Your point about how the IRS already has all of the relevant information is something that has always puzzled me. Why are we performing this bizarre, ever-changing ritual with the threat of IRS audits hanging over us if they already know everything?
I think that is part of why TurboTax has such a foothold. I use it because it walks me through the frankly byzantine process and explains a good deal of the arcane terminology for me.
The IRS doesn’t have all the relevant information though.
A lot of deductions and credits are based on events or transactions that aren’t reported to the IRS. State and local tax deduction, charity deduction, medical expense deduction, and so on. There are also various penalties that need to be self reported - the IRS can find them, but only if they do an audit and are looking through bank accounts and other stuff they normally don’t know about.
I’m not sure if the IRS even knows how many kids you have for the child tax credit. How would they?
> I’m not sure if the IRS even knows how many kids you have for the child tax credit. How would they?
You have to report the SSN of your dependents on your tax return, still open to fraud but it’s not like you just fill in a number. This was actually a huge issue for the IRS before they co-opted the SSN as a tax identifier, and pretty much the only reason people get one assigned at birth instead of when they begin working.
CGP Grey’s video on the US’ lack of a national ID covers a lot of this, worth a watch.
They'll have it from the previous year. So, for each dependent, you'll likely only send a correction to the IRS twice: the year you gain the dependent, and the year they stop being a dependent.
I think that is part of why TurboTax has such a foothold. I use it because it walks me through the frankly byzantine process and explains a good deal of the arcane terminology for me.