Why are US taxes unnecessarily complex?

[jericson]

This year I used the Free File Fillable Forms service to do my taxes. It’s pretty slick if you know your way around a tax form. That said, I just got this error emailed to me about my filing, which has been rejected until I fix the problem:

Issue : Business Rule X0000-005 - The XML data has failed schema validation. cvc-pattern-valid. Value `` is not facet-valid with respect to pattern ([A-Z0-9\-]|&){1,4} for type BusinessNameControlType.

The following information may help you determine the form at issue:
Field/Xpath: /efile:Return[1]/efile:ReturnData[1]/efile:IRSW2[1]/efile:EmployerNameControlTxt[1]

This is an error only a programmer could love tollerate. XML stands for Extensible Markup Language, which is superset of HTML. So the service uses that file format to store tax form data.

The error is Business Rule X0000-005, which means nothing to everyone except programmers who have the source code. Slightly more helpful (to programmers) is the cartoon swear ([A-Z0-9\-]|&){1,4}. It’s a regular expression that matches if the input string is a series of 1 to 4 letters, numbers, dashes or ampersands. Since my input string was `` (which is to say, blank), it failed to match and therefore violated the rule.

So I have a blank string that should not be blank. There is another clue, thankfully, from the name of the string type, BusinessNameControlType. Using my debugging detective skills, I infer that the string should be a business name. One possibility is that it’s the business I started late last year, Civitas. But I think it’s more likely to be one of the W-2s I received and entered manually.^[1] In a few minutes I’ll look to see if I failed to enter one (or all!) of the businesses my wife and I worked for last year.

So here’s the fun part—the IRS already has those W-2 forms on file in electronic form. It probably has an easy way to index all the businesses that have been filed
W-2s using my or my wife’s Social Security Number. In fact, it’s likely the IRS has an automated audit to verify I’m reporting all my W-2s so as to ensure I’m paying taxes on all of my income. As Joy commented today when I told her I was entering my W-2s, the IRS knows everything it needs to calculate my taxes except for deductions we are eligible for and my business income.

To sum up, I got a cryptic message because I failed to enter a business name on a form the IRS already has. It’s a crazy system that could be fixed by flipping the order of operations. Instead of taxpayers submitting their tax filings and the IRS auditing some of them, the IRS could mail out what we owe and we could file corrections to account for our charitable giving and so on. My guess is that tax receipts would increase because many people would prefer to pay more than to take the time to file corrections.

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1. One clue is a “IRSW2” string in the second paragraph of the error. ↩︎

[cellio]

We didn’t get XML and a regex, but we got a cryptic error trying to file my parents’ taxes, complaining about some missing field that wasn’t. We couldn’t figure it out, my dad always did their taxes and my mom doesn’t know what arcana might have been involved, and in the end we printed paper forms for her to sign and we’ll hope that’s good enough. The return itself wasn’t complicated – social security, a pension, IRAs – but nothing is ever easy, it seems.

[jericson]

Followup: I went back to see the error on the site and here’s what they show:

If you follow the link in the top right, you get to this page that allows you to past the error page. In my case, I got a fairly readable output:

Error:

Check Form W2 Boxes B and C. You have entered incorrect or missing information.

Solution:

There are two causes:

1. W-2, Box B - The Employer EIN is missing, and / or
2. W-2, Box C – The Employer Name is missing

• The first two lines are for the business name. If your Employer’s Name fits on the first line, do not use the second business name line.
• When determining the business name control, omit ‘The’ when it is followed by more than one word. Include the word ‘The’ when it is followed by only one word.
• The Employer’s Address Line is the third line in Box C and must contain a minimum of three characters.
• Place the City, State and zip code in the proper areas of the 4th line in Box C

Make your correction(s) and resubmit.

If you are making a payment with your submission, you may have to redate Step 2, Section 5.

It answered my questions, including whether I needed to inter the address too. (Answer: enter 3 random characters and call it a day! Ok, not really.)

Again, the IRS knows this stuff because they already have the EIN, which I did enter in each case.

[jericson]

I fixed all that and submitted my filing again. Not without yet more nonsense:

If you are curious, I did “swear”.