Research

The Cost of Tax Compliance Report 2026: The Hours and Dollars Behind the Tax Code

By The Ledgerism Editorial Team · The Ledgerism Brief Editorial Team produces original, methodology-disclosed accounting and tax research—data trackers, databases, and reference guides built to be the most-cited source in the field. Every figure is verified against primary sources including FASB, the IRS, the PCAOB, NASBA, the AICPA, and state boards of accountancy.

The Ledgerism Brief original research. This report is a definitive data profile of the cost of complying with the U.S. federal tax code: the hours spent, the dollars spent, the split between individuals and businesses, the IRS paperwork burden behind the numbers, and how the total stacks up against U.S. GDP and against the revenue the system actually collects. It complements, and does not duplicate, the Ledgerism Tax Code Complexity Index (which measures the size and complexity of the law itself). This report measures the price of obeying it.

The two most-cited independent estimates of total federal compliance cost disagree by roughly 12 percent, so both are reported side by side rather than merged. Every figure carries its exact source, tax year, and geography. All figures are for the United States, federal taxes only.

Executive summary

• Americans spent an estimated 6.93 billion hours complying with the federal tax code for the 2026 filing season (tax year 2025), at a total cost of more than $477 billion, per the National Taxpayers Union Foundation, which draws its hours from federal Paperwork Reduction Act data cleared by the Office of Information and Regulatory Affairs (NTUF, April 13, 2026).
• The Tax Foundation, using the same OIRA source data but higher wage rates and a broader form scope, put the tax year 2025 compliance cost higher, at $536.1 billion, equal to about 1.8 percent of U.S. GDP (Tax Foundation, August 27, 2025, updated October 9, 2025).
• The average individual filer spends about 12 hours and $290 out of pocket on a federal return; non-business filers average 8 hours and $160, while filers with business income average 21 hours and $610 (NTUF, February 2, 2026 and April 13, 2026).
• The single most burdensome collection is not the 1040 but Form 1099-B (broker and barter proceeds), which the IRS estimates at about 2.18 billion hours against roughly 4.36 billion expected submissions (OIRA/RegInfo.gov data via NTUF and Tax Foundation, 2025).
• Individual income tax returns (the Form 1040 family) account for about 2.13 billion hours and $146.9 billion, and U.S. business income tax returns for about 935 million hours and $126.3 billion, in tax year 2025 (Tax Foundation, August 27, 2025).
• The Treasury Department, driven almost entirely by the IRS, accounts for the majority of the entire federal government’s paperwork burden on the public, historically around 60 to 74 percent of all federal information-collection hours (Congressional Research Service; Government Accountability Office; NTUF).
• Federal tax compliance cost the equivalent of about 1.8 percent of U.S. GDP in 2025, a share larger than the 1.7 percent of GDP the corporate income tax was projected to collect that year (Tax Foundation, August 27, 2025).
• Set against the $5.1 trillion the IRS collected in fiscal year 2024, a $477 billion to $536 billion compliance cost equals roughly 9.4 to 10.5 cents of private compliance spending for every dollar of federal tax the IRS took in (Ledgerism derivation from NTUF/Tax Foundation cost estimates and IRS FY2024 Data Book).
• Total compliance hours peaked near 7.93 billion in 2023 and have declined for two consecutive years, partly from IRS burden-model revisions and post-2017 simplification, even as new credits add complexity back (NTUF, April 13, 2026).

