run through the drive-through on your way from one minimum-wage job to the next and pick up a Big Mac and a soda, you pay sales tax. That's a swell definition of "food" for someone who doesn't have time to cook his own,
Re:Solution (Score:5, Informative)
If you make $24k a year, you don't pay income tax and most likely get a nice wad a cash courtesy of the U.S. Tax payers.
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Thats not actually true, though it could be if you hit all of the tax incentives. Even at 10k income you're still getting some tax (though again, there are probably a lot of ways to reduce the burden to $0).
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The Fair Tax (one sales tax proposal) fixes this by giving a stipend to everyone that's equivalent to taxes paid on necessities. So someone that makes at or below the poverty line will essentially pay no taxes (I don't remember what the exact number is, but I think the stipend was $5Kish, tied to inflation, of course), and someone who makes $200K will pay significantly more, but have the $5K they spent on necessities or so refunded.
Also, your percentage math is a bit off.
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Ah yes, I see you are familiar with the elementary principle of tax progressivity.
News flash. You can make consumption taxes just as progressive as you wish. The most trivially obvious measure you can take toward this end is to exempt clothing and food expenses. Most state sales taxes do at least some of this. Clothing and food you buy simply ring up as untaxed on the register.
You can go well beyond this, too. Issue rebates, as inversely progressive as you wish. You pay a small amount of sales tax during th
Re:Solution (Score:4, Interesting)
Think of it this way; if you make $24,000 a year, a 20% tax that reduces your income to $18,000 a year is a much greater burden than it is to someone who makes $200,000 a year and has their income reduced to $150,000 a year.
Good! Those making $24,000/yr will finally understand that government money is not free. Then you won't have the problem of people who don't pay taxes voting to raise the tax rate on those that do. Also, if you make $24,000/yr, most of your money is going to food and rent, both of which can be made to be non-taxable.
A sales tax is still going to a progressive tax since things like food, school supplies, and other absolute necessities won't be taxed at all. See, people only spend so much money on necessities, no matter how much they make. Sure, a billionaire might spend $5 million on a house, but his grocery budget is not going to be 50x more than the guy who spent $100K on a house. So low income people will spend a larger percentage of their income on non-taxed products, meaning they will pay a lower tax rate than the guy who eats out twice a day.
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Then you won't have the problem of people who don't pay taxes voting to raise the tax rate on those that do.
Sweet. Now how about the problem of rich people paying for congressmen to lower their taxes? The super rich already got their effective income tax lowered to ~15% as is, whats going to stop them from finagling a $5M house exemption?
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Finally! Because you know your income level obviously proves that you're horribly ignorant! You tell 'em, bub!
Because that's what's happening, right. The greedy, selfish... how have I heard it put... "parasite" poor bastards! You gotta make 'em SUFFER what it means to be poor!
Re:Solution (Score:5, Insightful)
gas is taxed.
repairs are taxed
registration is taxed.
Why wouldn't the sale of a car be taxed?
How about clothing? Need clothes to live, right?
Nope. If it makes you feel better, you could make school kids clothing tax free, or only make new clothing taxable. If you don't want to pay the tax, buy second hand.
Now Paris Hilton can buy 400 pairs of shoe tax-free!
So? Why do you care what Paris Hilton does? See, that's the problem. You are so damn worried that a rich person might save $80 on a pair of shoes that you want EVERYONE else to go through hell so a rich bitch won't save a buck.
Watch out for that slippery slope you're on.
Odd. Nearly everyone of the 50 states has programs like this and they don't have a problem. Were you referring to the "slippery slope" fallacy?
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This is kind of a corollary to something that's always bothered me.. people tend to get so uptight over an individual bilking the system for 80 bucks or a couple packs of smokes/booze -- but do not seem to have the same level disdain for the amount of bilking that raytheon or boeing engage in.
Similarly, if someone is worried about the small potatoes tax evasion that someone like ms hilton is able to do -- shouldn't you be rioting in the streets over what MS, Apple, Cisco etc are pulling?
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Mortgage payment do come with the purchase of a House, which does have a sales tax.
As are cars, boats, planes, etc.
