Re: Gotta love the US
Several conflated factors lead to the US tax reporting mess from what I have seen:
1. The tax code, as dictated to the IRS by the US Congress, is anything but simple. All kinds of political grandstanding from incentivizing people to jump on various "green" initiatives to encouraging college, medical, and retirement savings and spending to operating sideline federal welfare spending programs gets wrapped up in the guise of the "income tax" collection process.
2. The US tax system is a "voluntary tax program" (in the sense that it requires voluntary thinking and movement, not that you can volunteer [or not] to actually pay taxes). Although more and more types of data on citizens financial activity is reported directly to the IRS each year by various institutions, there is no single repository of all information, not even within the IRS. Citizens are required to understand, interpret, and apply tax laws to their own circumstances and self-report their interpretation of their financial obligation to the government. For some, with only a single employer, no investments, limited banking, and other simplicities, the government does have all of the data on-hand and has, at least in the past, offered some EZ file options. Many people have complications, though. I haven't been able to file my taxes easily without software or paying a preparer for fifteen or twenty years. Regardless, the IRS takes what the citizen self-reports and then determines whether it all hangs together, both what they already knew as well as what the citizen adds in their report. This process is more reactive than proactive, and how well it works depends on how much the Congress decides to fund the audit activity. This waxes and wanes due to political whimsy.
3. Some years ago I was involved in a large-scale effort on the part of the IRS to "modernize". This was right around when doing business on the web was becoming standard, but not yet the default way everyone was operating. The project requirements specified that it would provide a web-based way for citizens to interact with the IRS for many things, including filing taxes. You can imagine my surprise, then, when after months of effort defining requirements, doing analyses, and starting design work, I ended up in a room with some IRS folks who apparently didn't get the same memo as the ones pushing the project. They insisted that the IRS IT systems holding "corporate data" were forever and always barred from being connected in any way, even indirectly, to the Internet. Because security, of course. So direct service to taxpayers was out. But the IRS could let those systems connect with trusted "third party tax service providers". Thus the paradigm of submitting taxes completed using third-party tax software, submitted to that tax software vendor's corporate systems, and then and only then that information being sent along a trusted pathway to the IRS systems holding "corporate data".
It is definitely in the IRS' best interests to have tax preparation simple, relatively easy, and all electronic. There are lots of good folks there who want that to be the case. However, the US Congress needs to be convinced to manage the US tax code in a manner that permits that to happen, both in terms of its complexity and in terms of how often (and late in the yearly cycle) they make changes to it. And the "security" folks at the IRS need to (if they haven't already) put on their grown-up pants and face the reality that they can't hide behind outdated security rules forever.
Biting the hand that feeds IT