Key findings

1. U.S. taxpayers spent about 6.93 billion hours complying with federal taxes for the 2026 filing season, tax year 2025 (National Taxpayers Union Foundation, April 13, 2026).
2. The NTUF total compliance cost for tax year 2025 was more than $477 billion: $319.7 billion in the value of time plus at least $157.1 billion in out-of-pocket costs (NTUF, April 13, 2026).
3. The Tax Foundation independently estimated the tax year 2025 compliance cost at $536.1 billion: $388.1 billion in time value plus $148.1 billion out of pocket, on 7.087 billion hours (Tax Foundation, August 27, 2025).
4. Federal tax compliance equaled about 1.8 percent of U.S. GDP in 2025 (Tax Foundation, August 27, 2025).
5. That 1.8 percent share exceeded the 1.7 percent of GDP the corporate income tax was projected to raise in 2025 (Tax Foundation, August 27, 2025).
6. The most burdensome single IRS collection is Form 1099-B at about 2.18 billion hours and roughly 4.36 billion expected submissions in 2025 (OIRA/RegInfo.gov via Tax Foundation and NTUF, 2025).
7. The Form 1040 individual return family accounts for about 2.13 billion hours and $146.9 billion in tax year 2025 (Tax Foundation, August 27, 2025).
8. U.S. business income tax returns account for about 935 million hours and $126.3 billion in tax year 2025 (Tax Foundation, August 27, 2025).
9. Quarterly employment tax filings account for about 470 million hours and $47.3 billion in tax year 2025 (Tax Foundation, August 27, 2025).
10. The average individual filer spends about 12 hours and $290 out of pocket on a federal return (NTUF, February 2, 2026).
11. Non-business Form 1040 filers, about 71 percent of returns, average 8 hours and $160 out of pocket (NTUF, April 13, 2026).
12. Form 1040 filers with business income, about 29 percent of returns, average 21 hours and $610 out of pocket (NTUF, April 13, 2026).
13. Small corporations average about 40 hours and $3,900 out of pocket per return; large corporations with $10 million or more in revenue average about 610 hours and more than $69,000 (NTUF, April 13, 2026).
14. Filers earning under $25,000 average about 11 hours and $125 out of pocket, per IRS burden data (NTUF, February 2, 2026).
15. Filers earning $475,000 to $500,000 average more than 22 hours and more than $1,400 out of pocket (NTUF, February 2, 2026).
16. The IRS Form 1040 instructions estimate 8 hours of total time for a taxpayer without business income and 21 hours for one with business income (IRS, 2025 Instructions for Form 1040).
17. The IRS attributes about 3 of those 8 non-business hours to recordkeeping and 10 of the 21 business hours to recordkeeping, the largest single activity (IRS, 2025 Instructions for Form 1040).
18. Aggregate individual income tax compliance hours were projected to fall from 2.129 billion in tax year 2024 to 1.948 billion in tax year 2025, a drop of about 181 million hours (NTUF, February 2, 2026).
19. New credits under the One Big Beautiful Bill Act are estimated to generate nearly 26 million additional compliance hours (NTUF, February 2, 2026).
20. New digital asset reporting requirements are projected to add more than 6 million compliance hours (NTUF, February 2, 2026).
21. Total federal compliance hours peaked near 7.93 billion in 2023 and have declined for two consecutive years since (NTUF, April 13, 2026).
22. The IRS collected a record $5.1 trillion in gross revenue in fiscal year 2024, the first year above $5 trillion (IRS, Fiscal Year 2024 Data Book).
23. IRS collections account for about 96 percent of all federal government funding (IRS, Fiscal Year 2024 Data Book).
24. The Treasury Department, driven by the IRS, has been responsible for the majority of all federal paperwork burden hours on the public since at least fiscal year 2009 (Congressional Research Service, Paperwork Reduction Act overview).
25. The NTUF valued taxpayer time for tax year 2025 at about $46.15 per hour, based on average private-sector compensation as of December 2025 (NTUF, April 13, 2026).
26. The Tax Foundation valued individual filer time at about $46.15 per hour and business preparer time at about $58.45 per hour for accountants and auditors (Tax Foundation, August 27, 2025).
27. Depreciation and amortization filings (Form 4562) alone accounted for about 448 million hours in tax year 2025 (Tax Foundation, August 27, 2025).
28. The IRS reviewed OIRA/RegInfo.gov burden estimates across roughly 446 individual information collections in the source data underlying these studies (NTUF, April 9, 2025).
29. Out-of-pocket cost estimates were available for only about 30 of 446 IRS collections, a major gap flagged by NTUF (NTUF, April 9, 2025).
30. The NTUF earlier estimated tax year 2024 compliance at 7.1 billion hours and $464 billion ($316 billion time value plus $148 billion out of pocket) (NTUF, April 9, 2025).
31. The National Taxpayer Advocate’s 2025 Annual Report to Congress, released January 28, 2026, again identified tax code complexity and paperwork burden among the most serious problems facing taxpayers (National Taxpayer Advocate, 2025 Annual Report to Congress).
32. Congress has made roughly 9,630 changes to the Internal Revenue Code since 2000, a driver of recurring compliance cost (NTUF, April 13, 2026).
33. As a share of the $5.1 trillion collected in fiscal year 2024, the tax year 2025 compliance cost equals about 9.4 percent (NTUF $477B) to 10.5 percent (Tax Foundation $536.1B) (Ledgerism derivation).
34. The historical low-water reference point in the NTUF series was about 6.08 billion hours in 2020, following the 2017 Tax Cuts and Jobs Act (NTUF, April 15, 2022).