Curious, how would you view/tax people that have gazillions, but live modestly?
Hell, Sam Walton drove a fricken 20 year old truck until his family convinced him to get a new one...he got an F-150.
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someone who makes $200,000 a year does not spend it all in a way that would be subject to a sales tax.
All money is spent eventually. Even if you die and leave it to someone else, it will get spent by them. When it is spent, it is taxed.
Savings / Investing is not subject to a sales tax.
Nope, but it will be spent eventually. All money is spent eventually. As a bonus, the capital gains/interest earned will be taxed at the same rate as the rest of the money. Currently, capital gains and interest income h
Re:Solution (Score:4, Informative)
Tax evasions now impossible
You really undermine your own position when you make farcical statements like that. I would say the overwhelming preponderance of Americans on this site are already evading their state's use tax. Did you remit your sales/use tax due for all your online and other purchases across state lines last year?
As for sales tax evasion, well, it already happens today. The IRS would just use it as an excuse to further demand all of our financial transactions. The feds already got 80% of the whole country's personally identifiable credit card transactions last year (for the purposes of protecting us from fraud, of course, *cough*). Next up in your scheme: "friendly visits" from IRS agents who will graciously allow you to prove your innocence if you like to use cash more than they believe you should!
Despite all that, tax evasion will thrive via black markets.
You either had a failure of imagination or you are just too excited about your proposal.
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I only single-out pawn shops because everything in the store is used and usually one negotiates a price. This could happen just as easily in a small shop with an owner-operator, with new merchandise, so long as he can cook the books enough to be beneficial for himself witho
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Yard sales.
Nobody remits taxes on yard sales.
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You normally don't need to, because you're not profiting on the items being sold. The only exception would be if you were selling collectibles or some investment item that went up in price, and that's rarely sold at a yard sale.
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The only exception would be if you were selling collectibles or some investment item that went up in price, and that's rarely sold at a yard sale.
You must not frequent yard sales, as in reality tons of incredibly valuable collectables are sold at them every weekend - but for far, far less than the item's actual value.
Of course, all that is unimportant (from a legal standpoint), because the fact remains that somebody is profiting, and nobody is paying taxes on those transactions.
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Whoops, sorry, I think I was mixing up sales tax and income tax. Discussion of the profit is totally an income tax thing. I don't have any sense of how sales tax applies.
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I don't have any sense of how sales tax applies.
Yea, be glad for that. I recently started my own business doing contract work in no less than 4 states, and the differences in how sales tax applies in each is already a huge pain in my ass.
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It's usually not worth it on small purchases, but with bigger ticket purchases I will often ask for a cash discount. Sometimes they counter for less than 3% and then I just lay down a credit card and say "No, thanks, I'll take the credit card points". Some are smart enough to give me the 3%, but I'm more than happy to have them eat the 3% and take the points.
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Technically, if we're going to bother considering what the U.S. Constitution has to say on the matter, a sales tax is not authorized as it is not a tariff, excise tax, or income tax - the only three taxes currently authorized.
As an aside, I find it interesting that parent comment gets voted up while A.C. comment directly above it gets voted down into oblivion. I guess the current crop of slashdot mods prefers unconstitutional sales tax to world peace.
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Technically, if we're going to bother considering what the U.S. Constitution has to say on the matter, a sales tax is not authorized as it is not a tariff, excise tax, or income tax - the only three taxes currently authorized.
As an aside, I find it interesting that parent comment gets voted up while A.C. comment directly above it gets voted down into oblivion. I guess the current crop of slashdot mods prefers unconstitutional sales tax to world peace.
Actually, based on the comments above mine I'm kind of surprised I didn't get modded troll as well. But this wouldn't be the first time I got a +5 insightful comments with hundreds of replies that within hours turned into a troll comment. Keep in mind, on slashdot Troll = I disagree ;-) and often people don't disagree until your comment rises due to up-modding.
Re:Solution (Score:5, Interesting)
End income tax.
Better idea: revert the legal definition of "income" to what it meant pre-1913.
