Beta
×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Ask Slashdot: Can You Trust Online Tax Software?

Soulskill posted about 10 months ago | from the how-to-win-the-audit-lottery dept.

Cloud 237

An anonymous reader writes "TurboTax from Intuit and H&R Block's own tax package have been perennial mainstays for U.S. citizens trying to use software to figure out just how much they owe the country, without reading the tens of thousands of pages of IRS forms guidance. With tax season just around the corner, the new online platforms from both providers raise an interesting question: can you trust your return information any more or less to an online platform than you do to the equivalent software on your computer?"

cancel ×

237 comments

Sorry! There are no comments related to the filter you selected.

I Used a Popular Online Tax Service... (5, Interesting)

DexterIsADog (2954149) | about 10 months ago | (#45469013)

...whose name you know. More than once it incorrectly calculated taxes owed, leading both the Fed and State governments to send me a check, saying, "hey, you way overpaid your taxes."

I'm done with tax software. It's back to a human accountant. Her first consultation with us turned up a $3,400 deduction we had missed a couple of years back. That alone pays for a few years of returns and advice.

Re:I Used a Popular Online Tax Service... (-1, Troll)

Anonymous Coward | about 10 months ago | (#45469071)

Yeah. I used to do my taxes myself by hand. But my calculator (from a brand you know...) kept giving the wrong numbers, so much so that I way underpaid my taxes and was hit years later with a $7000 fine from the government, plus interest on my unpaid taxes!

I'm done with calculators. It's back to pencil and paper (someone else's pencil and paper, hee, hee...). The first time I tried this, I realized that I did have to pay taxes, and I had no fines at all! That alone pays for years of pencils and quite a lot of paper (someone else's, of course!)

Re:I Used a Popular Online Tax Service... (0)

Anonymous Coward | about 10 months ago | (#45469375)

You insensitive clod, I don't have any hands.

Re:I Used a Popular Online Tax Service... (-1)

Anonymous Coward | about 10 months ago | (#45469483)

h;AFSDH;af qi ;fHFHFSjdfheiurerfn hfjALFAS

Re:I Used a Popular Online Tax Service... (5, Interesting)

ShanghaiBill (739463) | about 10 months ago | (#45469123)

I'm done with tax software. It's back to a human accountant.

Are you aware that most human accountants use ... tax software?

Her first consultation with us turned up a $3,400 deduction we had missed a couple of years back. That alone pays for a few years of returns and advice.

Most likely she found that deduction by running tax software. I use Turbo Tax, but I also keep up on tax law, and changes to the software, so that helps me find deductions a less informed person using the same software, would miss. Software is a tool, it can do more in the hands of a skilled user.

If you spend a day studying tax law and reading your software's manual, you will save more money than you earn at your job in a month. It is time well spent.

Re:I Used a Popular Online Tax Service... (5, Insightful)

DexterIsADog (2954149) | about 10 months ago | (#45469175)

No. No, I won't save more money than I earn at my job in a month. There's not that much more to save. And I earn a lot. Enough that I've decided not to spend my leisure time becoming a tax accountant - you know, someone whose *job* it is to know taxes. Software doesn't mean shit, it's the person using it *and* their knowledge.

I could also paint my entire house, but I don't feel like doing that either.

I don't regard spending time learning tax regulations as time well spent. And, wrong again... she didn't find the deduction using tax software, but by looking at our returns, how we work, and then interviewing us. You know, employing skills that software doesn't do well.

Other than that, your analysis was spot on.

go (5, Insightful)

nten (709128) | about 10 months ago | (#45469421)

I have heard circumstances like this multiple times. It really bothers me that we have invented a tax code that is on par with the game "go" as far as its ability to be computerized. There are extremely talented individuals making a living interpreting our tax code. Those same people could be doing something far more useful to society than they are now, but we have created an entire industry that sucks them away from more useful endeavors by cobbling together a tax code that is a mashup of bribes to interest groups, bribes to voters, authoritarian interference with our individual lives, and a glass ceiling protecting the one percent. If any highschool graduate can't just sit down with a calculator and pay the *exact* amount owed, we have done something wrong.

Re:go (5, Interesting)

Anonymous Coward | about 10 months ago | (#45469621)

It's not an accident that tax codes are as complicated as they are. My company (one of the two mentioned) spends a ton lobbying Congress to keep the tax laws complicated enough that people cannot reasonably do it with pen and paper without missing something or spending far too long doing it. Yet they don't want to make it so complex that you have to seek professional help. It's a tricky balancing act and it tends to tip towards being too complex because, in that case, they can then direct you to their CPAs that use their expensive tax product and charge a referral fee on top of that. From the CPA perspective, the referral comes with a ton of the information already entered into the system, so they can complete more returns. I find it funny that I've had conversations with the CEO where he talks about how excited he is that his company can so radically simplify the tax experience with software while, at the same time, he's employing lobbyists to make the tax software necessary in the first place.

However even if there weren't intentional efforts to complicate the tax code, it would still be a lot more complex that you want it to be. Just like computer code that starts off elegant and simple and, through bug fixes, optimizations and new features becomes a tangled web of spaghetti code, the tax code will get more and more changes to close loopholes (bugs) and add new taxes/credits for various things (features). And business tax codes are even worse.

I'd be more upset about it if I didn't now have a ton of stock in a company that benefits from making the process simple for those willing to fork over ~$100 each year. That, and we get the software for free :-)

Re:I Used a Popular Online Tax Service... (4, Insightful)

ktappe (747125) | about 10 months ago | (#45469521)

You know, employing skills that software doesn't do well..

I'm not following this. Software (I use TaxAct) is quite good at making sure to ask you a lot of detailed questions about your life events and situation. Software can make sure to ask these questions and not forget one like a human can. If you, the end-user, neglect to check a box that says (for example), "I donated a car this year", then that's your fault not the software's. If you're trying to say the accountant would ask "Hey, are you sure you didn't donate a car?" and you respond "Oh yeah...you're right, I did," then OK, the human is better at coaxing info out of you (or inducing you to lie.) Personally, I'll stick to software.

