It’s a Taxing Effort That Is Best Ignored
According to the Internal Revenue Service, reading up on this year’s 1040 takes an average estimated time of only two hours and 31 minutes--after three hours and eight minutes of record-keeping. Another three hours and 23 minutes to prepare the form. Plus 41 minutes to copy, assemble and mail it, and presto--all done.
What a comfort.
Prominently mentioned on tax forms, prominently presented in the tax instructions under the heading “Paperwork Reduction Act Notice,” this information is more goad than comfort. Can the elderly or disabled really whip through their two-page Schedule R in 21 minutes? Can anyone absorb two IRS publications and instructions on estimated taxes in 20 minutes?
On whom were these tested? Graduates of Evelyn Wood Reading Dynamics courses?
What are we to make of these measures, by implication the successful outcome of paperwork reduction efforts? Nothing. The IRS doesn’t take these estimates as a measure of how well it simplified tax materials. The taxpayer, invited to comment on the estimates, ignores them.
The 1980 Paperwork Reduction Act was meant to cut down on all the forms required by the various federal bureaucracies.
Americans were spending an estimated 1.28 billion hours a year on such paperwork, half on IRS forms. With a goal of reducing this by 25%, all government agencies had to submit both their forms and a measure of the work hours required to fill them out to the Office of Management and Budget for review.
This naturally appealed to an incoming Administration hot to get government off our backs, and within two years, OMB was boasting that it had reduced the paperwork burden by about 200 million hours. (It was also found, later yet, to be using its paperwork review powers to ax regulations the Administration just didn’t like--product warnings, for instance.)
Federal agencies were soon accused of underestimating the time required to fill out their forms. It was therefore decided that the agencies should print the estimates right on the forms, so the public could judge whether they were fair and accurate.
Given that goal, the IRS notices haven’t proved real useful. For one thing, few people can track the time spent on “record-keeping” over a whole year, or even their work time preparing forms, with times out for pacing, head-banging and going back to the instructions.
What’s more, they’re not measuring themselves against peers: The IRS times are more estimates than averages, half human, half computer. They were compiled by Arthur D. Little in 1983 from such sources as diaries kept by 750 people of their work on that year’s taxes and questionnaires sent to another 6,200 taxpayers. From these, ADL developed a computer-based method of calculating average estimated times per form.
In any case, the IRS got little response when it first invited taxpayer comments on the estimated times in 1988. Even now, it gets only “a handful,” says Arthur Altman, IRS director of tax forms and publications.
The estimations aren’t very useful to the IRS either, at least in terms of spurring self-examination and precipitating change. The IRS already tries continually, say its booklets, “to create forms and instructions that are accurate and can be easily understood.”
More short, or “EZ,” forms have been introduced--for the 1040, the 940, the 5500 (Keogh), and soon maybe, Schedule C. The IRS has created “and-o-grams,” which copy those pathways to identification found in nature guides, as in, “If you earned less than $8,000 AND are single AND have two-inch leaves, go to P. 10.” A few forms even offer taxpayers the option of stopping halfway through and leaving the calculation to the IRS.
But these changes weren’t made because the estimated times seemed unacceptable. And even if they are unacceptable, the IRS says there are limits to what it can do. “If (something’s) difficult for most people,” Altman says, “we’ll do what we can to rectify it. But whatever we do, we can’t get beyond the complexity of the (tax) law.”
Obviously. Even under paperwork reduction, the essential tax forms have stayed essentially the same over the decade. On the 1040, for example, a few credits have been introduced, a few credits disappeared, the number of lines went from 66 to 68 and back to 65, and the color went from white to blue. But that’s it.
Even the paperwork times changed little. Since 1988, the IRS has cut only five minutes off the 1040A’s preparation time of two hours and 56 minutes, and two minutes off its reading time of two hours and 13 minutes.
In fact, those estimated times are less useful as tools--for either taxpayer or IRS--than as ammunition. The computer model allows the IRS to calculate the effect of adding or subtracting lines on any form, increasing or decreasing times, Altman says, “as the burden we impose increases or decreases.”
Thus, the IRS can show OMB the time supposedly saved with any change, or tell a congressional subcommittee, says Altman, “look, if you pass this proposal, this is what you’re going to do to the times.”
And the taxpayer? Save time: Ignore the notice. It’s just one federal bureaucracy talking to another.
