Estimating the Costs of Filing Tax Returns and the Potential Savings from Policies Aimed at Reducing These Costs

This paper estimates the cost of filing taxes and assesses several policy proposals aimed at reducing these costs. Using US tax returns, a quasi-experimental method and additional extrapolations based on survey evidence, I uncover three main findings. First, filing costs are large and have been stea...

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Bibliographic Details
Published in:NBER Working Paper Series 2020-10
Main Author: Youssef Benzarti
Format: Article
Language:English
Subjects:
Cost control
Economic theory
Tax returns
Online Access:Get full text
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Summary:This paper estimates the cost of filing taxes and assesses several policy proposals aimed at reducing these costs. Using US tax returns, a quasi-experimental method and additional extrapolations based on survey evidence, I uncover three main findings. First, filing costs are large and have been steadily increasing over time. Second, part of this increase in filing costs can be attributed to an increase in the number of schedules filed per taxpayer. Third, pre-populating tax returns and offering free filing options can result in substantial cost savings for taxpayers.
ISSN:0898-2937
DOI:10.3386/w27946