Re:I Used a Popular Online Tax Service... (2)

mjwx (966435) | about 10 months ago | (#45469529)

No. No, I won't save more money than I earn at my job in a month. There's not that much more to save. And I earn a lot. Enough that I've decided not to spend my leisure time becoming a tax accountant - you know, someone whose *job* it is to know taxes. Software doesn't mean shit, it's the person using it *and* their knowledge.

I could also paint my entire house, but I don't feel like doing that either.

I don't regard spending time learning tax regulations as time well spent. And, wrong again... she didn't find the deduction using tax software, but by looking at our returns, how we work, and then interviewing us. You know, employing skills that software doesn't do well.

This, a good tax accountant saves you more than doing it yourself because they know all the loopholes and deductions you can claim without being flagged for an audit.

Re:I Used a Popular Online Tax Service... (2)

Sarten-X (1102295) | about 10 months ago | (#45469669)

Or even if flagged for an audit, as I was, they're able to justify the deductions... Yes, I really did go to grad school, even though the university never filed their paperwork to show my tuition. The supplies and equipment I donated to my church could be deducted, but I just had to get my minister to write a quick signed letter. The investment income I had that year wasn't all taxable, so it didn't all need to be declared as taxable income like the IRS claimed.

Software's great for an estimate, and those estimates get closer every time I try my own hand at my taxes, but there's really no substitute for having a skilled professional look at your finances and figure out the correct arrangement. It's not even a matter of actually evading taxes, but legitimate deductions that the software could ask about, but the user won't understand.

Re:I Used a Popular Online Tax Service... (1)

Anrego (830717) | about 10 months ago | (#45469197)

If you spend a day studying tax law and reading your software's manual, you will save more money than you earn at your job in a month. It is time well spent.

For personal finances I don't feel this way. I suspect it would take the equivalent or more of the time spent working during that theoretical month to gain/maintain that knowledge, and (for me at least) would be an extremely boring and unpleasant chore. I'd rather take the hit and spend that time doing something I enjoy. Money isn't everything, or we'd all probably be lawyers ;p

Re:I Used a Popular Online Tax Service... (1)

DriedClexler (814907) | about 10 months ago | (#45469391)

Exactly. Tax software is not somehow an exception to "garbage in/garbage out". It will only discover what you tell it about.

Re:I Used a Popular Online Tax Service... (0)

Anonymous Coward | about 10 months ago | (#45469635)

This is increasingly not the case. TurboTax will pull W-2s, 1099s and other tax forms from various financial institutions and enter the data automatically. And for the financial institutions that don't have automatic data import, if you're not the first couple of customers to have to enter a form from whoever sent it to you, you can usually take a photo of the form and TurboTax is able to OCR the data in.

HR Block might do something similar, but I haven't used them since I started working for Intuit and get TurboTax for free.

Re:I Used a Popular Online Tax Service... (1)

ahabswhale (1189519) | about 10 months ago | (#45469617)

They do but none of them use Turbo Tax. Their stuff is A LOT more expensive than that. On a side note, modern pro tax programs all support an outsourcing button where all your shit gets sent to India to be computed. I recommend you verify with any accountant you use (in writing) that they do not outsource your tax forms.

Re:I Used a Popular Online Tax Service... (1)

whoever57 (658626) | about 10 months ago | (#45469147)

Her first consultation with us turned up a $3,400 deduction we had missed a couple of years back.

And some years ago, I proved to my accountant that she was wrong about a deduction she claimed we were not entitled to. So what's your point? Two anecdotes don't prove anything.

Re:I Used a Popular Online Tax Service... (1)

DexterIsADog (2954149) | about 10 months ago | (#45469201)

Whoa, Perry Mason, slow down! I wasn't aware I needed to "prove anything".

I related my experience, in which tax software made repeated mistakes, and then I used a human who did a better job. How in the world did my simple story get your panties in such a wad?

Re:I Used a Popular Online Tax Service... (0)

Anonymous Coward | about 10 months ago | (#45469327)

Whoa, Perry Mason, slow down! I wasn't aware I needed to "prove anything".

I related my experience, in which tax software made repeated mistakes, and then I used a human who did a better job. How in the world did my simple story get your panties in such a wad?

All your simple story tells anyone here is that you were unable to use tax software without a mistake being made. If you want us to believe it is the software (from a name we know!) and not you that is at fault, you will have to offer more than your silly little anecdote.

Re:I Used a Popular Online Tax Service... (0)

Anonymous Coward | about 10 months ago | (#45469445)

since you won't ever earn enough to file more than the 1040ez, this subject doesn't actually affect you. are you spending another boring evening in mom's basement? finished washing her lingerie, did you?

Re:I Used a Popular Online Tax Service... (3, Insightful)

ColdWetDog (752185) | about 10 months ago | (#45469369)

OK, how about three anecdotes? Last time I used TurboTax I got a polite letter from the IRS saying I owed $68,000. I ran over to an accountant who reviewed our return, ended up getting us a refund of over $5000 and more than payed for herself.

Turbo Tax is OK, but the tax code is so complicated that if you have anything other than 'normal' income (ie, W2's and 1099's) you may miss out on big problems or rewards. No more TT for me. Actually, the accountant does use some form of Intuit software, but it's far beyond my interests and abilities. And I agree with other posters. I could probably learn the stuff, but would rather start pulling out my toenails with pliers, thankyouverymuch.

Re:I Used a Popular Online Tax Service... (1)

Anonymous Coward | about 10 months ago | (#45469501)

if you are using turbo tax ... and your income somehow has a possible 68K debt to the IRS .. I think you make WAY TOO MUCH for turbo tax.
And if you don't have some sort of specialized assistance -- financial planner --- you're an idiot who clearly likes throwing money away.

Re:I Used a Popular Online Tax Service... (1)

JJJJust (908929) | about 10 months ago | (#45469663)

IRS said you owed $68,000. Accountant said you were due back $5,000.

Since this is an anecdote about ineffective TurboTax, what did TurboTax say you owed/were due?