Section 1: The headline number, and why two credible estimates disagree

There is no single official “cost of tax compliance” figure published by the U.S. government. The IRS discontinued its dedicated Taxpayer Compliance Burden reports, so the two most-cited aggregate estimates are produced by independent research organizations that both start from the same raw material: the burden-hour estimates the IRS files under the Paperwork Reduction Act, which are cleared by the Office of Information and Regulatory Affairs (OIRA) and posted on RegInfo.gov.

The two estimates diverge for methodological reasons, not because one is wrong:

Sources: NTUF (April 13, 2026 and April 9, 2025); Tax Foundation (August 27, 2025).

The gap between the two 2025 figures, about $59 billion, is driven mainly by the Tax Foundation applying a higher, occupation-specific wage to business-preparer hours ($58.45 for accountants and auditors) while NTUF applies a single blended private-sector rate. Both anchor their hour counts to OIRA/RegInfo.gov. Where this report needs one number, it presents the range ($477 billion to $536 billion for tax year 2025) rather than a false-precision midpoint.

What the numbers mean. Compliance cost is a deadweight loss: it is money and time spent obeying the tax system that produces no tax revenue and no economic output. It sits on top of the tax paid, not inside it.

Section 2: The IRS paperwork burden behind the estimates

The hour counts originate in the federal Paperwork Reduction Act (PRA) process. Every IRS form carries an OMB-cleared burden estimate: the hours the IRS believes the public will spend completing it, multiplied by expected submissions. These estimates are posted on RegInfo.gov and are the backbone of both aggregate studies.

Key structural facts about the IRS paperwork burden:

• The Treasury Department, almost entirely the IRS, is the single largest source of federal paperwork burden. The Congressional Research Service and prior Government Accountability Office testimony put tax paperwork at a majority of all federal information-collection hours, historically cited in the 60 to 74 percent range (Congressional Research Service, Paperwork Reduction Act overview; GAO historical testimony).
• The burden is concentrated in a handful of high-volume information returns. Form 1099-B alone (broker and barter proceeds) carries about 2.18 billion hours against roughly 4.36 billion expected submissions, making it the single most burdensome collection, larger than the entire Form 1040 individual return family (Tax Foundation, August 27, 2025; NTUF, April 13, 2026).
• Out-of-pocket cost data is badly incomplete. NTUF found out-of-pocket cost estimates for only about 30 of 446 IRS information collections, and flags that the IRS records many costs as “zero” when the true value is “unknown,” which understates the real dollar burden (NTUF, April 9, 2025).

Limitation to flag. Because the IRS stopped publishing its own consolidated Taxpayer Compliance Burden reports, the derived aggregates depend on researchers reconstructing totals from hundreds of individual PRA line items. The National Taxpayer Advocate and NTUF have both called for the IRS to resume dedicated compliance-burden reporting to give lawmakers clearer, official numbers.

Section 3: Cost by form and collection type (tax year 2025)

The Tax Foundation’s tax year 2025 breakdown, built from OIRA/RegInfo.gov data accessed June 4, 2025, is the most granular public form-level view.

Source: Tax Foundation, “Tax Complexity Now Costs the US Economy over $536 Billion Annually,” August 27, 2025 (data from OIRA/RegInfo.gov).

Reading the table. The individual Form 1040 family is the most visible cost to households, but it is not the largest single line: information reporting (led by 1099-B) and business returns each rival or exceed it. The out-of-pocket column is blank for 1099-B and depreciation because the IRS has not published cost estimates for those collections, an example of the “zero vs unknown” gap.

Section 4: Cost by taxpayer type (individual vs business)

The compliance burden is steeply unequal. A simple wage earner filing a 1040 with a standard deduction faces a light burden; a small business owner or a large corporation faces a burden orders of magnitude larger.

The IRS Form 1040 instructions corroborate the individual split from the government side: the 2025 instructions estimate 8 total hours for a taxpayer without business income and 21 total hours for a taxpayer with business income, with recordkeeping the largest activity in both cases (about 3 of 8 hours, and about 10 of 21 hours).

Source: IRS, 2025 Instructions for Form 1040, “Estimated Average Taxpayer Burden for Individuals by Activity.”

