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by oliwarner
869 days ago
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They don't have all the data. Your tax office wouldn't automatically know about self employment, investment earnings, your private business expenses, collected rent, profit from reselling things, etc, and they'd expect you to declare them via some form of self-assessment. The US takes one step further by allowing a plethora of non-earning items to be declared as deductions on your return (mortgage interest, healthcare expenses, kids, etc) which the IRS needs to be told about. |
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For nearly all people, they do.
They do know your investment earnings (brokerages report that) and your mortgage interest (loan companies report that) and your kids.
That covers, just about everyone.
Sure, a few people have personal businesses and rent incomes and all kinds of complex things. So the rational thing to do is build an automated system that covers the needs of 99+% of people, and for the few ones that it doesn't work, let them opt out and do a traditional tax return filing.