Tax Complexity Working Out Alright for CPAs

The IRS estimates that in 2016 American taxpayers will spend 8.9 billion hours preparing and filing taxes. To put that in perspective, 8.9 billion hours is 1,015,286 years or the amount of time it takes to play about three games of Monopoly.

The report goes on to estimate the cost of compliance at $409 billion. That’s a ridiculous amount of money. If you had $409 billion in $100 bills and started stacking the $100 bills one on top of another, in about 2 minutes, you’d have stacked enough money to pay someone else to stack $409 billion of $100 bills.

That also puts the billing rate for tax prep at $46 per hour. I call bullshit. The only person working in tax prep who’s charging less than $50 per hour is wearing a Statue of Liberty costume.

The $409 billion estimate puts the per capita tax prep cost at $1,267, which sucks for infants.

So who the hell is making all of that money? Intuit's total revenue for 2015 was $4.2 billion (and most of their revenue wasn’t from tax products), H&R Block’s revenue was $3.1 billion, and Liberty Tax’s wasn’t even $200 million (although to be fair, most Liberty Tax offices are franchises). That still leaves well over $400 billion of unaccounted-for tax compliance fees.

In comparison to the $409 billion Americans spend on tax compliance, we spend $100 billion less than that on prescription medications. And a huge part of the $309 billion we spend on prescriptions is for antidepressants to help us cope with complying with the U.S. Tax Code.

As accountants, this is all good news because a shit ton of that money comes to us. Tax complexity is our welfare.

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Comments are closed.

Related articles

How Intuit Can Help Your Career Thrive In the Remote Work Era

With the widespread adoption of remote and hybrid work structures and an increased reliance on technology, the past year has seen big changes to the accounting and finance professions. As many accountants and finance professionals face the reality that they won’t be returning to the office anytime soon (if at all), it’s clear that the […]

Where Does Janet Yellen Want to Be Taxed?

Presuming that Janet Yellen, our current secretary of the Treasury, lives in California, her marginal tax rate might be as high as 13.3%. That’s a little scary for those of us living here in Maryland. Good thing she knows how to handle finances. For that kind of tax rate she might easily be persuaded to […]