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I can't think of what fraud it prevents.

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[-] PeepinGoodArgs@reddthat.com 22 points 9 months ago

Here's what Perplexity.ai said:

However, filing separately as a married couple generally disqualifies you from the EITC because it could potentially be used to circumvent the income limits of the credit. For example, if one spouse has a low income and the other has a high income, they could file separately to make the low-income spouse eligible for the EITC, even though their combined income would be above the limit for the credit

[-] db2@lemmy.world 8 points 9 months ago

If the government can't keep track of the money they take that they're supposed to give back because they shouldn't have taken it in the first place then they shouldn't take it in the first place. 🤷 They use it all year long to earn interest which we never see even though it's our money they're borrowing and to many of us that interest could make a huge difference.

[-] s38b35M5@lemmy.world 5 points 9 months ago

Because of the particulars of US tax code, individual tax liability is a function of income, information voluntarily provided to them. At least, the accuracy of the info is voluntary; submitting a w4 is required on hiring. Since you can claim five dependents and then file with zero, the government won't know what you owe until you file.

Some people use this incongruency to pay almost nothing during the year and pay in at filing. Others do the opposite to avoid underpayment.

Tax prep industry has helped to make the process disgustingly opaque, and I sure wish it was simpler.

[-] Ep1cFac3pa1m@lemmy.world 5 points 9 months ago

If it weren’t for credits and deductions filing taxes would be easy. It’s the tax breaks that make it complicated. I can’t imagine the amount of extra personnel the IRS would need in order to track and account for every tax break a couple hundred million people qualify for.

[-] db2@lemmy.world 7 points 9 months ago

It's 2024, there's no reason at all it shouldn't all be automatic.

[-] Ep1cFac3pa1m@lemmy.world 4 points 9 months ago

I think a lot of people would have serious reservations about every aspect of their life being instantly and automatically added to a central government database. Yeah, pretty much everything you do is recorded by some government agency somewhere, but ONE agency knowing everything about everyone sounds like a privacy nightmare. Hackers breach ONE system and suddenly everything is out.

[-] db2@lemmy.world 1 points 9 months ago

They already have all the information, they're clearly just mismanaging it.

[-] Ep1cFac3pa1m@lemmy.world 4 points 9 months ago

They don’t, though. The IRS doesn’t know where your kids go to daycare, or how much you’re paying for it, until you claim it as a deduction on your taxes.

[-] db2@lemmy.world 2 points 9 months ago

Then how do they "catch" people? The data is there or they couldn't.

[-] Ep1cFac3pa1m@lemmy.world 1 points 9 months ago

They audit you, and you provide proof of what deductions you qualify for. If you say you paid $10,000 for child care, and you have paperwork from the daycare to prove it, then you’re good. If you said you paid $10,000 for child care and it turns out you don’t have any children, you’re kinda fucked. Same goes for things like charitable donations. The IRS has no idea that you donated to a cancer charity unless you claim it as a deduction. If they audit you, you’d better have proof of the donation.

[-] db2@lemmy.world 1 points 9 months ago

And how do they know to audit? Because they have the information already and they can make you a modern indentured servant if you can't get out of it.

[-] Ep1cFac3pa1m@lemmy.world 2 points 9 months ago

If you claim 17 children as deductions, you’ll probably get audited. If you claim a new Ferrari as a business expense deduction, you’ll probably get audited. The IRS is not some evil omnipresent overlord looking to lock you into a life of servitude, and the people trying to convince you of that are: 1) very wealthy people trying to avoid paying taxes, and 2) the actual people trying to lock you into a life of servitude.

[-] Zoboomafoo@slrpnk.net 3 points 9 months ago

The reason is one half of our elected officials want the tax paying process to be as difficult as possible

this post was submitted on 26 Jan 2024
28 points (91.2% liked)

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