You know a pretty good solo software business for the next few years would be “Upload your past tax returns, we run them by an LLM and file amended returns if we find any where juice is worth the squeeze, you pay us 30 cents on the refund dollar and nothing until you get paid.”
There is at least one firm that does this just for a single credit, and very scaled consultancies doing it for corporate returns on some larger credits, but when you think of how many $500 mistakes people are making with TurboTax or HR Block…
“Can’t file the return though unless…” Unless you are capable of finding an IRS enrolled agent to review the computer’s findings. Very solvable problem; many software businesses have put together the stable of licensed pros ready to get a $30-75 spiff for 10 minutes of work.
This may in fact not work: https://www.irs.gov/pub/irs-pd... Ctrl-F “contingent”
@patio11 Who swallows the added audit risk?
@kchoudhu Implementation detail; it’s minuscule. How minuscule depends on who the customer base is and what sort of mistakes you’re catching, but my guess is modal issue is “Didn’t take a deduction I’m uncontroversially qualified for; next tax impact $2k” and that should cause ~0 audits.
@patio11 Why would a LLM be good a income taxes?
@SchraderValves The short answer is “Do you care why they are good if they actually _are_ good.” I pay $10k a year for tax filing; trivial prompt got Claude to find a $2k legit savings ~instantly. People have reported similar experiences to me.
@patio11 Besides the Circular 230 issue, the IRS takes an insane length of time to process and pay these amended returns. You still need to eat. Waiting literally years to get paid would not be fun. And now you have to track it, too.
@RyanD1020 Those are the sort of issues that the software/financial complex salivates over. So valuable to solve, so solvable with existing approaches.
@patio11 Its a nice theory but in practice would be a dumpster fire. Amended returns are the most annoying part about taxes. The IRS holds them up constantly for no reason.
@patio11 Interesting idea. I think it is possible, at least for personal use. Let's try this out.
@patio11 I explored this idea about 8 years ago and even became an IRS enrolled agent (I can do your taxes in theory). I'm sure it'd work better today with AI, but it was so fucking boring and I couldn't find any co-founders. This site has my notes: https://github.com/fengtality/...
@patio11 I’ve thought about doing folks taxes for free with CPA as part of an RIA, and this would be a nice value add.
@patio11 We've thought about this a bunch @ColumnTax - very interesting for a prior year return product. Would have to be a flat fee though (can't do tax prep on a contingent basis).
@patio11 It definitely works. I’ve already figured out various effective prompts and workflows while filing my 2024 returns, as detailed here: https://fixmydocuments.com/blo...
@patio11 “Run past years’ returns through LLM to see if we [CPA and I] missed anything” is currently on my ToDo list. Definitely seems like a valid and useful business idea!
@patio11 or call center agent which resolves your customer query, or sales agent which got u a client or marketing agent which brings traffic to your website.
@patio11 Are you gonna flog this to tax _payers_ or to tax _collectors_ ?
@patio11 Vaguely related: tax planning software seems like an underserved niche? There are estimation tools on Bogleheads, but they seem like kind of a mixed bag: https://www.bogleheads.org/wik... Who might use this? Perhaps software developers with appreciated stock.
@patio11 let me know if you want http://AmendReturns.com
@patio11 I like the part where the LLM reaches into the real world to determine what activities I engage in that have taxable impact
@patio11 Seems like a problem would be that for a substantial refund it's also worth it take the info from the LLM and just file it myself bypassing the 30% fee.
@patio11 What do you do when your aggressive LLM's amended returns get me audited?
@patio11 Only issue is it’s probably the case that a lot of those small errors go the other way, and the person owes more. Where is the line between a small business claiming legitimate expenses and fraud? Though I suppose I’ve been surprised at where IRS officials do draw that line …
@patio11 Could go direct, or might also be interesting to sell at a flat rate to tax preparers for them to offer as an add on white label service.
@patio11 Patrick, I love your stuff, but tax is not your strong suit. This model would get someone's license revoked under Circ 230...Accountants cannot generally charge contingent fees You give some examples, but there is a lot of nuance
@patio11 Pretty sure Circ 230 forbids this as a contingent fee
@patio11 Here's a free logo and photo of the "founders" you can use for this business