What this means. The tax code’s compliance cost is regressive in time-per-dollar terms at the bottom and highly concentrated at the top. A large corporation’s 610-hour, $69,000+ burden per return is roughly 76 times the hours and more than 400 times the out-of-pocket cost of a typical wage earner’s return.

Section 5: Cost by income level (individuals)

IRS burden-model data, surfaced by NTUF, shows compliance cost rising sharply with income, driven by more schedules, more information returns, and more professional help.

Reading the table. Out-of-pocket cost roughly 11-folds from the lowest band to the near-$500,000 band ($125 to more than $1,400), while hours only about double (11 to 22+). Higher-income filers buy their way out of some of the time burden with paid preparers, converting hours into dollars.

Section 6: Compliance cost as a share of GDP and of revenue collected

This is where the raw dollar figure becomes a policy statistic.

Share of GDP. The Tax Foundation put tax year 2025 compliance cost at about 1.8 percent of U.S. GDP, and noted this exceeds the 1.7 percent of GDP the corporate income tax was projected to raise that year (Tax Foundation, August 27, 2025). In other words, the country spends more obeying the tax code than the corporate income tax brings in.

Share of revenue collected. The IRS collected a record $5.1 trillion in fiscal year 2024 (IRS, Fiscal Year 2024 Data Book). Dividing the tax year 2025 compliance-cost estimates by that collection base gives the compliance-to-revenue ratio:

Source: Ledgerism derivation from NTUF (April 13, 2026), Tax Foundation (August 27, 2025), and IRS Fiscal Year 2024 Data Book. Limitation: the compliance-cost estimates are tax year 2025 while the revenue figure is fiscal year 2024, the most recent full-year gross-collections figure available; the ratio is therefore approximate and labeled as such.

What this means. For every dollar of federal tax the IRS collected, the private economy spent roughly 9 to 11 cents in time and money just to comply. That compliance spending produces no revenue and no output.

Section 7: The compliance-cost time series

The aggregate has moved with major tax legislation. It rose through the 2000s, spiked after the Affordable Care Act, fell after the 2017 Tax Cuts and Jobs Act, and has recently declined again, partly from IRS burden-model revisions.

Limitation to flag. Dollar figures across years are not directly comparable: the value-of-time wage rate rises each year with compensation growth, so part of any cost increase reflects wage inflation, not added complexity. Hour counts are the cleaner complexity signal. The 2015 figure is included only as a historical anchor and should not be read as current.

Original synthesis: three Ledgerism-derived insights

Insight 1: The Compliance-to-Revenue Ratio (CRR)

Logic. Total federal compliance cost divided by total federal tax revenue collected, expressed as cents of compliance cost per dollar collected. This reframes an abstract “$477 billion to $536 billion” as a friction rate on the tax system.

Formula. CRR = Total compliance cost (TY2025) / IRS gross collections (FY2024).

Inputs. NTUF $477B and Tax Foundation $536.1B (both TY2025); IRS $5.1T gross collections (FY2024 Data Book).

Result. CRR = 9.4 to 10.5 cents per dollar collected (a range, given the two cost estimates).

Limitation. Numerator (TY2025) and denominator (FY2024) periods differ by roughly one year; FY2024 is the latest full-year gross-collections figure. The ratio is a magnitude indicator, not a precise accounting measure.

Insight 2: The Burden Concentration Ratio (individual vs corporate)

Logic. How many times heavier is the largest corporate compliance burden than a typical wage earner’s, on both time and money? This quantifies the inequality of the compliance system.

Formula. Time ratio = large-corporation hours / non-business 1040 hours; Cost ratio = large-corporation out-of-pocket / non-business 1040 out-of-pocket.

Inputs. Non-business 1040 filer: 8 hours, $160. Large corporation ($10M+ revenue): 610 hours, $69,000+ (both NTUF, April 13, 2026).

Result. Time ratio = 610 / 8 = about 76x. Cost ratio = $69,000 / $160 = about 431x.

Limitation. Per-entity corporation figures are single-source (NTUF) averages and mask wide variation within the “large corporation” category. They are averages, not medians.

Insight 3: The “Corporate-Tax-Equivalent” framing of compliance cost

Logic. Compliance cost is easier to grasp when compared to a familiar revenue stream. The Tax Foundation observed that TY2025 compliance cost (about 1.8 percent of GDP) exceeds projected corporate income tax revenue (about 1.7 percent of GDP). Ledgerism extends this: express the compliance burden as a percentage of the corporate income tax it exceeds.

