Majority Of Intuit's Lobbying Dollars Spent Trying To Stop IRS From Making It Easier To File Your Taxes
from the death-and-taxes dept
There has been an effort underway these past few years to make tax season less stressful, less complicated, and less expensive for a large swath of Americans. These efforts have produced plans to make tax season "return free" for many, with pre-populated tax forms prepared by the government that can either be signed if accurate, or ignored if not with a separate filing then being produced by the person in question. That is, since the IRS already should have most of the details on how much you earned from the companies that paid you, it can send you a pre-filled out tax return document, rather than forcing everyone to redo the same work with the same documents hoping that you don't make some mistake that will make the IRS man mad. Again, for those who want to go a different way, they can. But for those who find the IRS's pre-filled documents to be okay, it will make tax filing significantly less of an issue. If you live outside the US, this may sound strange to you, because much of the rest of the world alread does it this way. In a recent episode of Planet Money, the analogy is made that the way we do taxes in the US would be like if credit card companies sent you a "bill" that was a blank sheet of paper, expecting you to fill out all your charges over the past month, and if you got anything wrong, you'd be punished. On taxes, most of the rest of the world the taxes are more like your credit card bill. In the US, it's more like a blank sheet of paper. And, as in years past, some are finally trying to fix things in the US.
This plan has unfortunately run into the extreme distrust of all things government currently weaving its way through America and the gobs and gobs of money from Intuit and H&R Block that is making corporate use of that fear. The lobbying efforts of the tax prep industry has been a multi-year campaign (we've been writing about it since at least 2010) in which money is given to politicians essentially to have them work directly against the interest of their constituents on the subject of paying taxes into the government. It's absolutely bonkers (and partially helped along by anti-tax groups saying that anything that makes paying taxes easier should be stopped because taxes are bad).
But since bonkers is quickly becoming SOP in our government, these lobbying efforts have only ramped up recently, with an increase in dollars spent likely correcting for how simple technology is making tax preparation for most Americans.
Intuit spent more than $2 million lobbying last year, much of it spent on legislation that would permanently bar the government from offering taxpayers prefilled returns. H&R Block spent $3 million, also directing some of their efforts towards the bill. Among the 60 co-sponsors of the bipartisan bill: then congressman and now Health and Human Services Secretary Tom Price.
The bill, called the Free File Act of 2016, looks on the surface to be consumer-friendly. It makes permanent a public-private partnership in which 13 private tax preparation companies — called the “Free File Alliance” —have offered free online tax filings to lower- and middle-income families. The Free File Alliance include both Intuit and H&R Block. But the legislation would also permanently bar the IRS from offering its own free alternative.
There's something especially cynical about a law that is dressed up as a benefit to consumers by creating corporate partnerships making free tax filings available to the constituency, but which likewise prohibit the government from making the collection of its own tax dues more efficient at the same time. This is essentially a jobs program for the tax prep industry, one which that industry has taken to lying to the public through sock puppets in lieu of showing any kind of gratitude. That the industry now has cabinet-level representatives in its bullpen likely means things aren't going to get better for millions of American any time soon.
The reason the industry wants its free filing options codified into law in this way is so that it can upsell the public into paid tax services that it would otherwise not buy and likely doesn't actually need.
In an emailed statement the Free File Alliance’s executive director, Tim Hugo, said that the alliance does not automatically push paid products to those that use the Free File program but the taxpayer does “have the option of ‘opting in’ to receive additional information and offers from the tax preparation company they have selected.”
He said that the lack of awareness of the program is “unfortunate,” and placed blame on the IRS. While the tax agency previously had a large budget to advertise the Free File program, “today that budget is $0, making it difficult to reach the general public,” he said.
While it is indeed a crying shame that the IRS budget to pimp private businesses to the public has been reduced in this manner, it's arguable more of a shame that lobbying money has kept tax season more complicated and costly than necessary. That the industry is spending money to keep a voluntary option for the public beyond reach in favor of upselling that same public is all the more so.
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Filed Under: free file, irs, lobbying, ready return, tax returns, taxes
Companies: h&r block, intuit
Reader Comments
The First Word
“Why are you repeating yourself like that?
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Sounds like something you'd find in the Standard Methods.
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Tax code should be free, and actual runnable code
The tax code is basically a functional program, not written in a programming language. We should just write it in Scheme or some other standard language, which could then be ported to spreadsheets or whatever as needed.
If the government won't cooperate, we can do this ourselves. There's some code around—you may or may not find something covering the forms you need—but I see little organized effort. There should be some wiki where people can translate one line at a time to computer-readable format, and something showing which forms are complete, partially complete or still needed. And then programs like form-fillers and calculation engines that can work on this data.
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How do other countries that do this deal with the potential identity theft risks?
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Re:
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"pre-populated" is not even a valid concept, let alone for PRE-PARED form.
Proof that letting just any boob "blog" without a spell-check nanny should be illegal; udder kaos eventuates.
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"pre-populated" is not even a valid concept, let alone for PRE-PARED form.
Proof that letting just any boob "blog" without a spell-check nanny should be illegal; udder kaos eventuates.
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Re: "pre-populated" is not even a valid concept, let alone for PRE-PARED form.
How are things around the department water cooler these days? I assume still depressing and generally unhappy?