Interestingly, before the oft-questioned "passage" of the 16th Amendment, "labor given in exchange for payment" was just that; income was what a business earned as a result of selling a product or service.
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Tax evasions are possible with the so called "Fair Tax" or "Sales Tax" as you call it. Rich people may find it much cheaper to buy expensive items overseas or in Canada or Mexico and ship them to the USA.
Ok, I randomly picked you to reply to out of all the people that seemed to want to focus on that one part of my statement. Yes, tax evasions always possible. People don't declare their yard sales after all. But your suggestion of buying things over-seas? No, that's not as easy as it sounds. You can't just buy something overseas and not have the US government find out. It's possible in other countries, but in the US you cannot get a credit card that wont declare your purchases to the feds. Prepaid cards don'
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I prefer LVT (with exemptions for a home and a small bit of farmland).
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Too complex - there's no need for taxation anymore. It's all a holdover from real money. With fiat currency (since 1971) the government can just print as much money as it needs. The personal income tax raises about $400 billion, which is only about 10% of the budget.
The only reason for taxation in 2014 is to show that the labor of "citizens" is collateral for the borrowing of the Federal government. But with debts > 1x GDP and unfunded mandates in excess of 10x GDP, even that appears to be unnecessar
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Quite impossible. If I privately sold you a LP record for $20 cash, how is the IRS going to trace that? Or what if we traded, a LP worth $20 fair market for a LaserDisc worth $15 fair market? They can't track these kinds of transactions now, and they won't be able to no matter what. Tax evasion would skyrocket if you go to a use/sales tax.
Income tax is actually pretty good. What's bad are the complex web of deductable items. A non-discriminatory revenue tax, with no write offs, would be perfect. And if you
Apt Tax (Score:5, Insightful)
We don't need more rules, more laws, more agents (that cost a shit ton of money at work and in retirement), more jails.
Just banish most taxes, simplify the system to a low rate transaction tax, don't deal with deductions or deciding which charities or legit or not (tax would be too low to matter in individual cases), stop caring if business are on shore or offshore or if couples are married:
http://www.apttax.com/ [apttax.com]
Of course, by nature, bureacracy always has to build itself up, never deconstruct itself, so don't expect to see it short of in the face of a revolution.
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I actually do. He was just convicted within the last couple of months. He'll be in for four years, as he didn't pay any income tax or file for at least four years, to the tune of several million dollars. Instead he spent the money on his automobile collection, which has subsequently been seized and is being sold to pay what he owes.
This was a very rich man. He could have easily afforded his taxes while maintaining a standar
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This actually isn't a bad system at all. Since the poor become a very small part of the tax base in such a system it probably wouldn't be regressive compared to something like a use tax. If it turns out to be regressive, then just raise the rate a bit and have basic income to make up for it.
Bribocracy (Score:2)
We need even bigger plutocrats like a hole in the head. They already bought most the law makers; go for all?
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Not net. Never net.
Your stock broker doesn't charge you on your gains, they charge you on trades - volume or basis
Your real estate agent's commission isn't on your profit from a house
Your copier maintenance company doesn't charge based on your copy profit - it's fixed value plus cost per copy
The gas station doesn't charge you based on the net of your paycheck
If you want a fair system, you tax on gross receipts. Running the government (pacing roads, defending the country, testing medications, monitoring the
I have the answer. (Score:2)
10% across the board. Corperate,personal,investments, etc. no loopholes, no deductions, no exemptions. A fair tax. Something the rich utterly hate.
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"Every complex problem has a solution thats clear, simple, and wrong"
-- Someone
I'll start with the obvious:
2013 US GDP: $17 T (10% = $1.7 T)
2013 US Bugdet: $3.45 T
As to whats fair, the rich would love your flat tax. 10% of a poor family's monthly income can be a weeks worth of food. 10% of most 1%ers monthly income is...sitting around somewhere because the boat is already gassed up and full of booze. "Oh Oh but they earned their money"... thanks to the often overlooked service provided by the government: a stable society in which poor people are doing just well enough
Stop requiring people to overpay (Score:3, Insightful)
The current IRS regulations effectively require people to overpay their income taxes, which results in nearly everyone getting a refund, which they want processed quickly, because somehow it's okay if the government is holding money you didn't actually owe, until you actually know how much they're holding. If, on the other hand, people have to mail in a check they don't care if it takes the IRS a few months to verify everything.
