Right Data: The cost of complying with federal income taxes

DONE your taxes yet? About half the 58 million people who file 1040 forms this year will do the work themselves, spending an average of nearly 12 hours trying to comprehend and comply. The 1040, of course, is just one of many forms and schedules Americans must contend with. According to the IRS, businesses will spend 3.4 billion hours and individuals about 1.8 billion hours on tax paperwork. That’s equivalent to 3 million people—more than the entire armed forces—doing nothing but taxes all year.

Why does it take so much time and effort to comply with the tax code? Consider the sheer size of the tax code and the number of times it has changed. From 1954 to 1994 the number of words in the income-tax code increased to more than 800,000 from less than 200,000. On average, each section of the tax law is amended every four years. With each amendment come new forms, instructions, and record keeping.

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Ed Rubenstein

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DONE your taxes yet? About half the 58 million people who file 1040 forms this year will do the work themselves, spending an average of nearly 12 hours trying to comprehend and comply. The 1040, of course, is just one of many forms and schedules Americans must contend with. According to the IRS, businesses will spend 3.4 billion hours and individuals about 1.8 billion hours on tax paperwork. That’s equivalent to 3 million people—more than the entire armed forces—doing nothing but taxes all year.

Why does it take so much time and effort to comply with the tax code? Consider the sheer size of the tax code and the number of times it has changed. From 1954 to 1994 the number of words in the income-tax code increased to more than 800,000 from less than 200,000. On average, each section of the tax law is amended every four years. With each amendment come new forms, instructions, and record keeping.