[giantg2]

"why doesn't the IRS just send us their own reports for us to approve?"

I assume because nobody would file taxes for things that the IRS was absent from their report, because now you know the IRS doesn't know about it and won't be missing it.

I think TurboTax has too many partnerships and offers. It gets people because it's free or only $10 or whatever. It would be pretty easy to switch to other software, like HR Block.

[twblalock]

> I assume because nobody would file taxes for things that the IRS was absent from their report, because now you know the IRS doesn't know about it and won't be missing it.

That's not why.

The IRS is underfunded and overworked, so even if it had the information it needed to generate a report for everyone, it still couldn't do it. But it doesn't have that information anyway!

A lot of taxable income is derived from sources that are not reported to the IRS before taxes are filed. This includes things like cost basis for RSUs, state and local taxes (including property tax), and various kinds of investment income. Until 2008, brokers were not even required to report cost basis information to the IRS, which enabled people to easily lie about the amount of their taxable gains!

On top of that, there are a lot of deductions that are based on information the IRS does not have, such as business expenses, moving expenses, etc.

The IRS still largely relies on self-reporting by taxpayers. Anyone with a moderately complex tax situation (e.g. a homeowner, or someone with investment income) knows more about their tax situation than the IRS does!

[kelnos]

> This includes things like cost basis for RSUs, state and local taxes (including property tax), and various kinds of investment income.

Assuming the political will to make tax prep easy (which I know does not exist), the fix for this would be pretty simple for Congress to legislate. Sure, it would likely take a few years for all municipalities to come into compliance, but it's not like this would be difficult.

> On top of that, there are a lot of deductions that are based on information the IRS does not have, such as business expenses, moving expenses, etc. [..] The IRS still largely relies on self-reporting by taxpayers.

Sure, but there's no reason why the IRS couldn't have a website where everything it does know is pre-filled, and then could ask you about things they don't know about (and even hint at the kind of things that they wouldn't know).

> Anyone with a moderately complex tax situation (e.g. a homeowner, or someone with investment income) knows more about their tax situation than the IRS does!

Not really? My tax situation is probably "moderately complex": for 2021 I have W-2 income, contractor (1099-NEC) income, interest income, dividend income, capital gains through sales of stock, mutual funds, and bonds, RSU vesting, ESPP purchases and sales, required distributions from an inherited IRA, mortgage interest payments, charitable donations, and state, property, and estimated tax payments. I even have AMT credits I've been carrying forward and using for several years now. There is no reason, in principle, why the IRS could not be unambiguously and correctly notified of all of these things and prepare a return for me.

I hear a lot of "the IRS doesn't know X because Y isn't required to report X"... well... fix that! And I totally agree that the IRS won't know everything sometimes, especially sometimes things that would help lower someone's tax bill (like, say, deductions for business expenses). But there's nothing wrong with that; taxpayers can simply report those extra things during tax season, after doing a quick check to verify that everything the IRS does know is correct. Most other developed nations in the world have no problem with all this; the only thing that's "unique" about the US is our dysfunction.

[scarface74]

To a paraphrased an old saying, “it’s hard to get a politician to pass laws to make something easier when he gets paid to make it harder.”

https://www.propublica.org/article/inside-turbotax-20-year-f...

[beej71]

> Sure, but there's no reason why the IRS couldn't have a website where everything it does know is pre-filled, and then could ask you about things they don't know about (and even hint at the kind of things that they wouldn't know).

What about the fact that such a thing would certainly start to eat into Intuit's profits?

You're right--there's no technical reason this couldn't be done. And it should be done. But too much money is greasing too many palms.

As to the OP's question, I don't know why more people aren't steaming mad about it. We're getting taken to the cleaners.

[sofixa]

> Sure, but there's no reason why the IRS couldn't have a website where everything it does know is pre-filled, and then could ask you about things they don't know about (and even hint at the kind of things that they wouldn't know).

Just the way it works in saner countries like France. Things the tax authority knows are pre-filled, and I'm asked about the rest. So yes, there's no reason besides the fact that many companies would lose their business ( like TurboTax), so they lobby against it.

[giantg2]

"the IRS doesn't know X because Y isn't required to report X".

They are required to report it. Only the current reporting is that an individual is being sent numerous pieces of mail. It could instead be that the IRS gets these (systematically) and sends a person the compiled tax form for validation.

[andreareina]

Because the tax firms lobbied to bar the IRS from doing so. Other countries I've lived in make the common case this easy.