WHAT'S THE "REAL" QUESTION?
SCIENTIFIC TOOLS IN THE WRONG HANDS ARE AS DANGEROUS AS FIREARMS

FREE TAX SERVICE: A CLEAR AND PRESENT DANGER TO YOUR PRIVACY AND LIBERTY?

As we have repeatedly seen from many internet offers and apps, when the product or service is free – YOUR DATA IS THE PAY-OFF. You voluntarily surrender your non-public personal information to a profit-making enterprise to be used, ostensibly, to provide you with targeted advertising. What is rarely said is that the information you provide is aggregated with other available data to provide an enhanced and intrusive incursion into your life and lifestyle which goes far beyond your wildest imagination. In some instances, your information will be used against you in lawsuits or government investigations. In others, merely to spy on your activities for commercial reasons. YOU ARE THE PRODUCT THEY ARE SELLING FOR A PROFIT.

The clear and present danger of a FREE IRS TAX PRODUCT…

You may have noticed several articles and news stories on the efforts of a private company, TurboTax, to lobby Congress to prohibit the Internal Revenue Service’s ability to offer free tax filing services. The hook is always that TurboTax, H&R Block, and other for-profit tax filing services are trying to cheat the public by curtailing this free government offer. However, the reality is must more sinister.

The picture painted by the government is the simplification of the onerous annual drudgery for gathering up all of your income and expense paperwork and filling out a long complicated series of tax forms. Or, in some cases, an E-Z version of the form for those with little or no tax complications such as property, investments, and other business affairs. The suggestion is that the ultimate goal of the exercise is that the government would pre-fill in the pertinent data, do the calculations, and then present your proposed tax return for your corrections, approval, and signature – accompanied with the appropriate check if there was a shortfall in your free government loan (withholding) program. Or, in many cases, a refund request where the government withheld more than the amount owed – and for some which appears to be a forced savings plan that yields a year-end “bonus” much like those Christmas Savings plans of past years.

The clear and present danger comes from completing the government’s data circle. The government already receives independent notice of your income from your W-2 (Wage Earner) and 1099 (Interest, Dividend, and other non-wage sources)documents. This provides an estimate of the income side of the equation.

But, what of the expense side of the equation? Here the government does not have access to how you spend your money. So it is conceivable, at some point in time, Congress will, in their infinite wisdom be coerced by lobbyists or the government itself to provide expense information to the government by providing access to your checking and credit card accounts, allowing the government to classify your expenses to complete the expense portion of the calculation. It is also conceivable that some form of access to your medical and pharmacy records might access to correctly differentiate between tax deductible and disallowed medical-related expenses. In this electronic era, big-brother writ large.

magic

The TAXPAYER FIRST ACT…

One cannot overestimate the irony in the naming of Congressional bills which almost always signals the opposite of the stated intentions in the title. Somewhat like the Patient Protection and Affordable Care Act (Obamacare) which provides neither patient protection nor affordable care.

Why would the government, who coerces “voluntary” taxes under the threat of fines, penalties, fees, and prison-time, be attempting to protect a citizen-taxpayer-consumer?

The first thought is that lobbyists for the accountants and tax preparation groups are legally purchasing (bribing) our elected officials with campaign contributions and other support. However, a more malevolent thought comes to mind. Perhaps we are experiencing the rope-a-dope technique of salami-eating (you eat the whole salami one slice at a time) where the legislators knowingly place onerous provisions into a bill for the sole purpose of passing incremental changes while making a great public show about rejecting the “bad” portions of the bill. The legislators get what they want (more money and control over your life) and the media facetime demonstrating they are protecting individuals. Cynical? You bet!\

Here is the bill with its “magic text…”

H.R.1957 - Taxpayer First Act of 2019
Sponsor: John D. Lewis (D-GA)

Taxpayer First Act of 2019

This bill modifies requirements for the Internal Revenue Service (IRS) regarding its organizational structure, customer service, enforcement procedures, management of information technology, and use of electronic systems.

