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Open Source Tax Products?
sub7 asks: "That time of the year is upon as again: Tax Season. Those of us living in the U.S. are busy fumbling with various forms with awkward names and meaningless garble on them. Being a lazy BOFH, I went to H & R Block to see how much it would cost for them to prepare and file my taxes. They estimated -at least- $175, if not more! I knew it was cheaper to buy some software to handle my taxes. So I headed down to my local office supply conglomerate and picked up Turbo Tax 2004 Premier for $69.99. Being an OSS user for nearly 6 years I have never even considered an OSS tax solution product (probably because I ph34r t4x s34s0n!). So I turn to Slashdot to ask: Are there any projects equivalent to Turbo Tax or the other tax products out there for the OSS community?"
Thereby increasing the workload on the IRS, forcing them to hire more people and raise your taxes.
Good job there, buddy.
That is easily solved. Just have IRS develop this software. They have the accountants and they can guarantee that if software makes a mistake you are off the hook.
We are paying taxes precisely so that the government can do public service projects. This strikes me as a reasonable one.
In Brazil, the tax authorities write *themselves* *the* tax program, which is written in Java - .jar or with specific installers for Windows, Linux, Solaris etc, and made available for free to anyone.P F/2005/PGDJAVA/progIRPF2005multiplataforma.htm R PF/2005/progIRPF2005umdisco.htm),
but besides the free solution, I find it interesting they make it available to many platforms through the Java solution.
Link: http://www.receita.fazenda.gov.br/PessoaFisica/IR
There is also a Windows specific version (http://www.receita.fazenda.gov.br/PessoaFisica/I
It is in their interest to ease people's lives in filing their tax forms (it increases tax collecting...).
So, at least, no expenses in software solutions. And, yet, there is also the on-line form solution.
Many technical standards have associated with them a reference application, the operation of which is defined as the correct operation. Reference applications are a great way of resolving the inevitable ambiguities that arise in standards. IRS could publish an open source reference application that would have a high likelihood of meeting the IRS rules for nearly all tax filers, and could be used as a base of study by the commercial tax software industry.
If IRS were to adopt and publish such a reference application, then perhaps 95% of the questions that filers ask them could be answered by the application. The answers would be correct, or at least consistent. If an error were found, then the application could be corrected and everyone whose filing was affected by that error would be known and easily corrected. This is in contrast to the uncomfortably high error rate that the IRS telephone advisors have exhibited. (There many articles regarding studies of the error rate of IRS advisors, and all of those tax prep companies. I'm too lazy to find them today.)
Implementing a subset of their algorithm suitable for processing on a desktop is entirely within their capabilities. The IRS computers presently do this processing for nearly all filers. In other words, they already have a 'reference application'. It's just not public.
Such a reference application would not impact the commercial software industry, in fact it could help them as much as it would help anyone. I would expect that such an application need not have all the wysy features of a commercial tax prep product, and the commercial products might have much better tools for helping a person figure out the best strategy. Commercial vendors who want to base their product on the IRS product might or might not be be required to publish their own source, but should at least have to provide IRS with information on any errors that they identify, to allow correction by everyone.
A reference application would also be useful to IRS. It would provide a common reference point for all discussions and contentions regarding interpretation of the tax code.
There are some interesting legal questions. The majority of them would be answered by the following statements: 'This reference application is for reference by software professionals and is not intended for use 'as-is' by untrained individuals. It is applicable for the majority of individual tax filers, but not all. IRS does not guarantee accuracy and is not responsible for errors. Over- or under-payments, including interest and penalties the result from errors in the software are the responsibility of the filer, however underpayment as a result of a software error will not be presumed to be an act of fraud."
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A trip to H&R Block will pay for itself, so long as you identify the pitbull of the office. There is always one person, usually a woman, who will really hammer away with personal zeal at getting you a big return. your $175 investment could easily pay for itself if not pocket you some phat cash.
People who think they know everything really piss off those of us that actually do.
I worked for them long time ago. They had poster on the wall: IF MORE PEOPLE USE E*FILE, YOU'D BE HOME BY NOW
There are some major benefits to having your taxes done by a certified professional.
.agrippa.
a) If you get audited by the IRS, your tax preparer is the one that talks to them instead of you. The IRS can pick just about any reason they want to audit you, from legitimate inaccuracies/questions they have to the sky being blue that day (ie a random audit)
b) Your tax preparer, if decent, should know more loopholes in the state/federal tax structures that are apropos to you than TurboTax or even you yourself know.
c) The fees you pay to a tax preparer are write-offs for next year's taxes.
I just had my taxes done this week. It cost me $370, which is obviously a lot higher than TurboTax would be. This year I had a lot of tricky stuff including multiple jobs (some contracting), a house purchase, stock sales, etc. Considering she got me over 3000 off my federal/state taxes, I feel that its worth it. Some of the exemptions she used were totally unknown to TurboTax, which I have used in years past.
Well, the Open Tax Solver sounded interesting for a minute. Perhaps it has potential in the future, but for me, for now, it and other things there are useless. I need a schedule E (3 rental properties), and the forms and worksheets for depreciating stuff. I also live in Maryland state.
I think it may be hard for an open-source program to do all of the tax code. Tax law in USA is enormously complex. It's vague in certain areas. Every rule has an exception, some of those exceptions have exceptions to them, and then even those on occasion have exceptions. Every year the law changes, so you may not get to reuse algorithms from last year.
There's also the fact that if something goes wrong, the user may be royally in trouble. Do you want someone to end up owing enormouse penalty fees or going to jail because of a bug in the open-source tax program screwed up his return? Would an open-source program have tax lawyers involved in quality checks, to verify it is correct, and to interpret the vague parts of the law? What happens if such an interpretation of a vague detail is disagreed with by the tax court?
I worked at H&R Block as a tax preparer a few years ago. I wouldn't do it again. I wouldn't wan tto be involved in writing software that produces correct results for all users, and I certainly wouldn't want to have to deal with users complaining their tax returns got sent back by the IRS and they're now facing audits and other unpleasantness. I wouldn't want to be an open-source coder possibly facing lawsuits or IRS investigations if anything goes wrong.
I am annoyed with TaxCut though. I had a question about something this program did for my tax return this year involving depreciating an item that broke and I threw in the trash, I didn't understand their calculation in this case. Their customer support refuses to answer this kind of question, using the excuse that such an answer would constitute tax advice, and they (H&R Block owns TaxCut) do not give tax advice. They told me I must go to a tax professional to get an answer to my question about their own product's calculation. If H&R Block doesn't have qualified tax professionals to answer a question about a calculation done by their own product, well, let's just say I won't be recommending this program or its producer to my friends anymore... And they have money to hire "tax preparers" and lawyers to verify the software, or at least the different software they use in their numerous offices to serve customers with.
Am I overly paranoid? Maybe. If there's guys out there that were willing and able to make a complete tax preparation product and hire lawyers to interpret things and approve results, that'd be cool. I'm just not very optimistic that I'll be able to use such an open-source product for my own particular tax situation any time soon.