Re:I Used a Popular Online Tax Service... (1)

canadian_right (410687) | about 10 months ago | (#45469289)

I've used the Canadian version of turbo tax for years without any problems, but my taxes are pretty simple.

I'm not sure how asking for a bunch of anecdotes will help you verify how good tax software is. Maybe there is study or review on this subject somewhere.

Re:I Used a Popular Online Tax Service... (0)

Anonymous Coward | about 10 months ago | (#45469657)

I've filed tax returns in both the States and Canada. Canadian personal tax is simple in comparison, there are few deductions and even if we miss a few we're content because money is not on top of our value system. In the States even a regular working person can make a lot of obscure dedcutions, you can still go the simple way and miss out on some, but (a) it's drilled in you daily to make as much money as possible, (b) it's drilled in you daily to spend as much money as possible, especially on middle-men like laywers, accountants, brokers, it's good for the economy.

Sure (0)

Greyfox (87712) | about 10 months ago | (#45469019)

I do all my taxes on monkeybagel.com. Monkeybagels will do your taxes in about an hour! Tax-doing monkeybagels!

No (0)

Anonymous Coward | about 10 months ago | (#45469023)

No, probably not.

Worried the government will see it (5, Funny)

GlobalEcho (26240) | about 10 months ago | (#45469029)

Given the recent revelations about NSA spying, I refuse to use these services. The risk is simply too high that the government might see my tax returns.

Re:Worried the government will see it (1)

DexterIsADog (2954149) | about 10 months ago | (#45469035)

Crap, I used all my mod points yesterday!

Re:Worried the government will see it (1)

shentino (1139071) | about 10 months ago | (#45469135)

Are IRS audits worse than NSA snooping?

Re:Worried the government will see it (3, Insightful)

Anrego (830717) | about 10 months ago | (#45469227)

Yes!

An audit requires a large amount of time and effort on the part of the victim. It's an extremely time consuming and frustrating process if you have _simple_ finances. The NSA spying is largely transparent and non-intrusive.

Re:Worried the government will see it (1)

6ULDV8 (226100) | about 10 months ago | (#45469281)

Only because of the point of entry.

Re:Worried the government will see it (0)

Anonymous Coward | about 10 months ago | (#45469323)

IRS might ask for info no normal person keeps

like proof you lived at a previous address for 5 straight years. who keeps years rent receipts, cable bills, etc?

Re:Worried the government will see it (1)

Sarten-X (1102295) | about 10 months ago | (#45469699)

Uh... I do?

I have every bill and major receipt received since 2008. I keep them in a small filing cabinet, organized by category (current employment, old health insurance, car paperwork, etc.), and I cull the oldest crap when it gets too full.

I recently had to apply for a US security clearance, which involves filling out a nice big form detailing every residence you've had for the past decade, and in some cases they even want account numbers for utilities and such. I had mine accessible.

Re:Worried the government will see it (1)

MXB2001 (3023413) | about 10 months ago | (#45469185)

I like your sense of humour. :)

Re:Worried the government will see it (2)

melikamp (631205) | about 10 months ago | (#45469301)

And more to the point: I will fully trust the online tax software if it's free (libre), secure against eavesdroppers, and operated by the tax-collecting government agency itself.

Australia (4, Informative)

cheater512 (783349) | about 10 months ago | (#45469039)

Been doing it for years with government provided software.

Mind you it doesn't say 'cloud' every 5 words, but it submits it all online and even auto fills in a lot of your data from government databases.
Not sure how long it has been available for but many many years without incident.

Oh and its free.

Re:Australia (5, Insightful)

fuzzyfuzzyfungus (1223518) | about 10 months ago | (#45469203)

Been doing it for years with government provided software.

Mind you it doesn't say 'cloud' every 5 words, but it submits it all online and even auto fills in a lot of your data from government databases. Not sure how long it has been available for but many many years without incident.

Oh and its free.

Thankfully, Intuit, Inc. (by a totally crazy coincidence also the maker of TurboTax(tm), a market-leading tax software solution) has been fighting to save us from communism [propublica.org] ...

So here in the Land of the Free, the IRS probably has the information it needs anyway (for fraud detection, and because Joe Worker's employer already reports it); but we can't let them destroy the free market, and capitalism itself, by making the process any easier. Instead, you just hand over your money and personal information to an 'Authorized e-File Provider' [irs.gov] and be glad that you live in the bestest ever country on earth.

We will be rolling out a similar system for health insurance soon.

Re:Australia (-1)

Anonymous Coward | about 10 months ago | (#45469317)

'MERKA!!!!! READING IS FOR FAGGOTS!!!!!!!!

sigh...... penisinbetweenthetits

that's really not that many caps.

Re:Australia (3, Interesting)

stinerman (812158) | about 10 months ago | (#45469439)

Yeah, I mentioned that at work once. That in foreign countries your return is pretty much done for you, and you just sign off on it. If it isn't correct you provide proof and then send that amendment back in. I got an incredulous stare and an "Oh, that'd be great for the government. They could say whatever they wanted and people would just pay up."

*sigh*

A good many people have no idea that the IRS already has all your W-2s and could fill out a simple 1040-EZ on your behalf. Sure, when you're itemizing it would get a bit more complicated, but for the vast majority of folks who don't itemize, there is no reason that the IRS can't have everything filled out for you, and all you need to do is sign and return.

Re:Australia (-1)

Anonymous Coward | about 10 months ago | (#45469573)

You're a fucking idiot. You post under the very freedom you desire, while pissing all over the free market which brought you this forum.

Or, did you think you'd actually be able to do this under a single government provided website? Do you believe they would let you post your opinion unfettered?

Your bizarre beliefs are amazingly strange to rational people. You might be happier behind the Great Chinese Firewall instead.

Re:Australia (2)

fuzzyfuzzyfungus (1223518) | about 10 months ago | (#45469675)

At risk of feeding the trolls, do you realize the category error you are making?

When I'm interacting with a given entity, state or private, yeah I definitely do expect to be able to do so through a website they provide or (if such is relevant to the situation) an API they provide for other front-ends and clients.

