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AICPA issues new simplification tool for tax lawmakers.

On Tax Simplification Day--April 16, 1993-the American Institute of CPAs issued its tax complexity index, a questionnaire enabling legislators to measure the degree of complexity in any tax proposal under consideration.

The index includes 15 objective and 5 subjective questions. Lawmakers answer the multiple-choice objective questions by assigning a point value ranging from +3 (which corresponds to a substantial increase in complexity) to -3 (which corresponds to a substantial simplification). For example, the possible responses to a question on the nature of a proposed legislative provision range from introducing an entirely new provision (+3) to repealing a complex provision (-3). The subjective part of the index includes questions on whether the objectives of the legislation can be achieved in a simpler manner and whether the benefits outweigh the compliance and administration costs.

The AICPA believes the questionnaire is essential to finding simpler tax solutions that meet economic and social policy goals while recognizing the realities of complex business transactions. "The index will demonstrate whether this is being done, and it also can be used by state legislators in drafting changes to their own tax laws," said Harvey L. Coustan, chairman of the AICPA tax executive committee. He added, "If the concepts embodied in the index are consistently followed, the American people can look forward to far fewer headaches during January through April in the years ahead."
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Publication:Journal of Accountancy
Article Type:Brief Article
Date:Jun 1, 1993
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