Simple solution: Eliminate the regulations that require overpayment, such as the regulation that penalizes you for underpaying if your withholdings are inadequate to cover your liabilities and aren't at lease as large as the prior year's withholdings. Some, perhaps many, people will still choose to overpay, as a sort of brain-dead savings plan, but many will reduce their withholdings, and those that still overpay will have no basis for complaint about a slower refund, since it was their choice.
But, then, I think the whole concept of mandatory withholdings is evil and wrong. It's just one of many ways that taxpayers are misled about how much they're paying. It's not the worst of such deceptions, but it's a significant one.
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Thanks for the fraud, Turbotax (Score:5, Informative)
We wouldn't have this problem if we filed our taxes online. Turbotax has prevented that, because they want to charge us for doing what the government could do free, as it does in less corrupt countries.
We've discussed this on Slashdot before. It's like keeping marijuana illegal because the prison guards' unions want to keep their jobs.
http://www.slate.com/blogs/mon... [slate.com]
The Sleazy PR Campaign to Prevent the IRS From Making Your Taxes Simpler
By Jordan Weissmann
Slate
April 14 2014 3:41 PM
Theoretically, it should be far easier for Americans with simple finances to file their tax returns. Instead of making tax filers putz around W-2s and tax prep software, the IRS could electronically prepopulate their paperwork with the information it already receives from banks and employers, and tell filers how much they owe. If the final figure looked about right, you’d have the option to file. As Matt Yglesias wrote here last year, the whole process could be a five-minute snap.
Theoretically. But for years now, Intuit, the maker of TurboTax, has fought tooth and nail to prevent automatic tax filing from becoming a reality, lobbying against bipartisan legislation to introduce it with the help of a powerful tech industry trade group and conservative anti-taxers like Grover Norquist. Intuit and its competitors in online tax prep don’t want the government cutting its market share. The tax-crusaders want to ensure that paying the government remains as much of a painful, resentment-generating slog as ever. And thus a potent alliance has been born.
http://www.propublica.org/arti... [propublica.org]
How the Maker of TurboTax Fought Free, Simple Tax Filing
by Liz Day
ProPublica, March 26, 2013, 5 a.m.
So why hasn't it become a reality?
Well, for one thing, it doesn't help that it's been opposed for years by the company behind the most popular consumer tax software — Intuit, maker of TurboTax. Conservative tax activist Grover Norquist and an influential computer industry group also have fought return-free filing.
Intuit has spent about $11.5 million on federal lobbying in the past five years — more than Apple or Amazon. Although the lobbying spans a range of issues, Intuit's disclosures pointedly note that the company "opposes IRS government tax preparation."
The disclosures show that Intuit as recently as 2011 lobbied on two bills, both of which died, that would have allowed many taxpayers to file pre-filled returns for free. The company also lobbied on bills in 2007 and 2011 that would have barred the Treasury Department, which includes the IRS, from initiating return-free filing.
Intuit argues that allowing the IRS to act as a tax preparer could result in taxpayers paying more money. It is also a member of the Computer & Communications Industry Association (CCIA), which sponsors a "STOP IRS TAKEOVER" campaign and a website calling return-free filing a "massive expansion of the U.S. government through a big government program."
Re:Thanks for the fraud, Turbotax (Score:4, Insightful)
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We wouldn't have this problem if we filed our taxes online. Turbotax has prevented that, because they want to charge us for doing what the government could do free, as it does in less corrupt countries.
I have filed my fiance's parents' taxes for free [irs.gov] for the past three years, so I don't know what you're on about.
Basic checks (Score:2)
The IRS could do a lot with a few simple checks:
Easy Fix (Score:4, Interesting)
Repeal the 16th Amendment (or just admit it was never legally ratified), reset the legal meaning of "income" from "money given in exchange for labor" back to "capital gains as a result of business profits," and BOOM!
Problem solved.
