[Congressional Record Volume 148, Number 51 (Tuesday, April 30, 2002)]
[Senate]
[Pages S3571-S3572]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      by Mr. HUTCHINSON (for himself, Mr. Craig, Mr. Enzi, Mr. Gregg, 
        Mr. Hagel, Mr. Inhofe, and Mr. Smith of New Hampshire):
  S. 2429. A bill to amend the Internal Revenue Code of 1986 to allow 
an above-the-line deduction from certain expenses in connection with 
the determination, collection, or refund of any tax; to the Committee 
on Finance.
  Mr. HUTCHINSON. Mr. President, I rise today to introduce legislation 
that will help ease the financial burden for the millions of Americans 
that find themselves extremely confused and frustrated every year as 
they try to prepare their tax returns. This year's tax filing deadline 
expired on April 15 for most American taxpayers, and the 17,000-page, 
2.8 million-word tax code was more complex than ever. One estimate is 
that it now takes 28 hours and six minutes to tackle the Internal 
Revenue Service's 1040 form and do the necessary record keeping.
  According to the Tax Foundation, it is estimated that in 2002, 
individuals and small businesses will spend approximately 5.8 billion 
hours complying with the Federal income tax code, with an estimated 
compliance cost of over $194 billion. This amounts to imposing a more 
than 20 cent tax compliance surcharge for every dollar the tax system 
collects. By 2007, the compliance surcharge is conservatively estimated 
at $244.3 billion. Under current law, there is a way for those 
taxpayers who itemize and accumulate tax preparation fees up to at 
least 2 percent of their Adjusted Gross Income to receive a financial 
break from the IRS to help offset the cost of having a tax preparer 
calculate their tax. The problem is that there are millions more low- 
or middle-income individuals and small business owners trying to 
decipher the same complicated instructions and forms, for which there 
is no tax break.
  Since 1985, we have more than doubled the pages in the instruction 
booklet that accompanies the 1040. In response to this increased 
complexity, American taxpayers are seeking professional help at a 
record level that equals almost 60 percent of all returns filed. I 
believe it is time that we acknowledge how difficult our current tax 
system has become and help the millions of Americans who have to look 
to outside help in filing their yearly tax returns. I suggest that 
since the Federal Government is the party responsible for creating this 
overly complicated code, it is the Federal Government that should bear 
the burden of the costs that are incurred in its compliance.
  My proposal is simple, my legislation provides for the expenses that 
are incurred by a taxpayer in having their return prepared to be fully 
deducted. This would be treated as an above-the-line deduction and 
would allow for anyone who pays for these services to deduct up to $500 
of these costs. Further, for those who already qualify to have their 
preparation cost be deducted because they reach the 2 percent 
threshold, they can opt not to have this deduction apply and continue 
to have their tax preparation fees be deducted under the current 
guidelines.
  I believe the legislation that I have introduced today will provide 
much needed relief to the millions of American taxpayers that are 
forced to comply with this complex code. I ask my colleagues for their 
support.
  I ask unanimous consent that the text of the legislation be printed 
in the Record.

[[Page S3572]]

  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2429

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. ABOVE-THE-LINE DEDUCTION FOR CERTAIN EXPENSES IN 
                   CONNECTION WITH THE DETERMINATION, COLLECTION, 
                   OR REFUND OF ANY TAX.

       (a) Deduction Allowed Whether or Not Taxpayer Itemizes 
     Other Deductions.--Section 62(a) of the Internal Revenue Code 
     of 1986 (defining adjusted gross income) is amended by 
     inserting after paragraph (18) the following new paragraph:
       ``(19) Certain tax expenses.--Unless the taxpayer elects to 
     not have this paragraph apply, the deduction allowed by 
     paragraph (3) of section 212 with respect to so much of the 
     expenses described in such paragraph as does not exceed 
     $500.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenses paid or incurred in taxable years 
     beginning after the date of the enactment of this Act.
                                 ______