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 code’s 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.