Practically speaking as a CPA... (Score:3)
(2) The IRS won't allow or enforce any sort of efile for everyone in the short-term
(3) The IRS does allow you to file Form 14039 which puts a flag on your account which will make it harder for someone to cheat you out of your refund because your account will go through extra checks (such as making sure that your address and other information hasn't changed from last year since most information breaches don't contain all of the information necessary to file your tax return) and will reject fraudulent looking returns
http://www.irs.gov/pub/irs-pdf... [irs.gov]
(4) The IRS might decide to, upon filing form 14039 or if you have experienced a fraudulent return filed for you, a distinct PIN which is like a PIN for a credit freeze
Morale of the story if you're concerned about not getting your refund
-file form 8822 when you change address and notify your employees and other agencies which file forms on your behalf to have your current address so all filings point to the same physical address
-file form 14039 to have the identify theft flag added to your profile
-always try to arrange so you owe a little money come tax time (but not so much that you owe a penalty) so your refund is not in purgatory in the event of a fraudulent return filed on your behalf
-if you do indeed get a refund, try to file as early as possible to beat out a fraudster
Re:Corporate taxes (Score:5, Insightful)
Let's fix the corporate tax evasion first please.
Let's fix corporate taxes first, so that there is no evasion.
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Fair enough. As an additional note, according to this article it is costing the U.S. $337 billion dollars!
http://www.theguardian.com/new... [theguardian.com]
Re:Corporate taxes (Score:5, Insightful)
Let's fix the corporate tax evasion first please.
Let's fix corporate taxes first, so that there is no evasion.
Both. The US has very high corporate taxes (relative to other countries) but also has the most advanced system of tax loopholes ever developed by a corrupt legislature. States frequently offer tax incentives to big companies to move or stay in a state, while leaving the same unpalatable taxes (like business property taxes on machines and furniture) on everyone else.
Tax corps uniformly and quit with the loopholes and the same same income would come in at a lower tax rate, thus addressing both evasion and avoidance.
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You're mixing state and federal taxes. The feds can't act on state taxes without throwing out what little is left of the US Constitution.
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No I'm not. I'm addressing both state and federal taxes. They both exist and are real and apply to any US based corporation. Any solution necessarily involves both.
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You can't get a solution like that. State taxes are the responsibility of each of the fifty states. You'd have to get every one of them to reform their own tax laws, amend the US Constitution, or violate state sovereignty. None of those are going to happen. IMO, none of those should happen. Tame the federal beast and let the states regulate themselves.
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>If you are whining about US taxation rates you are clearly a poser that has never had any actual experience with this stuff.
As a business owner who pays personal and business taxes, I'm all too familiar with them.
>The US tax code specifically panders to corporations.
Big ones. There are several types of corporation.
>The nominal rates are a pure fiction to distract ignorant RV dwelling GOP supporters.
They are a fiction because of all the other rules. You either didn't read or didn't comprehend the p
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Stop calling them loopholes.
Loopholes are unintended.
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Stop calling them loopholes.
Loopholes are unintended.
Hmm... How about intended loopholes? :-P
Re:Corporate taxes (Score:5, Insightful)
The IRS is raking in record income to the US federal government.
You aren't out of money because the IRS isn't taking it in... you're out of money because you're spending too much of it.
By all means... fix corruption... but while you're at it... balance the fucking budget.
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Exactly. We don't have a collection problem, we have an outradeous [google.com] spending [cnn.com] problem. [humanevents.com]
Federal Budget Death & Taxes:
2004 [visual.ly]
2007 [tehowners.com]
2008 [deviantart.net]
2009 [infohow.org]
2011 [coolinfographics.com]
2012 [coolinfographics.com]
I.e. The government collect more tax dollars from the people than any nation in recorded history, still spend a Trillion dollars more than it has per year - for total spending of $7 Million PER MINUTE and complain that it doesn't have nearly enough money!?!?
Spending money to kill other people is NOT the solution to balance the budget.
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Be careful what you wish for. Balancing the budget is trivially easy, but you may not find the result pleasing. Balancing the budget can just as easily be done by raising revenue as by reducing expenditures.
