Business taxpayers spend time and money--and experience frustration--trying to comply with federal, state, and local tax requirements. GAO refers to this as the taxpayer compliance burden. GAO testified that the complexity of the Internal Revenue Service Code, compounded by changes made to the Code, is the driving force behind federal tax compliance burdens. Further, a reliable estimate of the overall costs of tax compliance is not now available and would be costly and in itself burdensome to obtain. Finally, reducing the compliance burden will be a difficult undertaking because of the various policy trade-offs, such as revenue and taxpayer equity, that must be made.

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