Simplicity Lost

40 Pages Posted: 8 Sep 2022 Last revised: 24 Apr 2023

See all articles by Joshua D. Blank

Joshua D. Blank

University of California, Irvine School of Law

Leigh Osofsky

University of North Carolina (UNC) at Chapel Hill

Date Written: August 26, 2022


The complexity of the tax law is one of the most serious problems facing U.S. taxpayers and the tax system. Among the many costs of tax complexity are (1) billions of hours of paperwork and stress that taxpayers face each year, (2) monetary costs that taxpayers bear when they hire advisors and purchase software to report their tax liability and file their tax returns, (3) difficulty that taxpayers encounter when attempting to claim tax credits and other benefits, and (4) challenges the IRS confronts when attempting to deter tax avoidance and evasion opportunities that tax complexity often creates.

This Article explores an often-overlooked moment in time in which Congress seemed to embrace an alternative—tax simplification—as a real possibility, as part of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98). While RRA 98 has often been described as instituting “fundamental change” in tax administration, primarily as a result of its introduction of taxpayer protections, its tax complexity provisions have received considerably less attention. Yet, RRA 98 committed to address tax complexity in a number of ways. First, RRA 98 provides that “front-line technical experts” at the IRS should participate in the tax legislative process so that tax administration informs legislation. Second, the statute requires the IRS to issue an annual report to Congress that describes “the sources of complexity in administration of the Federal tax laws.” Third, RRA 98 requires the Joint Committee on Taxation to provide to the reporting congressional committee a “tax complexity analysis” for any proposed tax legislation with widespread applicability.

In this Article, written for a symposium on the 25th anniversary of RRA 98, we review the fate of the tax complexity provisions of the legislation. Our analysis shows that the IRS and JCT initially complied with the mandate to provide Congress with general reports on the sources of complexity in the federal tax system. Indeed, the IRS and JCT even exerted significant and meaningful effort in doing so. However, we find that, since the early 2000s, the IRS, JCT and Congress have not fulfilled their statutory obligations regarding the tax complexity provisions of RRA 1998. We show that, in contrast to Congress’s expressed sense in RRA 98 of how best to conduct the tax legislative process, representatives of the IRS have not participated meaningfully in the drafting and evaluation of proposed tax legislation. We further demonstrate that the IRS has failed to deliver annual tax complexity reports to Congress, as required by RRA 98. Last, we show that, although JCT has delivered tax complexity analysis regarding proposed tax legislation to Congress, these analyses have contained vague and misleading statements regarding the effect of proposed tax law and have appeared too late in the legislative process to have a significant impact on the legislation.

After exploring the outcomes of the tax complexity provisions of RRA 98, we suggest several reforms that Congress could adopt to strengthen these provisions and to address tax complexity more generally. First, we argue that Congress should recommit to the goal of tax simplification, including by taking seriously its own responsibility in reducing tax complexity, funding study of tax complexity, and responding to the analysis provided. There are also particular reforms that Congress, the IRS, and JCT can adopt to improve the efficacy of the work designed to reduce tax complexity. The reforms include changes to the content and delivery of the annual tax complexity reports by the IRS to Congress, integration of the IRS in the legislative process, examination of deviations between the descriptions of the tax law that the IRS offers to taxpayers and the underlying tax law, and changes to the way in which Congress drafts tax statutes, such as through the formalization of drafting of statutory language.

Keywords: Internal Revenue Service, Tax Simplification, Tax Law, Tax Complexity, Tax Compliance, Tax Compliance Burden, Internal Revenue Service Restructuring and Reform Act of 1998

JEL Classification: H20, H23, H24, H25, H26, H29, K34

Suggested Citation

Blank, Joshua D. and Osofsky, Leigh, Simplicity Lost (August 26, 2022). Pittsburgh Tax Review, 2023, UC Irvine School of Law Research Paper No. 2022-29, UNC Legal Studies Research Paper No. 4201658, Available at SSRN:

Joshua D. Blank (Contact Author)

University of California, Irvine School of Law ( email )

401 E. Peltason Dr.
Ste. 1000
Irvine, CA 92697-1000
United States


Leigh Osofsky

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

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