Having to hire an 'authorized e-file provider' in order to send a tax return to the IRS is like having to hire a third party to send in this post on my behalf. There isn't anything stopping me from doing so, if my requirements are esoteric in some way; but hell yeah I expect to be able to deal directly with the IRS when I have business with them (especially if I'm one of the numerous Americans whose tax return is basically the 1040-EZ that they already have all the data in).

If tax accountants, tax attorneys, and prep services wish to market their services, that's all well and good; but the idea that the IRS should be forbidden to provide trivial 20th century customer service lest it step on their dainty toes? Nonsense.

Nothing about that notion implies that there should be One Website For The People, Comrade!

Re:Australia (0)

Anonymous Coward | about 10 months ago | (#45469615)

by a totally crazy coincidence also the maker of TurboTax

I hope this was sarcasm, Intuit purchased TurboTax back in ~2007.

Re:Australia (2)

ArbitraryName (3391191) | about 10 months ago | (#45469681)

If by ~2007 you mean 1993, then sure.

Re:Australia (-1)

Anonymous Coward | about 10 months ago | (#45469693)

I'm not saying the system isn't with its flaws, but saying you'd rather have the government do it for you "for free" just shows that 1) you're ignorant of how things work in the real world, and 2) you don't have a firm grasp on why barriers to government involvement in private industry exist (hint: anti-totalitarianism). Most people don't have a good grasp on 1) or 2) anyways so your comment doesn't surprise me. And if you're going to argue against 2), why not take it to the next level and just nationalize any industry that bridges the private/public gap - which is pretty much where we're going anyways.

The false dichotomy that is this thread ignores the really obvious solution: don't have a tax code so damn complicated. The right doesn't want that because they want to funnel gov't money to their buddies in private industry and the left doesn't want that because a population not dependent upon them is much harder to control. I haven't heard anyone say we need a complicated tax code to protect the free market and capitalism, but the Feds have a track record of using the tax code as a weapon of last resort against citizens it finds uncooperative.

Can't we all just agree that the tax system is ridiculous and fix that first and THEN decide if we want the citizens to pay the gov't to provide it as a service to its citizens?

Re:Australia (0)

Anonymous Coward | about 10 months ago | (#45469219)

If only it were open. Being a governement developed project there are no valid reasons why it shouldn't be.

This would also help fix the platform limitations it has (maybe even the poor input response times and display scaling too?).

Re:Australia (2)

cheater512 (783349) | about 10 months ago | (#45469385)

I'm pretty sure I DO NOT want to see it's source code.
That would probably give me nightmares.

I Use Excel To Model The Form 1040 (1)

Anonymous Coward | about 10 months ago | (#45469399)

I usually hate to do my taxes.

But one year I decided to use a spreadsheet to check some numbers. Next thing you know, I was building a software model of my Form 1040 - line by line. Took me maybe two or three hours - but they were *fun* hours, because I was programming - not doing my taxes.

Finished the model and used it to evaluate several different scenarios. Selected the one that gave me the best return, and filed.

Been doing that ever since.

Anyone who pays for tax software is probably an idiot.

~childo

Re:I Use Excel To Model The Form 1040 (1)

queazocotal (915608) | about 10 months ago | (#45469459)

Great!
If you have a really - really simple return, and you understand all tax laws which may apply.

There are good reasons why tubotax et al don't use software written in a couple of hours in excel.

Re:I Use Excel To Model The Form 1040 (2)

ktappe (747125) | about 10 months ago | (#45469577)

Anyone who pays for tax software is probably an idiot.

Or doesn't know how to program. Not saying I'm one of those, but there is a place in this world for nurses and cooks and carpenters who know their trades quite well but not how to construct an algorithm in a computer.

Or were you trolling?

Re:Australia (1)

ktappe (747125) | about 10 months ago | (#45469561)

See, that's exactly how the U.S. should do it. It is moronic that we have to pay 3rd parties to submit data and money to the government. But we are responsible if the data is wrong, not the bad programmers.

It's the NSA!!! (1)

CajunArson (465943) | about 10 months ago | (#45469049)

Come on, we all know that if you use online tax software then the NSA can get access to your tax information! They spent BILLIONS of dollars in sophisticated backdoor technology so they can read all of our tax returns!

Re:It's the NSA!!! (4, Interesting)

kamapuaa (555446) | about 10 months ago | (#45469093)

I realize it's a joke, but legally the government outside the IRS isn't allowed to look at your tax returns. If you are a pimp or a drug dealer, you must file taxes with your correct occupation, however these taxes are not admissible as evidence against you, and law enforcement doesn't have access to it to point you out as a drug dealer.

Theoretically anyway.

There's been some funny side effects to the law, such as a prostitute who argued that her services weren't as much as the government claimed and she didn't owe so many back taxes. Congress passed a law that only the cost of goods sold count against revenue for dealing drugs (you can't include the cost of advertising) - however breast implants are a legitimate tax deduction as long as they're so large that they're purely for professional good and not personal enjoyment. And of course Al Capone going to jail on tax evasion, of all things.

Re:It's the NSA!!! (5, Informative)

Shakrai (717556) | about 10 months ago | (#45469235)

but legally the government outside the IRS isn't allowed to look at your tax returns

Unless you're buying health insurance in one of the new Obamacare exchanges. Or applying for a FHA mortgage. Or you happen to be the subject of an ongoing criminal investigation. Your State Government can access it too, if they have an income tax and wish to match up your State return to the Federal one. The IRS also shares returns with SSA.

There's also a multitude of Federal and State agencies that can access your tax account, if not your actual returns. The Department of State will check with the IRS before they issue or renew a passport, for the purpose of collecting foreign income taxes and denying passports to serious tax scofflaws. Child support enforcement agencies can seize refunds, so they've got a mechanism of communication with the IRS too.

Re:It's the NSA!!! (4, Informative)

JJJJust (908929) | about 10 months ago | (#45469267)

I realize it's a joke, but legally the government outside the IRS isn't allowed to look at your tax returns. If you are a pimp or a drug dealer, you must file taxes with your correct occupation, however these taxes are not admissible as evidence against you, and law enforcement doesn't have access to it to point you out as a drug dealer.

