[GNC] US Bans Free tax Software

[David Cousens]

Mike 

The article was a lot clearer than the headline implied about the intention
of the legislation as were a couple of others I later found. The situation
with regard to the powers of government is different in both Australia and
the UK and the US. We have privileges extended to us rather than guaranteed
constitutional rights as such. The powers of our government particularly wrt
to personal liberty are limited and established much more by legal
convention/case law rather than specific clauses of our constiution than in
the US.

The tax office in Australia has a web portal for individual tax payers into
which we can enter information. Our tax office collects a lot of information
on individuals directly from employers, banks, superannuation providers etc
and a lot of what they have collected can be preloaded into your tax return.
We can also submit through registered tax agents. Our tax office did create
tax software which you could download and use on your own computerhowever
that has been deprecated in favour of the web protal and commercially
available software

Where it is changing is in the returns for businesses which has a plan to be
be totally electronic submisssion in the future with requirements that
establish an auditable trail. I reviewed what was available directly from
their website about two months ago and it was mainly good intentions and no
documentation. I  went through it again todayand there have been a lot of
additional documents added recently. They are still full of circular
references at this stage however. Once businesses are completely digital I
suspect pressure may come on for individual tax payers to also submit

The problem I see for free software developers here is to register as a
developer for the software, you have to be an existing business as you
require a registration only available to an existing registered business.
SDKs and APIs which appear to be written in C# are only available to the
registered developers. The messaging protocols and data formats used are
being developed by a collaboration of the Tax Office with some existing
software developers which does give that group of current developers a
considerable competitive advantage over new entries into the market.  

This effectively cuts developers of free software out of the loop unless
they are able to register a business and makes it hard to get enough
information to even create export files from GnuCash for import to
commercially available software which can do the digital submission. This
was what I initially set out to investigate. 

The upside of that is that the protocols being used are industry standard
both for validation and messaging which uses XBRL,JSON and XML for the
message formats. I haven't been able to establish whether the exchanged
messages are encrypted or not at this stage but one would hope they would be
to prevent interception of data streams to validated users. Business
registration requires the issue of a key, but it is not clear in what I have
waded through so far whether this is also used for encryption or only for
user validation.

The initial messages around the UK Making Tax Digital were equally confusing
and appeared to be far more draconian than what has eventuated so far.
Public scrutiny never goes astray.

i think there is some value in comparing how our various governments do
these things. Possibly little chance of influencing them directly but
awareness at least of the differnet approaches used in other countries and
jurisdictions helps .

David



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David Cousens
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