Submitted by: Submitted by tazzydevil1993
Views: 69
Words: 353
Pages: 2
Category: Business and Industry
Date Submitted: 10/30/2014 09:50 AM
Reckoning The Costs Of Federal Tax Compliance?
Abstract
Tax compliance is the course for the federal paperwork burden. Businesses and individuals must keep up with the constant rules and regulation changes in order to be compliant with the Department of Treasury. This article brief will discuss how the costs of federal tax compliance affect the paperwork burden.
Introduction
Over the years, tax laws have increased tremendously that companies have to do so much work in order to remain compliant with the new rules and regulations. Tax compliance for individuals and businesses account for majority of the federal paperwork burden. The department of Treasury accounts for majority of the burden with 75 percent of the total government-wide total.
The Costs Of Federal Tax Compliance
The Office of Management and Budget states that they federal paperwork costs are about $250 billion in today’s dollars. Paperwork hours for the preparation of taxes alone adds to the amount of money spent on compliance by individuals and businesses. “The National Taxpayers Union found federal tax compliance to cost $226 billion, with the labor required for tax compliance to amount to $192.6 billion and tax software at $31.7 billion.” The Office of Management and Budget guideline believes that the loss associated with taxation is because of deadweight loss, which is 25 percent of revenues. A deadweight loss is a “departure from economic efficiency resulting from the distorting effect of taxes.” It is called a deadweight loss or excess burdens because they disadvantage society without adding to Treasury receipts. The Patient Protection and Affordable Care Act (Obamacare) will create more complexity, which will increase the amount of hours spent on tax preparation and the costs to be compliant.
Conclusion
The ultimate purpose for the Department of Treasury changing and implementing new rules and regulations was not to make it hard for compliance. Although that wasn’t the...