Theoretically anyway.

I don't buy this.

Title 26, United States Code, Section 6103 states:

(i) Disclosure to Federal officers or employees for administration of Federal laws not relating to tax administration
(1) Disclosure of returns and return information for use in criminal investigations
(A) In general
Except as provided in paragraph (6), any return or return information with respect to any specified taxable period or periods shall, pursuant to and upon the grant of an ex parte order by a Federal district court judge or magistrate judge under subparagraph (B), be open (but only to the extent necessary as provided in such order) to inspection by, or disclosure to, officers and employees of any Federal agency who are personally and directly engaged in—
(i) preparation for any judicial or administrative proceeding pertaining to the enforcement of a specifically designated Federal criminal statute (not involving tax administration) to which the United States or such agency is or may be a party,
(ii) any investigation which may result in such a proceeding, or
(iii) any Federal grand jury proceeding pertaining to enforcement of such a criminal statute to which the United States or such agency is or may be a party,
solely for the use of such officers and employees in such preparation, investigation, or grand jury proceeding.

(4) Use of certain disclosed returns and return information in judicial or administrative proceedings
(A) Returns and taxpayer return information
Except as provided in subparagraph (C), any return or taxpayer return information obtained under paragraph (1) or (7)(C) may be disclosed in any judicial or administrative proceeding pertaining to enforcement of a specifically designated Federal criminal statute or related civil forfeiture (not involving tax administration) to which the United States or a Federal agency is a party—
(i) if the court finds that such return or taxpayer return information is probative of a matter in issue relevant in establishing the commission of a crime or the guilt or liability of a party, or
(ii) to the extent required by order of the court pursuant to section 3500 of title 18, United States Code, or rule 16 of the Federal Rules of Criminal Procedure.

Re:It's the NSA!!! (0)

Anonymous Coward | about 10 months ago | (#45469333)

> the government outside the IRS isn't allowed to look at your tax returns

According to my lawyer you are correct with a single exception. I had to get sign-off on my BATFE form 5320.4 tax paperwork from the sheriff where I used to live and also from the police chief where I live now. To be more specific, federal law requires me to get the Chief Law Enforcement Officer for the area to not only review, but in addition, sign-off on my tax paperwork. The courts have ruled that is unconstitutional to require you to show tax paperwork to law enforcement, and several more even more specific rulings that you can't require people to show tax paperwork to local law enforcement, but of course as always, the BATFE ignores the courts and does whatever they damn well please.

error (1)

Anonymous Coward | about 10 months ago | (#45469053)

TRUST and TAX... no possible solution found.

No, you can't (2)

Kardos (1348077) | about 10 months ago | (#45469063)

With local TurboTax, you're just running closed source software. However, you can quarantine it such that it is unable to transmit anything over the tubes, and print the result, limiting the worst case scenario to incorrectly filled out forms.

With online tax prep, you're sending all your details to some online server somewhere, and hoping that they only do the computations and wipe all the data. But they won't. It'll be stored so next year it'll be "half filled in already for your convenience". If you value your financial privacy, you would not use an online tax service.

Re:No, you can't (2, Insightful)

Anonymous Coward | about 10 months ago | (#45469177)

My take on this is to log in and provide hypothetical information under a pseudonym. I let it come up with whatever it will... then use that as a guide to hand fill in my official paper return.

I highly resent being compelled to share my financial state of affairs with anyone, even the government, as much as they resent my prying into their affairs - such as how they are spending that which they extracted from me.

Even more so, I resent being compelled to share personal private information to third parties.

I get the idea the time is fast approaching that I will no longer be allowed to fill in my tax return by hand and be compelled to render the most intimate details of my life to organizations "working with" my government.

My government has given ample evidence that they are not to be trusted. They give all indication of protecting the wolves from the sheep. The sheep have no business hiding when the wolves are hungry, but it's quite OK for the wolves to don sheep's clothing and rat them out. Any sheep that dares rat out a wolf will be dealt with severely ( Snowden ).

Re:No, you can't (0)

Anonymous Coward | about 10 months ago | (#45469505)

If you care about privacy, buy a local copy of TurboTax and print your return. I do it every year. Easy.

Re:No, you can't (4, Insightful)

ArbitraryName (3391191) | about 10 months ago | (#45469287)

All of your tax information like your W-2 and various 1099s are provided to you by other people. People who keep that data on their servers. I'm not sure what sort of "financial privacy" you think you have, but the US tax system doesn't allow for much, if any.

Re: No, you can't (0)

Anonymous Coward | about 10 months ago | (#45469599)

What about me? I run Linux. I have no computers that run windows or mac operating systems. My choices are paper, or online. I have been doing online.

Online is more secure now (1)

cliffjumper222 (229876) | about 10 months ago | (#45469097)

I don't keep any tax data on my PC for security reasons. Had an iMac a while ago that blew up and it was a pain to get the drive out before trashing the thing. Easier just to keep the data in the tax cloud.

secure? (2)

Kardos (1348077) | about 10 months ago | (#45469137)

I don't think that word means what you think it means. Reliable is probably what you're after.

Re:Online is more secure now (2)

JJJJust (908929) | about 10 months ago | (#45469171)

I don't keep any tax data on my PC for security reasons. Had an iMac a while ago that blew up and it was a pain to get the drive out before trashing the thing. Easier just to keep the data in the tax cloud.

The fact that you couldn't get the drive out isn't a security issue, it's an Apple engineering issue.

Re:Online is more secure now (2)

fuzzyfuzzyfungus (1223518) | about 10 months ago | (#45469239)

You are going about the secure data destruction business all wrong... Once the computer is toast, anything between you and the platters is just 'collateral damage'. A rifle, angle grinder, or cutting torch will go right through an iMac without much difficulty.

