10 / 24 / 11

Tax Compliance Puts US Taxpayers in the Red

The results of research done annually by the IRS indicates that the time, effort and money required by taxpayers to comply with individual tax preparation requirements averages $258.00 per year.

The statistics, made public last week in the Taxpayer Advocate Service report to Congress, shows clearly that reform is needed to ease the burdens experienced by American taxpayers.

If privatized, tax compliance would comprise one of the largest US industries in modern history.

Costs incurred by taxpayers were based on the 6.1 million hours spent preparing and filing taxes, in addition to the costs of paying a tax preparer, which is now an annual ritual for nearly 60 percent of those filing returns.

Nearly all those taxpayers who continue to prepare and file their own taxes, a staggering 29 percent, purchase tax filing software at an estimated cost per package of $50.00 or greater. This leaves only 11 percent to keep up with and struggle through the complex web of ever-changing tax laws without paid assistance.

Nina E. Olson, National Taxpayer Advocate, comments that use of extreme tax collection tactics, such as property liens, creates unnecessary stress and pain for struggling American families.

Fiscal year, 2010 saw an increase of 550 percent in filed liens in comparison to 168,000 in FY 1999, although a 2009 study conducted by the Taxpayer Advocate Service determined that there may be a possibility that lien filing may reduce collection costs, long-term.

A summary of the TAS report may be accessed on a new portion of the IRS website dedicated to the Taxpayer Advocate Service.

** Bryson Law Firm is a Louisiana law firm focusing 100% of our practice on helping people and businesses solve their IRS & LA state tax problems.