Complying With Tax Code Is Costly

This is a rush transcript from "Hannity," April 16, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: All right. Americans know all too well that deciphering the U.S. tax code can be an excruciating process. And a new online video exposes that complying with the code can also be very costly for you and your family. Let's take a look.

(BEGIN VIDEO CLIP)

HIWA ALAGHEBANDIAN: Just complying with the tax code will cost us $338 billion this year. The reason for this punitive compliance cost is that politicians keep making the tax system more complicated.

The chart you see on the screen shows that the number of words of tax law and regulation — and this is just for the income tax — has jumped from 718 in 1955 to more than 7 million in 2005. And who knows how high it is now?

Dealing with that thicket of complexity is very time-consuming. The IRS estimates that we spend 7.6 billion hours each year dealing with the tax system. That's the equivalent of nearly four million fulltime workers.

I'm afraid to even speculate what that number is going to be, now that Obama has put the IRS in charge of enforcing a government-run health care system.

(END VIDEO CLIP)

HANNITY: And joining me now to talk about her research is the student from the College of William and Mary who narrated that video, Hiwa Alaghebandian.

Hiwa, welcome to the program. Thanks for being with us.

ALAGHEBANDIAN: Thank you for having me.

HANNITY: You've got to break this down. Because obviously, people have just been through this. But when you break it down into those numbers, it's spectacularly shocking and confusing. Explain what you found in your research.

ALAGHEBANDIAN: It's honestly terrifying. I saw that you were talking about high tax rates earlier in your program, and that's obviously a big issue. But this is just terrifying, the waste of resources that we have.

I mean, $338 billion is what the Tax Foundation estimates that just complying with the tax code cost us this year. This means the amount of money that people pay for accountants, their tax preparers, just to file their taxes.

The IRS estimates that it costs us about — it took us about 7.6 billion hours this year. And most of this cost is actually borne by the small businesses and the poor individuals.

HANNITY: Now, I think one of the most amazing things we find out every April 15 is that you put a group of accountants together. You give them the same information. And none of them ever come up with the exact same return.

So how could the IRS expect that the American people can get it right when the best accountants can't get it right?

ALAGHEBANDIAN: That's very true. Money magazine actually used to do an annual survey where they would put together a hypothetical family and send them out to see these different tax preparers. And they would often get not even a single correct answer.

It's awful that even IRS agents can't give us the right answer, yet we're held liable.

HANNITY: It's kind of even more interesting that we have a tax cheat as the head of the IRS, but that's a different story.

All right. Last question. Do you do your own taxes?

ALAGHEBANDIAN: I actually don't currently have a job.

HANNITY: Is that why you — is that why you did the video?

ALAGHEBANDIAN: No, no. I did the video because I grew up in Germany, and I've seen what big government can do. And I'm very concerned about the direction in which we're heading.

HANNITY: All right. Good luck in your job search. It might have something to do with government somewhere down the line, or professor. And we wish you the best of luck.

— Watch "Hannity" weeknights at 9 p.m. ET!

Content and Programming Copyright 2010 Fox News Network, Inc. Copyright 2010 Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.