The bill includes provisions that

  • establish the IRS Independent Office of Appeals to resolve federal tax controversies without litigation;
  • require the IRS to develop a comprehensive customer service strategy;
  • continue the IRS Free File Program;
  • exempt certain low-income taxpayers from payments required to submit an offer-in-compromise;
  • modify tax enforcement procedures that address issues such as the seizure of property, issuing a summons, joint liability, referral for private debt collection, and contacting third parties;
  • establish requirements for responding to Taxpayer Advocate Directives;
  • permanently authorize the Volunteer Income Tax Assistance Matching Grant Program;
  • modify procedures for whistle-blowers;
  • establish requirements for cybersecurity and identify protection;
  • prohibit the rehiring of certain IRS employees who were removed for misconduct;
  • allow the IRS to require additional taxpayers to file returns electronically; and
  • increase the penalty for failing to file a return.

The bill requires the IRS Commissioner to appoint a Chief Information Officer, modifies the requirements for managing information technology, and authorizes streamlined critical pay authority for certain IRS information technology positions.

The bill also requires the IRS to implement

  • an Internet platform for Form 1099 filings,
  • a fully automated program for disclosing taxpayer information for third-party income verification using the Internet, and
  • uniform standards and procedures for the acceptance of electronic signatures.
<Source: Congress>
The magic text that keeps IRS from terminating the “free filings service” and not provide tax preparation software.

SEC. 1102. IRS FREE FILE PROGRAM.

(a) IN GENERAL.—

(1) The Secretary of the Treasury, or the Secretary’s delegate, shall continue to operate the IRS Free File Program as established by the Internal Revenue Service and published in the Federal Register on November 4, 2002 (67 Fed. Reg. 67247), including any subsequent agreements and governing rules established pursuant thereto.

(2) The IRS Free File Program shall continue to provide free commercial-type online individual income tax preparation and electronic filing services to the lowest 70 percent of taxpayers by adjusted gross income. The number of taxpayers eligible to receive such services each year shall be calculated by the Internal Revenue Service annually based on prior year aggregate taxpayer adjusted gross income data.

(3) In addition to the services described in paragraph (2), and in the same manner, the IRS Free File Program shall continue to make available to all taxpayers (without regard to income) a basic, online electronic fillable forms utility.

(4) The IRS Free File Program shall continue to work cooperatively with the private sector to provide the free individual income tax preparation and the electronic filing services described in paragraphs (2) and (3).

(5) The IRS Free File Program shall work cooperatively with State government agencies to enhance and expand the use of the program to provide needed benefits to the taxpayer while reducing the cost of processing returns.

(b) INNOVATIONS.—

The Secretary of the Treasury, or the Secretary’s delegate, shall work with the private sector through the IRS Free File Program to identify and implement, consistent with applicable law, innovative new program features to improve and simplify the taxpayer’s experience with completing and filing individual income tax returns through voluntary compliance.


The secret sauce …

EIGHTH MEMORANDUM OF UNDERSTANDING ON SERVICE STANDARDS AND
DISPUTES

Between the Internal Revenue Service and Free File, Incorporated


This Eighth Memorandum of Understanding ("MOU") is entered into as of the date of the last signature on this document between Free File, Inc. ("FFI") and the IRS. This MOU is a 3-year follow-on agreement entered between the parties, and that has a termination date of October 31, 2021.

ARTICLE 2

FFI AND IRS OBJECTIVES

Members shall work in concert with the IRS to increase electronic filing of tax returns, which includes extending the benefits of online federal tax preparation and electronic filing to economically disadvantaged and underserved populations at no cost to either the individual user or to the public treasury. Further, the IRS and FFI (previously Free File Alliance or Alliance) agree that to serve the greater good and ensure the long-term stability of FFI, the scope of this program is focused on covering the taxpayers least able to afford e-filing their returns on their own. In recognition of this commitment, the federal government has pledged to not enter the tax preparation software and e-filing services marketplace.

<Source: IRS>

Bottom line…

As you can see, the essential provision that the federal government shall not compete with private industry in the area of tax preparation software and e-filing services is not even in the bill -- but lies in a “subsequent agreement” that is beyond the ability of ordinary individuals even to locate. Nothing is straight up when it comes to Congress.

Perhaps one might consider a paraphrasing of Benjamin Franklin’s saying … “Those who would give up essential privacy, to purchase a little temporary ‘convenience,’ deserve neither privacy nor convenience.”

We are so screwed.

-- steve


“Nullius in verba.”-- take nobody's word for it!

“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw

“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”

“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS

"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius

“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell


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