Compliance cost
A compliance cost is expenditure of time or money in conforming with government requirements such as legislation or regulation. For example, people or organizations that do business have the extra burden of having to keep detailed records of all input tax and output tax to facilitate the completion of tax returns. This may necessitate them having to employ someone skilled in this field, which would be regarded a compliance cost.
Definition:
Compliance costs are defined as the amount of money and time required to meet government instituted legislations or regulations.
Compliance Costs & Tax Complexity
The full cost a tax system is more than the amount of tax paid. It also includes the cost of tax planning and paperwork. Economists call these "tax compliance" costs, and the IRS estimates Americans spend 6.6 billion hours per year filling out tax forms—including 1.6 billion hours on the 1040 form alone. In 2002 Americans spent roughly $194 billion dollars on tax compliance. That amounts to 20 cents of compliance cost for every dollar collected by the tax system.
Compliance Costs Grow Faster Than Net Income Compliance costs are eating up more and more of a firms' net income, growing from 2.83 percent of net income in 2002 to 3.69 percent in 2006.
Much has been said about the rising cost of compliance, and new research reveals that the concern is merited.
One of the primary reasons for the increase in costs is that institutions are responding to regulation by applying human resources to monitor compliance
http://www.youtube.com/watch?v=XX8EswfGKQw
if you look at just one agency, the IRS, and one small area of our compliance costs. the tax code... it is as huge cost.. a hidden TAX on productivity
338 billion dollar hidden TAX
a loss of 7.6 billion hours of productivity..
4 million employees not working on productivity, but on IRS compliance..
it cost $1000 per US resident,
and that is the tip of the iceberg... can we afford our federal government?