The Compliance Cost of the U.S. Individual Income Tax System

Joel Slemrod, Nikki Sorum

NBER Working Paper No. 1401 (Also Reprint No. r0612)
Issued in June 1985
NBER Program(s):   PE

This paper uses evidence from a survey of Minnesota taxpayers to estimate the magnitude and demographic patterns of the compliance cost of filing federal and state income tax returns. It concludes that in 1982 this cost was between $17 and $27 billion, or from five to seven percent of the revenue raised by the federal and state income tax systems combined. About two billion hours of taxpayer time were spent on filing tax returns, and about $3 billion was spent on professional tax assistance.

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Published: Slemrod, Joel and Nikki Sorum. "The Compliance Cost of the U.S. Individual Tax System." National Tax Journal, Vol. 37, No. 4, (December 1984), pp. 4 61-474.

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