I'm not mad about owing the money, but what annoys me is if they have enough information to know that I underreported, then why am I part of this equation to begin with? Clearly they have enough of my tax data to know I screwed up, so why don't they just send me a bill once a year? I don't see why Intuit (or HR Block or TaxAct or Jackson Hewitt etc) need to be part of this transaction at all.
[1] It was an honest mistake on my end, I forgot to report a sizeable stock sale I did in 2020.
For example: RSUs and NQSOs (employee stock grants) are in my experience handled extremely poorly by default. If I have RSUs vest when the stock is worth $10 a share, then I pay income tax that year based on income of ($10 x share-count). If I sell those shares later on, my brokerage reports to the IRS either: unknown basis value or $0 basis value. The correct basis value is $10 per share. There's a spot in the tax forms where you can tell the IRS that you have the corrected basis, but if you don't do this, you will pay extra tax, and it's an easy one to miss, especially if you're just importing the 1099-B.
At tax time my brokerage does send me additional forms beyond the 1099-B that include the corrected basis values, so its not that they don't know the right value, they just don't give it to the IRS directly. I assume this is due to IRS/congress rules and not my brokerage being obnoxious.
Sure, and I'd be ok with giving people the option to deny the default return and file their own using Intuit or something. For people like me, who don't have the ambition to try and do anything clever with taxes, I'd be ok with the default return that they generate from all the information sent via my employer and banks.
Then people in that situation can do it from scratch like they're already required to do now. This is really not an issue anywhere else - this change wouldn't make the process harder for anyone.
The overwhelming majority of people do not have complicated taxes. That is the exception and as others have pointed out, they could hire an accountant just like they do today.
Having the IRS mail out your bill would eliminate the need for most people to purchase accounting software each year, which is exactly what Intuit doesn't want.
> A broker or barter exchange must file Form 1099-B for each person: > For whom the broker has sold (including short sales) stocks, ... etc., for cash
https://www.irs.gov/instructions/i1099b
To elaborate on the GP comment, the issue is not whether the brokerage reports, but how they do it. You generally compute capital gain income as (sale price) - (acquisition price). If you buy a stock on the market and sell it, brokers generally report both sale price and acquisition price to you and the IRS.
But for employee stock compensation, the broker can report sale price without acquisition price to the IRS. If you don't report the acquisition price yourself, the IRS will think that it's 0, and assume your income is much higher than the real value.
General penalty relief: https://www.irs.gov/payments/penalty-relief
I just went through this for an honest mistake as well, though I didn't qualify for a first time abatement. It took months to get a response as well.
I believe your best chance is dialing in right when they open, before the call queues build up. Also the folks answering the calls are in a better mood then, and you're more likely to get the outcome you're looking for.
By comparison, the needless busywork that the IRS puts the tax payers through is nothing short of ridiculous really. It only serves to waste time and effort, and there is plain and simple no reason whatsoever why the IRS could not do it like Norwegian tax authorities does. Our system here in Norway is not perfect either, but the citizens of the United States, and the US government, would benefit hugely from a tax filing system built to help you file taxes the way that ours does for us.
The busywork comes mostly from the arcane and convoluted nature of US tax code, notably the parts that describe deductions and credits. US governments use such things as a way to implement policy, and the crap just piles up over time. Can you deduct X? How much of X can you deduct? Are you eligible for a credit? Or just part of a credit? Or none of it? etc. etc.
There's some chance that they didn't have enough information to know that until you filed. Maybe.
Because Capitalism, in essence, is the optimization of one particular group’s ability to alter how people live their lives in a way that transfers the most wealth from the working class.
America’s economy is a house of cards built around financial middlemen.
I have looked, and I am still waiting.
Americans would probably still decry it as socialism or communism even though it is very far away from those.