Formula. Compliance-to-corporate ratio = compliance cost share of GDP / corporate income tax share of GDP.

Inputs. Compliance cost 1.8 percent of GDP; corporate income tax 1.7 percent of GDP (both Tax Foundation, August 27, 2025).

Result. Compliance cost equals about 106 percent of projected corporate income tax revenue in 2025. The nation spends slightly more complying with the tax code than the entire corporate income tax raises.

Limitation. Both shares are Tax Foundation estimates for the same year and rest on the same GDP denominator, so the ratio is internally consistent but inherits the Tax Foundation’s cost methodology; under the lower NTUF cost estimate the ratio would be somewhat below 100 percent.

Charts to create

1. “The two estimates” bar chart. Title: U.S. Federal Tax Compliance Cost, TY2025: Two Independent Estimates. Data: NTUF $477B (split time/out-of-pocket) vs Tax Foundation $536.1B (split). Source: NTUF April 13, 2026; Tax Foundation August 27, 2025. Insight: shows the credible range and the methodology gap. Citation-worthy because journalists routinely cite one figure without the range.
2. Cost-by-form treemap. Title: Where the Tax-Compliance Hours Go (TY2025). Data: 1099-B, 1040 family, business returns, employment tax, depreciation, with hours and dollars. Source: Tax Foundation, August 27, 2025. Insight: 1099-B, not the 1040, is the single biggest line.
3. Burden by taxpayer type. Title: Hours and Dollars Per Return, by Filer Type. Data: non-business 1040, business 1040, small corp, large corp. Source: NTUF, April 13, 2026. Insight: the 76x/431x concentration.
4. Compliance-cost time series. Title: Federal Tax Compliance Hours, 2015 to 2025. Data: annual hours. Source: NTUF multi-year. Insight: 2023 peak and two-year decline.
5. Compliance-to-revenue gauge. Title: 9 to 11 Cents Per Dollar Collected. Data: CRR range. Source: Ledgerism derivation. Insight: the friction rate on the whole system.

Methodology

Source selection. Tier-1 sources were prioritized: IRS (Form 1040 instructions burden table, Fiscal Year 2024 Data Book), the Office of Information and Regulatory Affairs burden data on RegInfo.gov, and the National Taxpayer Advocate. Because the IRS discontinued its consolidated Taxpayer Compliance Burden reports, the two aggregate estimates come from the National Taxpayers Union Foundation and the Tax Foundation, both Tier-2 studies that explicitly build on OIRA/RegInfo.gov PRA data. Both are included and clearly labeled as Tier-2.

Inclusion / exclusion. Only figures with a named source, a stated tax year or fiscal year, and U.S. federal scope were included. Unverifiable or undated figures were excluded. The 2015 aggregate is included solely as a historical anchor and labeled as such, never as current.

Handling conflicting numbers. The two leading aggregate estimates (NTUF $477B, Tax Foundation $536.1B for TY2025) are reported side by side, never averaged, because they use different wage rates and form scopes. Where a single number was needed, the report gives the range.

Derived figures. The Compliance-to-Revenue Ratio, Burden Concentration Ratio, and Corporate-Tax-Equivalent framing are Ledgerism derivations; each shows its formula, inputs, and limitations above.

Data limitations. Out-of-pocket cost data is available for only a minority of IRS collections; the IRS records many unknown costs as zero, biasing dollar totals downward. Numerator and denominator periods differ by up to a year in the revenue-share calculation. Dollar time series are affected by wage inflation. Per-entity corporation figures are single-source averages.

Relationship to the Tax Code Complexity Index. The Ledgerism Tax Code Complexity Index measures the size and complexity of the tax law (word counts, instruction pages, an index). This report measures the cost of complying with it (hours, dollars, shares). The two share some NTUF and Tax Foundation source data but answer different questions and do not duplicate each other.

Last updated: 2026-07-02.

Source quality ranking

Tier 1 (primary / government).
– IRS, 2025 Instructions for Form 1040, “Estimated Average Taxpayer Burden for Individuals by Activity.”
– IRS, Fiscal Year 2024 Data Book (gross collections, share of federal funding).
– Office of Information and Regulatory Affairs (OIRA) burden data via RegInfo.gov (Paperwork Reduction Act information-collection estimates; the source layer under both aggregate studies).
– National Taxpayer Advocate, 2025 Annual Report to Congress (complexity and burden as most-serious problems).
– Congressional Research Service, Paperwork Reduction Act overview (Treasury/IRS share of federal burden).

