The $163 billion tax question

It’s not often that government reports make for interesting reading – especially one published by the IRS.  But the National Taxpayer Advocate’s 2010 Annual Report, released earlier this month, is different.  Among the more fascinating findings:  

U.S taxpayers and businesses spend 6.1 billion hours a year complying with the tax codes requirements.
It would require more than three million employees to work those 6.1 billion hours.  That’s more than the number of people who work for IBM, General Electric, PepsiCo, Coca-Cola, AT&T, Verizon, Boeing, Home Depot, ExxonMobil, McDonalds, Bank of America, Proctor & Gamble, and Johnson & Johnson combined.  
The cost of complying with the tax code amounted to $163 billion in 2008.
Over the past decade, there have been 4,428 changes made to the tax code – an average of more than one per day.  
All the various tax breaks embedded in the tax code – exclusions, deductions, tax credits – now total $1.1 trillion per year.  That’s trillion with a “t”.  
The IRS sends over 200 million pieces of mail every year.  Nearly 20 million get returned as “undeliverable” – at a cost of nearly $58 million per year.  
The current tax code contains 3.8 million words.  By comparison, the U.S. Constitution has 4,400 words; the Declaration of Independence has 1,337 words; the King James Bible has 783,137 words.  
The IRS received 110 million calls in each of the last two years, but was unable to answer more than 25 percent of them.  
Guidance published by the Treasury Department to “help” taxpayers understand the code now stands about a foot tall.  

 Both the Obama Administration and the House Republican majority call tax reform a top economic priority.  The 2010 taxpayer advocate report shows the urgency of that need.