Local versions give more control (4, Insightful)

David_W (35680) | about 10 months ago | (#45469109)

A friend of mine made an interesting point to me a few years ago, and caused me to switch from online versions to the local ones you install on your system. With the local versions, you get to keep the data files. The online versions tend to purge from year-to-year, or at least after a couple years. If you want to refer to an older return, be it because you are being audited, or just to help figure out something on this year's forms, you'll have everything (worksheets, forms, etc.) with the local version, assuming you back up the software and data files. Online, you probably just have a PDF of whatever finally got submitted to the IRS, and that's it.

So yeah, online versions work, but local ones give you more control.

Re:Local versions give more control (2)

larry bagina (561269) | about 10 months ago | (#45469249)

You can file a FOIA request to the NSA. They make backups of your hard drive every month.

Re:Local versions give more control (3, Informative)

Kardos (1348077) | about 10 months ago | (#45469271)

Re:Local versions give more control (1)

ArbitraryName (3391191) | about 10 months ago | (#45469703)

More effective than trying to explain the joke to you, I'm sure.

Re:Local versions give more control (2)

fuzzyfuzzyfungus (1223518) | about 10 months ago | (#45469309)

A word of caution, though. For reasons that, no doubt, have to do with fundamental difficulties in computer science, the rapid changes in the storage of integers and trivial floats; rather than being money-grubbing shitweasels, vendors of standalone accounting/tax-prep packages have a... spotty... record when it comes to compatibility of older files with newer clients.

I recently had the pleasure of migrating some antique version of Quicken to the present. The "Well, just open the old file with the new software" procedure simply wasn't supported, they'd changed formats and killed compatibility with their own older format. "Export" from the old one and "import" to the new one resulted in some alarming munging where somebody's penny-ante garden club ended up having assets in the range of $20 million, and $1.3 billion in liabilities.... This seemed improbable.

The officially-recommended(but not supported, or guaranteed to produce accurate results) solution was to take the oldest file, install an intermediate version a few years newer than that file, open the file with the intermediate version, allow it to convert, check the results manually, do the same with a second intermediate version, and then finally take the output from the second intermediate version and import it into the current version.

If you don't get to keep (in some non-fucked format) all the output and intermediate data, I'd trust an accounting package's data files only as long as I'd trust whatever mechanism (VM, whatever) I had cobbled together to keep that version of the accounting package running.

Re:Local versions give more control (1)

ColdWetDog (752185) | about 10 months ago | (#45469419)

The officially-recommended(but not supported, or guaranteed to produce accurate results) solution was to take the oldest file, install an intermediate version a few years newer than that file, open the file with the intermediate version, allow it to convert, check the results manually, do the same with a second intermediate version, and then finally take the output from the second intermediate version and import it into the current version.

.

I don't know about you, but the first time anyone recommended anything remotely similar to that for their software would cause me to terminate the program with extreme prejudice, take the CD's and shred them into tiny, sharp pieces and mail them to company wrapped up in a pipe bomb.

Re:Local versions give more control (1)

fuzzyfuzzyfungus (1223518) | about 10 months ago | (#45469651)

Oh, believe me, the only vestiges of politeness I preserved in that situation were for the poor sucker who had dutifully been typing her records in for years, and stood to lose them if they couldn't be migrated. Quicken... they can go to the special hell.

Captive markets and planned obsolescence (1)

Slugster (635830) | about 10 months ago | (#45469491)

This was sort-of my understanding of the big popular tax software also,,,,, that if you use the online services or not, the package is still only going to function for one year. And it's no accident.

A friend spent a number of hours over a few weeks entering tax info into a (big-well-known) program they had purchased the previous tax-year, figuring they'd just print it out and mail everything in, because they couldn't e-file it because it wasn't a current version,,,, and guess what? "Sorry, you need an upgrade to print. Click here to go to our website" -- or something to that effect.

Major targets for attackers (3, Insightful)

guanxi (216397) | about 10 months ago | (#45469119)

For attackers trying to collect personal information -- for identity theft, for dirt, for spying -- can you imagine a better target than servers holding everyone's tax returns?

Remember, security needs to make an attack more costly than the data is worth to the attacker. What responsibility / liability do vendors have regarding security for these servers? A breach may not cost them very much.

I file using paper.

Re:Major targets for attackers (1)

Kardos (1348077) | about 10 months ago | (#45469151)

Well the IRS still has the mother lode, the best target. But you're exactly right; if they are keeping all that info, they'll soon be the second best target. And when they get broken into, it'll be much much worse than the recent Adobe screwup.

Re:Major targets for attackers (1)

guanxi (216397) | about 10 months ago | (#45469195)

Well the IRS still has the mother lode, the best target.

Agreed, but the IRS's data isn't designed to be available on the public Internet. That doesn't mean it's perfectly secure, but it takes more than a password to access.

OTOH, if the NSA can't protect it's data from rogue insiders ... maybe we should assume our tax returns were sold to the highest bidder long ago.

Another thought: Attackers have even softer targets than tax vendors' servers: Consider malware which installs on user computers, looks for connections with tax vendor servers, and captures the data. (Maybe it's simpler to break into a secured server than millions of end-user computers, however.)

Re:Major targets for attackers (2)

DaHat (247651) | about 10 months ago | (#45469383)

OTOH, if the NSA can't protect it's data from rogue insiders ... maybe we should assume our tax returns were sold to the highest bidder long ago.

Who says they need to be sold? As of late they've been doing some strategic (and illegal) leaking:

http://dailycaller.com/2013/05/13/the-irs-admits-to-targeting-conservative-groups-but-were-they-also-leaking/ [dailycaller.com]
http://www.breitbart.com/Big-Government/2013/06/04/National-Organization-of-Marriage-Chairman-IRS-Leaked-Info-About-Group-s-Donors-to-Liberal-Groups [breitbart.com]
http://www.theblaze.com/blog/2013/06/04/report-irs-leaked-conservative-groups-confidential-info-to-opponents/ [theblaze.com]

And yes... I did pick the partisan sites deliberately in this case.

Re:Major targets for attackers (1)

DaHat (247651) | about 10 months ago | (#45469179)

can you imagine a better target than servers holding everyone's tax returns?

Yes, healthcare.gov.