Tier 2 (credible research building on primary data).
– National Taxpayers Union Foundation, annual tax-complexity studies (April 13, 2026; February 2, 2026; April 9, 2025; and earlier), which draw hours directly from OIRA/RegInfo.gov.
– Tax Foundation, “Tax Complexity Now Costs the US Economy over $536 Billion Annually,” August 27, 2025 (data from OIRA/RegInfo.gov accessed June 4, 2025).

Tier 3 (reputable journalism, for corroboration only).
– The Center Square reporting on the NTUF 2026 report.

Excluded. Any figure without a named source, tax year, or working URL; blog aggregations that did not cite primary data; the 2015 aggregate as a current figure (retained only as a labeled historical anchor).

Citation format (for major statistics)

• Total compliance hours/cost (TY2025): Source: National Taxpayers Union Foundation, "The Hidden Cost of the Tax Code," April 13, 2026 (burden hours from OIRA/RegInfo.gov).
• Compliance cost and GDP share (TY2025): Source: Tax Foundation, "Tax Complexity Now Costs the US Economy over $536 Billion Annually," August 27, 2025.
• Per-taxpayer time by activity: Source: Internal Revenue Service, 2025 Instructions for Form 1040, Estimated Average Taxpayer Burden for Individuals by Activity.
• Revenue collected: Source: Internal Revenue Service, Fiscal Year 2024 Data Book.
• Complexity/burden as a serious problem: Source: National Taxpayer Advocate, 2025 Annual Report to Congress, released January 28, 2026.

Journalist-friendly additions

Most quotable statistics

• Americans spent about 6.93 billion hours and more than $477 billion complying with federal taxes for the 2026 filing season, tax year 2025 (NTUF, April 13, 2026).
• The Tax Foundation puts the tax year 2025 cost even higher, at $536.1 billion, about 1.8 percent of GDP, more than the corporate income tax collects (Tax Foundation, August 27, 2025).
• The country spends roughly 9 to 11 cents in compliance cost for every dollar of federal tax the IRS collects (Ledgerism derivation from NTUF/Tax Foundation and IRS FY2024 Data Book).
• The single most burdensome form is Form 1099-B at about 2.18 billion hours, larger than the entire individual 1040 return family (Tax Foundation, August 27, 2025).
• A large corporation’s return takes about 610 hours and more than $69,000, roughly 76 times the hours of a typical wage earner’s return (NTUF, April 13, 2026).

Data limitations

Out-of-pocket cost data exists for only a minority of IRS collections; the IRS often records unknown costs as zero, understating totals. The two leading aggregate estimates differ by roughly 12 percent because of wage-rate and scope choices. Dollar time series are affected by wage inflation. The revenue-share ratio mixes a TY2025 cost with FY2024 collections. The IRS no longer publishes consolidated compliance-burden reports, so all totals are reconstructed from PRA line items.

Downloadable dataset, recommended fields

metric_name, category (aggregate/form/taxpayer_type/income_band/time_series), value, unit (hours/USD/percent), tax_year, fiscal_year, geography (US federal), source_organization, source_tier, methodology_note, source_url, retrieval_date

150-word press summary

Americans spent roughly 6.93 billion hours and more than $477 billion complying with the federal tax code for the 2026 filing season, according to the National Taxpayers Union Foundation, which builds its estimates on IRS paperwork-burden data cleared by the Office of Information and Regulatory Affairs. The Tax Foundation, using the same source data with higher wage assumptions, put the tax year 2025 cost at $536.1 billion, about 1.8 percent of GDP, more than the corporate income tax collects. Set against the record $5.1 trillion the IRS collected in fiscal year 2024, that is 9 to 11 cents of compliance cost per dollar of tax collected. The burden is highly unequal: a typical wage earner spends about 8 hours and $160, while a large corporation spends about 610 hours and more than $69,000. The single most burdensome form is not the 1040 but Form 1099-B, at 2.18 billion hours.

