March 23, 2006

Few Linux, FOSS alternatives at tax time

Author: Jay Lyman

Linux users and open source fans have few options when it comes to computerized filing of their federal and state income taxes in the United States. Many electronic filers have security and data-loss concerns about filing with the Internal Revenue Service (IRS) or through tax service vendors. One open source alternative for filers in a few states is Open Tax Solver (OTS), and another possible future option is just emerging.

These recent projects leave little choice for FOSS users, but at least make filing with open source software or a Linux machine possible.

Filing by FOSS today

OTS developer Aston Roberts says his software is being updated for the 2005 tax year, with input from about 10 people. This GPLed project helped taxpayers in several US states and Canada meet the annual burden -- or as may be the case with FOSS community members, earn their refund -- last year.

Unfortunately, Roberts was slowed by health problems and a severe hardware failure this year. Still, he says there will probably be 2005 versions of OTS for California, Pennsylvania, New Jersey, and Massachusetts.

"Due to the unified package we adopted last year, I have been waiting for updates on all states before releasing the update," Roberts tells NewsForge. "To avoid further delays, I am contemplating reverting back to the original distribution format, where each form and state was released separately. Generally, these will be updated each year, and I expect a growing list of states as time allows."

Roberts says almost all tax software -- including popular programs such as TurboTax and TaxCut -- will calculate taxes, but describes OTS as an alternative method.

"It operates quite differently from the commercial packages, which tend to be question-oriented, or interview-oriented," he says. "For some people, the interview method may be better, but others have found the direct input approach of OTS to be quicker, especially to those who have done taxes before and basically know where to put their numbers, but want to automate the math."

Roberts says OTS, launched in late 2003, has actually gone better than he expected, with more than 50 contributors, many improvements, and a workload distributed beyond the original group of five developers.

"This year my health and PC problem got in the way, but I expect to get ahead again soon and to stay ahead for years to come," Roberts says.

Code is available

In the past, OTS produced 1040 forms and Schedules A, B, C, and D for California, New Jersey, New York, Ohio, Pennsylvania, and Virginia, and T1 forms for Canada. An optional GUI is available, and a preliminary version of the software for United Kingdom tax filing was posted for the 2003 tax year.

OTS user and contributor Robert Heller says there is no reason individuals interested in using OTS again for their 2005 taxes cannot simply download the 2004 sources and change "the handful of constants" to create a 2005 tax solver.

Heller updated the federal 1040 form, Schedule C, and Massachusetts form, and used them to file his own taxes for 2005, he says. "I uploaded my code to my FTP server and posted a message on the OTS forum on SourceForge," he reports.

"I'm not the 'official' developer for OTS, although I did write the Massachusetts income tax module and have been involved in updating the federal 1040 and Schedule C programs for both 2004 and 2005 tax years," Heller says. "The OTS code works just fine for me. I have had no use for Intuit's software."

Heller adds he is not sure whether Roberts or others have looked at his code, but it did work for him. "I won't make any guarantees," he says. "The code is available 'as is' for anyone who cares to download it and compile it."

An upcoming alternative

Meanwhile, the desire for free, easily accessible tax filing software led Richard Braman to found the Tax Code Software Foundation (TCSF), Braman says. The foundation's software will be available under OSI-approved licenses, he says, and will be viewable and available to the public for free. It will allow users to file taxes on Linux and other platforms. Linux users will not be able to use the software for filing this year, but can look forward to a beta release between April 15 and October 15, the end of the tax filing year, Braman says.

"We intend to test our 1040EZ software beta with the IRS's [participants acceptance testing] PATS for e-file sometime by mid-March," Braman says. "We will only test for 1040EZ. We also intend to test the form 4868 extension. We may offer a free extension service this year and a beta of the 1040EZ for some users after the 15th of April."

Braman, a Florida-based tax professional, says the software is based on XML tools, including XForms, XHTML, XMLSchema, XSLT, and Xpath, all of which are open standards. TCSF users will need a Web browser to use the software, and the foundation will host a public server where users can prepare and e-file returns.

"If you want to use the software on your own computer, that will be possible, using an XForms player or by running a servlet container that supports XForms," he says. "Either way, you would have to e-file through TCSF or another IRS authorized e-filer, because IRS does not offer e-file direct to taxpayers. We will make it a goal for every user of a modern operating system to [be able to] use Tax Code."

Arguing that tax software should be open source, publicly developed and reviewed, and available to the general public, Braman says the Foundation is working on arrangements with software firms that have XForms-based technologies. Already, the effort has received a great deal of support from Orbeon and Micah Dubinko, who edited Xforms, Braman says.

"I am a CPA and a programmer, so I am leading the tax professionals, but rely on my network of professional contacts for domain expertise," Braman says. He says TCSF is also "starting up and bootstrapping" in terms of sponsorship. "TCSF hopes to recruit other CPAs, enrolled agents, and tax attorneys to contribute to the project. Accountants usually carry a high degree of technical knowledge and most have advanced computer training. These folks stand to benefit greatly because they currently purchase expensive software licenses every year."

Although Braman is looking to the tax community for support, he concedes the bean-counting community "has no concept of open source." Nevertheless, he is optimistic the foundation can fold in the support of key players, including government administrators, professionals, and taxpayers.

Taxes are tricky, but do-able

In addition to the usual challenges of developing software and keeping a project going with volunteer help, tax filing software is made even trickier by its changing rules, variations by state, and intersection with the red tape of the IRS.

OTS contributor Heller finds it "hard to create a program that will work every year without having to edit it and recompile it each year" when the government continually makes minor changes. "If the tax laws were written like a proper software API with a set of 'global' configuration files that could be downloaded from and places like, and then be plugged into a 'fixed' program, that would be wonderful!"

Braman too says tax software can get very complex, with lots of calculations, government specifications, and data. "Much of the government specifications contain data that is critical to constructing tax software, and it comes very unstructured and is difficult to parse through," he says. "XML is just starting to make its way in as part of a modernization effort by the IRS, but it is not done for 1040 [filing], only for 1120 corporate returns."

Braman believes past efforts such as gnuTaxes, now inactive, suffered from a lack of e-filing functionality, as well as tax experience among developers. "I have commercially filed over 20,000 returns online for taxpayers in the last couple of years, so I know the issues involved in making a commercially viable product."

OTS developer Roberts says that although the tax forms change slightly each year, the basic forms in OTS usually require only a few lines or coefficient changes to be updated annually. "[It is] just a matter of reviewing the new forms and comparing the code," he says. "Another good reason for this to be an open source project is that many more eyeballs review and test the code."

True to the developer approach, Roberts believes tax software does not have to be too difficult, and he is hoping the open source community will help further FOSS filing.

"The tax rules are individually fairly simple," he says, quoting 'add this line to that line, subtract this' as an example. "They seem complicated en masse to people, but are mostly straightforward for a computer. There are no 'value judgments' in tax calculations, only in what numbers a filer chooses to enter on the input lines."

"OTS has been structured to be rapidly and easily updated by almost anyone for each year's changes," Roberts says. "By opening it to being a combined group effort, this work is further distributed and delegated. We are always looking for constructive comments and volunteers to help."

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