Read in horror: https://www.trustedsec.com/files/CONGRESS_Hearing_HealthCareSEC_FINAL_v1.1.pdf [trustedsec.com]

Or, if you aren't keen on long reading, note that the website actually advertises the fact that it is the target of SQL injection attacks via it's search function: http://www.redstate.com/2013/11/18/healthcare-gov-site-advertising-sql-injection-attacks/ [redstate.com]

Re:Major targets for attackers (2)

guanxi (216397) | about 10 months ago | (#45469243)

(Thanks. If you could post a source besides a random PDF (which many people on /. will hesitate to download) and highly partisan, anti-Obamacare RedState, it would help your point and be informative for the rest of us.)

Re:Major targets for attackers (1)

DaHat (247651) | about 10 months ago | (#45469331)

Or... you could go beyond your close-mindedness, trust that your web browser will simply open the PDF up for you (as mine does)... and maybe take with a grain of salt what the evil RedState has to say... doubly so when you do not know how I arrived at choosing that link (hint, it was a quick search and was the top relevant result).

Just for you, here is another link, but about the PDF above & a quote from the CEO of TrustedSEC who was testifying in Washington today:

“Hackers are definitely after it,” said David Kennedy, CEO of information security firm TrustedSEC before a House Science, Space, and Technology committee hearing on security concerns surrounding the problematic Healthcare.gov website.

“And if I had to guess, based on what I can see I would say the website is either hacked already or will be soon.”

Source: http://www.foxnews.com/tech/2013/11/19/healthcaregov-already-compromised-security-expert-says/ [foxnews.com]

Somehow I doubt Huffington Post, Daily KOS or MSNBC are going to cover these issues... in fact at cursory glance, I see not hints of such reports there today.

Re:Major targets for attackers (1)

Kardos (1348077) | about 10 months ago | (#45469389)

The point was that PDFs are, thanks to Adobe, attack vectors (http://www.iceni.com/blog/2012-was-the-year-for-pdf-viruses-trojans-and-exploits/) and asking someone to open one is akin to asking them to run a binary email attachment. Your "trust me, I'm a doctor" response does not address that concern in the least.

Re:Major targets for attackers (0)

Anonymous Coward | about 10 months ago | (#45469665)

Sorry, you've been miss informed about the risk of getting viruses from PDFs. Trust me, I'm a doctor.

Re:Major targets for attackers (0)

Anonymous Coward | about 10 months ago | (#45469277)

Sadly your information is already out there. Given the billions in fraudulent returns filed, I don't think the IRS is really trying to protect you. Irregardless of whether you file paper or not.

But go ahead and mail those dead trees if it makes you feel better.

Re:Major targets for attackers (0)

Anonymous Coward | about 10 months ago | (#45469431)

Not just tax returns. Many of these software packages have direct connections to your bank accounts to help you balance your check-books. All stored on the company's servers.

Equal and less (1)

Todd Knarr (15451) | about 10 months ago | (#45469165)

For security and privacy, I'd say it's about equal. I don't recall any breaches of that data turning up, and if someone had breached it I'd think news would've turned up. That kind of breach is the kind the perps or someone in the know couldn't resist bragging about.

For legal compliance purposes, you have to trust the on-line services less. The IRS puts the obligation to have the information on you, regardless of who you used to prepare your return. You need to make sure you've got copies of both the return and all the supporting information where you can still get at them if the on-line service isn't available, and you need either the software to access the saved information or have the information in a form you can use directly (eg. printable PDFs). Remember when saving things that it doesn't help to just have the final form if the IRS wants you to justify how you got the numbers on the form.

NB: this applies to conventional tax software installed locally too. It doesn't help to have the data files if you've bought a new computer that doesn't have that year's tax software on it anymore and you can't reinstall it. I make it a point to keep one PDF copy of the return itself and one copy of the return including all worksheets and supporting data. Plus I print a copy of the full return and worksheets and file it with the hardcopy of all my documentation (W2s, 1099s, receipts etc.) so I have it if I lose the electronic copies.

As an H and R Block Tax Pro... (5, Informative)

NicBenjamin (2124018) | about 10 months ago | (#45469199)

If you know the Tax Code ok, or you actually have simple taxes*, software works fine.

You have to be somewhat familiar with the tax code because there's no easy way for us to translate tax law into simple English, so it's very easy for people to misinterpret one of the numerous questions the software asks. If you do that you a) don't get a deduction you deserve or b) do take a deduction and get screwed if you get audited. I'm a bit out-of-practice, but the student debt/tuition credit/HOPE credit/etc. nexus of Feds giving people tax breaks for paying for college in particular is very easy to screw up.

*Everyone I have ever met says they have simple taxes. Then they drop the annuity on the table and call it a W2. If you have any income besides interest on a bank account or a W2 you do not have a tax form H and R Block defines as "simple." You really need to read the paperwork that you are sent because many people take a chintzy $350 job helping their cousin cater a banquet, get a 1099, and are then surprised that I am legally required to put that on a Schedule SE and a Schedule C or C-EZ attached to a full 1040, and by the time you pay me for all those forms AND the self-employment tax you're losing money. The really big numbers at the top will tell you exactly what form it is. They'll be 1098, 1099, or W2.

Re:As an H and R Block Tax Pro... (1)

Anonymous Coward | about 10 months ago | (#45469339)

> b) do take a deduction and get screwed if you get audited.

Australia's software (mentioned above) has this covered too. If you use it and make an 'honest mistake' there are no penalties.

It probably also helps that the software is developed in house at the ATO, so they can align the rules to work in the software environment.

Though really, if your tax rules can't be done easily in software, they are probably broken.

Re:As an H and R Block Tax Pro... (2, Interesting)

Anonymous Coward | about 10 months ago | (#45469517)

The official policy of the IRS is that if you follow the advice of an IRS employee and that advice is incorrect, you are at fault.