Five suggested headlines

1. Americans Spent 6.93 Billion Hours and $477 Billion Obeying the Tax Code in 2026
2. It Costs Up to 11 Cents to Comply for Every Dollar the IRS Collects
3. Tax Compliance Now Costs More Than the Entire Corporate Income Tax Raises
4. A Large Company’s Tax Return Takes 610 Hours. A Wage Earner’s Takes 8.
5. The Most Burdensome Tax Form Is Not the 1040, It Is the 1099-B

10 FAQs

1. What does tax compliance cost Americans each year? Between $477 billion (NTUF) and $536.1 billion (Tax Foundation) for tax year 2025.
2. How many hours do Americans spend on taxes? About 6.93 to 7.09 billion hours for tax year 2025.
3. How long does an average return take? About 12 hours and $290 out of pocket (NTUF, February 2, 2026).
4. How much does a simple return take? About 8 hours and $160 for a non-business 1040 filer (NTUF, April 13, 2026).
5. What is the most burdensome form? Form 1099-B, at about 2.18 billion hours (Tax Foundation, August 27, 2025).
6. How much does compliance cost businesses? U.S. business income tax returns cost about $126.3 billion and 935 million hours in TY2025 (Tax Foundation).
7. What share of GDP is this? About 1.8 percent of GDP in 2025 (Tax Foundation).
8. How does it compare to tax revenue? Roughly 9 to 11 cents per dollar of the $5.1 trillion the IRS collected in FY2024 (Ledgerism derivation).
9. Where do the numbers come from? IRS Paperwork Reduction Act burden estimates cleared by OIRA and posted on RegInfo.gov.
10. Is the burden rising or falling? Falling for two years from a 2023 peak near 7.93 billion hours, though new credits add complexity back (NTUF, April 13, 2026).

Sources

1. National Taxpayers Union Foundation, “The Hidden Cost of the Tax Code: 6.93 Billion Hours and More Than $477 Billion in Total Compliance Burdens,” April 13, 2026. https://www.ntu.org/foundation/detail/the-hidden-cost-of-the-tax-code-693-billion-hours-and-more-than-477-billion-in-total-compliance-burdens
2. National Taxpayers Union Foundation, “Individual Income Tax Compliance Burdens Ease for the New Filing Season,” February 2, 2026. https://www.ntu.org/foundation/detail/individual-income-tax-compliance-burdens-ease-for-the-new-filing-season
3. National Taxpayers Union Foundation, “Average American Spends 13 Hours and $290 to File Taxes” (TY2024, $464 billion), April 9, 2025. https://www.ntu.org/foundation/detail/taxpayers-will-spend-71-billion-hours-464-billion-on-tax-compliance-in-2025
4. Tax Foundation, “Tax Complexity Now Costs the US Economy over $536 Billion Annually,” August 27, 2025 (updated October 9, 2025). https://taxfoundation.org/data/all/federal/irs-compliance-complexity-tax-costs/
5. Internal Revenue Service, 2025 Instructions for Form 1040 (Estimated Average Taxpayer Burden for Individuals by Activity), catalog number 24811V. https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
6. Internal Revenue Service, Fiscal Year 2024 Data Book. https://www.irs.gov/pub/irs-pdf/p55b.pdf
7. National Taxpayer Advocate, 2025 Annual Report to Congress (released January 28, 2026). https://www.taxpayeradvocate.irs.gov/reports/2025-annual-report-to-congress/full-report/
8. Congressional Research Service, “Burden and the Paperwork Reduction Act: An Overview,” IF12673. https://www.congress.gov/crs-product/IF12673
9. Office of Information and Regulatory Affairs / RegInfo.gov, Paperwork Reduction Act information-collection burden data. https://www.reginfo.gov/
10. Internal Revenue Service, “Taxpayer Compliance Burden,” Publication 5743. https://www.irs.gov/pub/irs-pdf/p5743.pdf
11. National Taxpayers Union Foundation, “Study: $233.8 billion, 6.1 Billion Hours Lost to Rising Tax Complexity” (2015 historical anchor), April 8, 2015. https://www.ntu.org/foundation/detail/study-2338-billion-61-billion-hours-lost-to-rising-tax-complexity
12. The Center Square, “Report: Taxpayers to spend $477 billion on tax season” (corroboration), April 2026. https://www.thecentersquare.com/national/article_27a78f27-ea2a-4adc-809a-aa77befdb3ff.html

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• Income Tax Brackets & Rates Report — 2026 brackets, effective rates, and shares.
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• The EITC Report — 24M families, ~$70B, and the improper-payment rate.
• The Evolution of Form 1040 — 1913 to 2026: a visual history of the 1040.