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Re: "pre-populated" is not even a valid concept, let alone for PRE-PARED form.
That said, after we supplied four inhabitants my pre-population has been diverted. So guess that make me de-populated.
:D
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Re: "pre-populated" is not even a valid concept, let alone for PRE-PARED form.
Ah, selectively quoting only a part of the definition. Nice.
Source.
Proof that letting just any boob "comment" without a Google search should be illegal :)
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Re: "pre-populated" is not even a valid concept, let alone for PRE-PARED form.
Wasn't that the episode where Maxwell Smart had to fight mad cows?
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Re: Re: "pre-populated" is not even a valid concept, let alone for PRE-PARED form.
This is KAOS, we do not "yippee-o-ky-yay" here!
(Occasionally a restrained "yahoo" is permitted.)
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Re: "pre-populated" is not even a valid concept, let alone for PRE-PARED form.
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Why are you repeating yourself like that?
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And people wonder why lawyers rule
People wonder why it's necessary to hire an army of high-priced lawyers to be allowed to do anything these days.
Well, duh. Guess who writes the laws? Lawyers.
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Debit card scams also
https://thinkprogress.org/virginia-moves-to-end-taxpayer-refund-system-riddled-with-fees-and-e rrors-54ac779bd7ce#.nbto588n1
More than $14 million in Virginia tax refunds issued through debit cards goes unclaimed
http://www.richmond.com/business/local/more-than-million-in-virginia-tax-refunds-issued-thr ough-debit/article_ca8e6919-b2f5-5f5a-9f13-3710811269a9.html
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https://www.franchisehelp.com/industry-reports/tax-preparation-industry-report/
Add to that the large tax accounting firms and in-house corporate tax departments that basically structure the company's operations to exploit tax loopholes -- they're not about to just roll over and allow the gravy train to end. Every politician who comes to office promising to simplify the tax code ends up adding a plethora of new deductions and financial instruments, which is always good news for the tax preparation industry.
It's hard to believe that for most of the history of the United States, there was no income tax whatsoever, and yet the country grew and prospered, fought (and always won) wars and everything else that countries are supposed to accomplish.
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As a corollary to this I find it ridiculous that I have to wait months for the necessary forms to arrive so that I can fill everything out. My employer usually gets the W2 out the door relatively quickly (early February?) but I routinely have to wait until early March (or later) before I have everything.
What is the holdup? All this stuff is in an accounting computer (or several)... why in the world they can't run the necessary process and then start the printers within a week or so of the new year I can't understand.
And yes, since the IRS has all of this info anyway (or should) I don't really see why you can't get a pre-populated form and just look it over to be sure everything is right. Sure, there are identity theft concerns that might require some extra thought, but that's true of the existing process as well.
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Re:
Do you really? By the end of the year you should know the exact value and categorization of all your payroll deductions. You'll know how much interest you made in bank accounts (very little) and you much you spent on medical expenses (too much). Investment funds should have released tax details by now that you can use to calculate your taxes (Ishares did it on Jan 31 for ex., with a QII report on Feb 7), even if they haven't mailed you your personalized values.
If the IRS wants you to attach the paper forms, you'll need to wait. It shouldn't stop you from calculating things.
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Re: Re:
This year a few more forms were able to be automatically imported... hopefully soon they all will be and then I won't need to wait for any of it.
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Home mechanics are killing the automobile service industry.
Home yard work is killing the landscaping industry.
I think I see a trend here, we need to outlaw these homes where they do things ... 'n stuff - cause think of the industries.
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bad guy here...
As far as I can tell, citizens are only going to say they want change in Government without voting for it.
Last I check the vast majority of "brain" children in the USA voted for an R or D. I see no reason to have hope, there is no chance I will beat back the throngs of stupid that infests humanity.
I say we go full on democracy so we can get straight to the suicide part!
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Re: bad guy here...
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How does a law make something permanent?
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Re: How does a law make something permanent?
A future law could easily undo this, regardless of the presence of the word "permanent". (Is that word actually in the law itself, or just the description of it?)
You also often hear about making some law or other "permanent" (e.g., tax cuts) in situations where all that's really being done is the existing law has a defined expiration date and they're taking that away so it doesn't automatically expire. Either way, if Congress made a law, Congress can get rid of it; the Constitution is meant to be the only "permanent" bedrock underneath everything.
Honestly in my opinion it's the "temporary" things that are more insidious. "How can we let this vital [whatever] expire, we have to renew it!" I can't remember where I heard the saying, but it seems to be true: there's nothing so permanent as a temporary law.
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Re: Re: How does a law make something permanent?
Well, to be fair that isn't exactly true. Poor choice of words... What I meant was that a law can be repealed, whether or not it's meant to be permanent when it's originally passed.
But in reality there can be any number of reasons why repealing a law can be complicated and problematic, especially if it sets up an ecosystem of side effects that aren't easily undone. (Witness the mess going on regarding the current health care situation.)
So what I should have said was that a future law could repeal this law, since there isn't any way to create an un-repealable law. For those kinds of things you'd have to amend the Constitution.
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Pepperidge Farm remembers
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great podcast about this
The reference to Australia is great.In Australia unless you have very complex with lots of share and deductions you can do your tax online in about 30 minutes. If more complex an accountant can do it with you in 30 minutes for about $80
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