Ordinary People can only do so much to raise their revenue. They can cover big capital expenses Now, like house or car, by taking on debt in the form of a mortgage or loan, or by buying on credit. This of course adds additional expense Later in the form of debt service, and most people understand this.
Th
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yawn... you can't raise revenue any higher. They're already raising it as high as they can. If they raised it higher they'd get less money. We've already hit the laffer curve.
Which means we're looking at over 1 trillion in CUTS.
And as to the negative consequences of that... bring it.
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The laffer curve is a fictional construct of corporate greed.It is laughed out of any conference of economists for it's absurd leaps of faith and lack of supporting evidence.
https://www.princeton.edu/~rvd... [princeton.edu]
http://scienceblogs.com/goodma... [scienceblogs.com]
http://business.time.com/2012/... [time.com]
http://www.theguardian.com/bus... [theguardian.com]
http://rationalwiki.org/wiki/L... [rationalwiki.org]
http://economistsview.typepad.... [typepad.com]
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Tell you what. You loan the US government 1 trillion dollars interest free per year and I'll sign off on your little plan.
Short of that, we're destroying ourselves.
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there is always a war... by that standard the dollar will collapse before they fix it.
strange mod going on this thread (Score:2)
Feel free to mark this OT, it is. I'm just surprised by the mods on this thread. My comment was not meant to be offensive or trolling.
As an American, I find corporate tax evasion much more important ($337 billion a year).
Other comments further down are also modded very strangely, with people at -1 for saying the same exact thing as people with +3, +4, +5.
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All taxes are regressive. The rich (and Corporations) will spend money to avoid paying taxes, leaving those that can't to pay the lion's share. There is no way to avoid this scenario, because taxes are punitive in function (e.g. Alcohol, tobacco etc) if not in practice. And while I agree that we need some form of taxes, they should be voluntary contractual agreements between Citizens and the government.
Unfortunately, the government doesn't really care about citizens, which is why our tax system is so screwe
Re:Corporate taxes (Score:4, Interesting)
Or you could just do a federal sales tax. Everyone pays, including corporations, so everyone has skin in the game. No loopholes. No moving out of the country to avoid paying your share. No April 15. No tax forms. No deductions or credits. Everyone knows exactly what they are paying. Everything purchased is taxed, period.
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Rich people spend less of their money and save more of it than poor people, simply because there's more left over after paying for the necessities.
All money is spent eventually. Also, what do you think the bank does with the money people "save"? Banks loan that money to someone else and charge them a higher interest rate than they are paying the savings account. That is how banks make money. So the person who takes the loan will spend it, meaning it will be taxed. When the savings account is cashed out
Factually incorrect (Score:4, Insightful)
> The corporation has a profit margin or they would not be taxed.
FYI, that is factually false. Approximately half of all taxes on business re unrelated to profit, or margin. A few of the taxes I, as a small business person, pay each month or quarter:
Social Security and medicare ...)
Federal Unemployment tax
State unemployment tax
State training tax (in some states)
State workforce disability tax (in some states)
--Note all of the above are for hiring people. As the president has said, if you want people do less of something, put a tax on it.
Business personal property tax (Every year, I pay a tax for owning my 15 year old desk, my pens and pencils, my mouse pad
Franchise tax
Sales and use tax
Income taxes account for only 20% of tax revenue. 80% of the taxes paid are paid whether they bankrupt the business or not.
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IMO our whole monetary system has evolved to promote convenience so much that we're losing basic security.
I just now cancelled a debit card because I'm tired of cleaning up after fraudulent transactions. The world is full of criminal organizations working full time to defraud anybody and everybody. I just can't see it as sustainable.
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A flat tax is inappropriate, but an linear tax (tax = rate * income - base) is probably reasonable. or even a quadratic tax (tax = rate1 * income^2 + rate2 * income - base).
For various reasons I prefer the simpler linear tax with a fairly large base, so that people living on minimum wage would actually get a small amount back. The tricky part is defining income...it's got to include ALL sources of income, including long term capital gain, but you don't want to discourage investments. However, that should