I can no longer trust Intuit Turbo Tax (0)

Anonymous Coward | about 10 months ago | (#45469223)

I can no longer login to my Intuit Turbo Tax online account, even after providing my SSN online as an 'added security measure'. I really do not want to be doing entering my SSN on any site on the Internet. Now they are asking for me to e-mail a scanned image of my driver's license. I'm not going to do that. The online chat help that they have uses a URL with a registered domain in some eastern european country. Ok enough. I'm done with Intuit. I'll just have to do my taxes on my own from now on.

TaxAct (2)

bhlowe (1803290) | about 10 months ago | (#45469263)

I've been using TaxAct.com for 4+ years for personal taxes and it is fantastic. Super cheap and reliable.. All information from previous years is stored on their servers so each year it gets easier to file. Unlike healthcare.gov, I trust their site, it works, is easy to use, cheaper than anything else, and they didn't the taxpayers a half billion dollars on the rollout.

H&R block accountants use software too (0)

Anonymous Coward | about 10 months ago | (#45469311)

Seems that they might know just a little bit more than doing it online. Honestly, I would trust software over human accountants better in a sense because if done right, it is able to go by the tens of thousands of tax codes rather than a human which probably won't be able to know a quarter of that. Either way, this is probably the last year anyone will be getting anything back from their taxes. In fact, I'm surprised that the return is not taxed as income. hahaha But next year will be a year to talk to real accountants about finances because if anyone skips on an accountant, they might lose a significant amount of money in contrast to the previous years. Just be sure not to be a registered republican / libertarian if you plan on submitting your taxes *cough cough*

Just around the corner? (1)

The_Star_Child (2660919) | about 10 months ago | (#45469427)

It's almost half a year till you have to submit taxes (in the USA anyway.)

Re:Just around the corner? (1)

Riddler Sensei (979333) | about 10 months ago | (#45469649)

Taxes are DUE by April 15th, but the tax season starts at the turn of the calendar which, yes, is just around the corner.

Kind of an Odd Question.... (1)

rueger (210566) | about 10 months ago | (#45469457)

... since almost inevitably the final result is e-filed, either by you or by your tax preparer.

YMMV, but a couple of things came to my mind.

First, if you're asking this question it's really likely that doing your own taxes isn't saving you anything. An accountant or similar preparer can do them faster, and almost always finds savings that you won't. Plus, at least in Canada, if the tax people come a knockin' it will be your preparer who deals with them, not you.

Second, if you're one of those people with one tax slip from your employer, and two or three deductible receipts for charities or medical expenses, or if you're the typical student, you should be able to fill out a paper return in about ten minutes, or do it on-line or on your own PC with free software and mail it in. It's dumb to pay HR Block money to do this. The CRA even has a list of companies [netfile.gc.ca] you can check out, almost all of whom offer free choices for simple returns.

Third, as with anything that could wind up putting you in jail, taxes are one of those things where I like to keep complete paper copies of the entire file. Somehow having it printed and/or copied on paper feels more secure than trusting bits somewhere on the Internet.

Re:Kind of an Odd Question.... (0)

Anonymous Coward | about 10 months ago | (#45469589)

IN the US, generally, it's the individual who signs the return who is ultimately responsible for errors and omissions from their returns, not their tax preparer -- unless they can show that the preparer altered the return after the fact.

So, yes, it is implied that every citizen who pays taxes is supposed to know pretty much all of the tax law regarding individual tax returns.

Esq. (3, Funny)

PopeRatzo (965947) | about 10 months ago | (#45469477)

You guys are still paying taxes? Suckers...

Last year, I declared my basement the Sovereign Kingdom of Ratzistan, and myself the Lord High Exalted Mystic Ruler for Life. Not only will I not be paying taxes any more, but I've just sent the US Government a bill for $100,000 for the easement of my front door where they insist on putting their so-called "mail" and "restraining orders" and such. I talked to a lawyer that I met on Craig's List and he says I got a great case and instead of taking a percentage, he charged me a flat fee of $1200 to set me up with all the proper documents. They look really nice, too with a gold foil trim and big official seal.

You laugh now, but when I get that $100,000 (well, it'll be $98,800, after I pay back the nice Italian guy at the bar who lent me the $1200 for the lawyer), I'm gonna buy myself a sweet gaming rig and drop the rest on the Broncos to win the Super Bowl. Then we'll see who's laughing.

Re:Esq. (0)

Anonymous Coward | about 10 months ago | (#45469629)

Whom computers would destroy, they must first drive mad.

--
Quoth the ping to his brain: Error 404.

Just use IRS.gov (2)

students (763488) | about 10 months ago | (#45469503)

figure out just how much they owe the country, without reading the tens of thousands of pages of IRS forms guidance.

I have never found it challenging to file my taxes using just the information from IRS.gov [irs.gov] . IRS documents usually explain things very well.

Big time saver for complex taxes (0)

Anonymous Coward | about 10 months ago | (#45469543)

Retired accountant here. I use Turbo Tax.

For two years I computed our taxes using Turbo Tax and manually. They come out the same, but it takes me a whole day to crank it out manually, and I can do Turbo tax is a few hours.

We have messy taxes, though, with a rental home for an elderly relative and several different types of investments.

Tax rules too complicated; start over from scratch (0)

Anonymous Coward | about 10 months ago | (#45469603)

"tens of thousands of pages of IRS forms guidance" - I believe it! Besides professional tax preparers, does anyone want the tax laws to be so complicated?

Congress should start over from scratch. For taxes for 2015 and later, they should start with no income tax rules. Then add taxes, exemptions and deductions only on items that Congress specifically votes for.

Have a limit of 1,000 rules, or 10,000 words, in the tax code. If Congress reaches the 1,000 rule limit, and they want to add another rule, they must first remove an existing rule.

Load More Comments
Slashdot Login

Need an Account?

Forgot your password?

Submission Text Formatting Tips

We support a small subset of HTML, namely these tags:

  • b
  • i
  • p
  • br
  • a
  • ol
  • ul
  • li
  • dl
  • dt
  • dd
  • em
  • strong
  • tt
  • blockquote
  • div
  • quote
  • ecode

"ecode" can be used for code snippets, for example:

<ecode>    while(1) { do_something(); } </ecode>