Cost of filing taxes: 15 hours of 'lost time'

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Paul Bedard,Washington Secrets,Taxes,Treasury,National Taxpayers Foundation,IRS,National Taxpayers Union

Simply filing taxes and complying with Uncle Sam's tax code costs the U.S. 6.1 billion hours and $224.3 billion, a jaw-dropping amount that when reduced to individual filers totals $90 billion in "lost time" to meet the April 15 tax filing deadline, according to a "tax day" analysis.

The National Taxpayers Union's annual report, provided in advance to Secrets, determined that the 6.1 billion hours alone required by individuals and corporations to comply equals over 3 million employees working 40-hour weeks with just two weeks off. That's bigger than the workforce of McDonald's, Target and Walmart combined.

It's so complicated, that over half the nation hires somebody to prepare their taxes. NTU said that 55.7 percent of returns are signed by a tax preparer. The average cost of that help has surged to $198, according to H&R Block figures cited by the tax group.

And paper and pencil are out as Americans who don't hire an accountant have shifted to computer programs like TurboTax. NTU estimates that 95 percent of taxpayers will file electronically.

“Like old age, tax complexity has been creeping up on us. We may not notice it one year at a time, but a review of past years' tax documents compared to today's forms and instructions reveals just how shockingly complicated taxes have become,” said the 21-page review of how unwieldy the tax code has become.

The report, which does not include the costs of complying with state and local taxes, is based in part on information from the IRS, the National Taxpayer Advocate, and IRS regulatory filings.

NTU said that the complexity revealed in their report, “A Taxing Trend: The Rise in Complexity, Forms, and Paperwork Burdens,” demands Congress reform the tax code.

The report written by NTU’s David Keating reveals one shock after another. Among the highlights:

— The tax code is 3,951,101 words long, or nearly seven times the length of Leo Tolstoy’s “War and Peace.”

— Directions for the basic Form 1040 have grown from two pages nearly 80 years ago to 207 pages this year.

— For individuals, it takes about 15 hours to comply. That adds up to a whopping $90.3 billion in "lost time."

— The average wait time for help from the IRS call line is 15.5 minutes.

“Fundamental overhaul of our tax system remains a national priority. As the Internal Revenue Code becomes increasingly incomprehensible, the intrusive measures provided to the IRS for enforcing it become even more disturbing,” said the NTU in the report to be issued Tuesday.

“As this study has hopefully shown, people are already paying plenty for a complex tax system, sometimes directly out of their own pockets, other times through less tangible ways – in the form of lost economic productivity and diminished personal freedoms. That’s why reforming our tax system, and reducing its complexity, must remain at the top of Washington’s policy agenda,” wrote Keating.

See the full report here.

Paul Bedard, the Washington Examiner's "Washington Secrets" columnist, can be contacted at pbedard@washingtonexaminer.com.