Should the IRS handle individual's taxes automatically like a normal country would do? Why does TurboTax even exist for individuals and should intuit be abolished?

[rbarrett94-gmail]

In a normal country, individuals don't have to file their own taxes themselves every year. The existence of turbotax represents structural inefficiency and a burden placed on all Americans for the benefit of companies like intuit.

[ee-ea]

https://www.irs.gov/newsroom/direct-file-officially-opens-in-12-pilot-states-following-positive-earl...

[Mike9241]

do you really want the IRS to make tax decisions for you? Such decisions would most likely be in its favor. In other words, the iRS would be judge, jury and executioner.  There was recent talk about this, but it was dropped because of the conflict of interest that would exist.  What does the iRS do about situations where it receives little or no information about the income and deductions of a taxpayer?  

[rbarrett94-gmail]

Yes, I would rather the IRS do my taxes automatically, and for free, than pay out of my own pocket for TurboTax to do the same thing with the same information.  TurboTax is a rent-seeking example of inefficiency and exploitation. Intuit (and it's subsidiaries) enrich themselves by extracting value from the labor of working people while doing nothing useful themselves. 

[Opus 17]

It will never happen in the US.  Congress has filled the tax code with thousands of deductions, credits, exceptions, and special conditions, either to reward political constituencies, or to reward behavior that is trendy or socially acceptable.  The IRS doesn't know if you bought an electric car, or installed an efficient air conditioner in your house.  They don't know if your house is your "main home".  For small businesses, the IRS doesn't know what equipment they bought or what customers paid in cash, and whether you want to use standard depreciation, bonus depreciation, section 179, or a safe harbor.  

Before income taxes could ever be automated, there would have to be a significant and painful structural overhaul and simplification of the tax code, that would impact every possible taxpayer in some small or large way, that would lead to screaming from angry voters everywhere.  Right now the tax code is too complicated and too full of special rules that an apply to limited groups of taxpayers who do the "right" thing according to some congressperson from 40 years ago. 

[fanfare]

U.S. of A. is not a normal country.

[Anonymous_]

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@rbarrett94-gmail wrote:
In a normal country, individuals don't have to file their own taxes themselves every year.

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Not exactly true. 

Income reporting is required in other, what most would consider to be, "normal countries", such as Canada, Australia, the U.K. and Germany (with limited exceptions), and a host of others.

[Mike9241]

This will never happen. Many US taxpayers have income from sources that are never reported to the IRS. Many self-employed individuals who do not get 1099-s for all their income and the iRS has no way to know their deductible expenses. Then theirare those that have income earned in foreign countries that are never reported to the IRS. The IRS is now making a concerted effort to catch these tax cheats. Hate to bring this up but the IRS after audit thinks Trump owes them about $100,000,000

[TomD8]

"The existence of turbotax represents structural inefficiency and a burden placed on all Americans for the benefit of companies like intuit."

TurboTax is a commercial product produced by a public corporation, the purchase and use of which is entirely voluntary.  It is hardly a "burden placed on all Americans."

American tax laws are written by Congress, the elected representatives of the American people.  If you would like those laws to change, write your Congressman.  If you don't agree with your Congressman's views on taxes, you're free to vote for someone else.

I don't know which countries you consider "normal", but I'd venture a guess that many, if not most of them, impose a higher tax burden on their citizens than does America.

[Affordabletaxes2021]

Use freetaxusa.com.    It’s free. 

[taxlady28]

The IRS has resisted setting up its own income tax preparation system for years.  They used the excuse that private companies provided that servce.  They are finally going to have tax preparatin offered to individuals at no charge  in 2025.  This will probably mean that Intuit will lose millions of people who currently file with  TurboTax for free.  It will mean less free filers and it stands to reason that they will need to pay less agents.  Intuit has blasted the IRS in the past for their failure to provide that service and keep the burden on Intuit and other companies.

There are too many complicated tax laws in the US for a simple direct tax to work.  Users who pay TurboTax will continue to use it for its user friendliness and accurate computations.

[fanfare]

"There are too many complicated tax laws in the US."

Consider 2020 COVID-19  emergency distribution split into 3 with a basis in IRA.

I tried four tax prep softwares, and each gave a result different from all the others, only one gave the correct taxable amount on the IRA distribution.

Hint: it wasn't TurboTax Online.

The one that was correct, I couldn't use because a different bug on another worksheet calculated the wrong taxable amount based on Schedule D. The support team admitted the error but said it could not be fixed in the 2020 tax season. Maybe next year.

It was not until May that I found a software that gave the correct results and printed Form 8915-E correctly for a mailed tax return.

[scotntammylynn]

Then why are you here?  Just don’t use it.