Tax Forms Cost Americans Billions of Hours - and Dollars, Taxpayer Group's Study Finds

ALEXANDRIA, Va., April 15 /PRNewswire-USNewswire/ -- Temporary tax credits may have made paying federal income taxes a little less burdensome, but filing paperwork and keeping up with the laws is as costly and time-consuming as ever. According to the National Taxpayers Union's (NTU) 12th annual study of tax complexity trends, American families and businesses spend over 7.5 billion hours complying with federal tax requirements, while individuals pay over $100 billion for their time and out-of-pocket filing expenses.

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"The red flags that pop up from NTU's Taxing Trend study should give us pause to ask: How much more complexity can elected officials keep inflicting on the tax system before it collapses under its own weight?" said NTU Senior Counselor and study author David Keating. "Our economy and civil liberties would be better off with a simpler system." Findings include:

• Treasury Department paperwork, over 90 percent of which consists of personal and business income tax forms, imposes a burden of 7.6 to 7.8 billion hours on Americans. That's the equivalent of some 3.7 million employees working 40-hour weeks year-round without any vacation – more than are employed at the five biggest private companies.
• Individual (non-business) taxpayers will spend about 2.43 billion hours complying with income tax laws this year. The value of this time is worth an incredible $71.4 billion. They'll also spend a lot of money: an estimated $31.5 billion for tax software, tax preparers, postage, and other direct out-of-pocket costs.
• The instruction book alone for the 1040 "long" form consists of 174 pages – 13 pages more than the previous year's publication.
• Today's 1040A "short" form, at 49 lines, has double the number of lines on the 1945 version of the standard 1040 tax return.  The short form's instructions total 92 pages, more than the long form's booklet from 1995!
• A search of the most recently published Tax Code shows a total of 3,784,745 words. Changes from 2009 and 2010 have yet to be inserted in the government's official Tax Code.

NTU is a nonpartisan, nonprofit citizen organization founded in 1969 to work for lower taxes, smaller government, and economic freedom at all levels. NTU Policy Paper 127, A Taxing Trend, is available online at www.ntu.org.

SOURCE National Taxpayers Union