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| Authored by: tknarr on Monday, January 14 2013 @ 04:28 PM EST |
Probably the way it's handled. In the UK you file your returns directly with
the taxing authorities using an account set up with them, and it can instantly
red-flag any attempt to open a second account using the same NIN. That makes it
pretty hard for fraudsters to open an account for someone else. Also, most
people don't have to file a return, the most common returns for most working
people are handled via PAYE and don't require a tax return to be filed at all. I
think the idea of a refund of taxes paid would be relatively unusual in the UK,
so merely filing a return claiming a large overpayment would instantly raise red
flags.
By contrast, in the US you can't even calculate how much you owe
in taxes until the year's over with. For instance, money I spend on medical care
would be tax-deductible, but I won't know how much I'll spend until the year's
done. So when my employer makes out my paycheck every 2 weeks, they don't know
what my taxable income will be or how much actually needs withheld. They
estimate based on the tax tables for my annual income, usually it's set up to
over-withhold slightly to insure taxes don't come up short, and at the end of
the year I sit down and apply all the credits and deductions and come up with a
figure for actual taxes owed and the difference between that and what I paid.
And then, unless I'm a large business, if I file electronically I do not
file with the IRS. I file with a tax preparation firm, who prepare the
electronic filing and submit it to the IRS. The fact that returns are routine,
that refunds are routine and that returns aren't actually authenticated as
they're filed are what create all the holes the fraudsters are getting
through. [ Reply to This | Parent | # ]
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| Authored by: PJ on Monday, January 14 2013 @ 04:37 PM EST |
How intriguing.
I know one thing. The solution is to keep filing
on paper.[ Reply to This | Parent | # ]
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| Authored by: pem on Monday, January 14 2013 @ 11:57 PM EST |
In the US, due to the combination of regulatory capture (industry lobbying) and
the small government contingent in congress who think that government should
never compete with private enterprise, it is not possible to directly send your
tax return to the IRS.
Now, the IRS has managed to institute a "partnership" where they make
some of the bigger tax companies do returns for free for low-income filers (by
threats to compete with them) and to do "fill in the forms" stuff for
free, but _all_ those returns (even the fill in the forms ones) go through
private enterprise. it is _not_ _possible_ (unless you are a corporation) to
directly file your return with the IRS -- you have to go through an
intermediary.
If the IRS had an API for filing tax returns, you would see an explosion of open
source software to do this for you. So it's imperative (from the perspective of
the closed source folk) that this not be allowed to happen.
The agreements (for your safety of course) that the IRS promulgates for those
entities that can send data directly to it are, so far, even more effective than
FRAND patents in helping to preclude open source.
I happen to think that this actually allows an open source arbitrage play, where
a corporation can let people use the software for free (and contribute to it --
real open source), and even file paper returns for free, but charge a nominal
amount such as two or three bucks for transmitting to the IRS, for all the
hassle of getting and staying accredited and security audited, saving the data
as required by the IRS, etc. I have even done some work towards this, but it
would really require a full time commitment to get it going, and then some
funding to do it seriously and do state returns as well.
This would also require some legal firepower, for the simple reason that the
closed source software companies were charging for the software, and then
charging for the transmission, so the IRS has precluded them from being in their
"free file" (free advertising) program if they charge for
transmission, and some states, such as New York, have even outlawed charging for
electronic filing of state returns.
I think this can be worked around; you wouldn't get any advertising from the
IRS, but you could certainly do an open source Android, desktop, and/or web app
for paper filing that could connect and file for money through the transmitter,
and as for New York -- you don't provide state tax service there unless you can
convince them that you are not selling software (it's OSS -- I'm giving it away)
so should be allowed to charge for transmitting.
[ Reply to This | Parent | # ]
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