The House Ways and Means Committee will start hearings Thursday (1/20/11) on reforming our enormously costly and always expanding tax code.
The IRS National Taxpayer Advocate recently released its annual report to Congress, and noted that the tax code has swelled from about 700,000 words in 1975 to 3.8 million words today. The same report found there were 4,428 changes to the tax code - about one a day - over the past decade, and in 2010 there were 579 changes to the code.
The report also reveals the amount of time and money spent complying with the current code, and noted that an analysis of IRS data found that taxpayers and businesses spend 6.1 billion hours a year to comply with the code. The report says "If tax compliance were an industry, it would be one of the largest in the United States. To consume 6.1 billion hours, the 'tax industry' requires the equivalent of more than three million full-time workers."
The report finds that about 90 percent of taxpayers use a tax preparer or software programs to file their taxes, but the IRS still got 110 million calls from taxpayers in the last two years. Olson said the IRS was unable to answer 25 percent of the calls-roughly 55 million calls over two years.