The author’s report in this article on their study in questionnaire format that tested the perception of 89 small-business tax practitioners regarding the com- plexity of 37 tax provisions. They found overwhelming consistency on the five most complex and five least complex small-business tax provisions with partner- ships, estate and gift valuations, tax-deferred ex- changes, frequency of law changes, and retirement plans topping the hit parade. Progressive tax rates, estimated taxes, Social Security/self-employment taxes, corporate capital gain provisions, and cash ver- sus accrual method were uniformly and consistently perceived as the least complex. These results have tax policy implications. According to the authors, for ex- ample, a House bill to move S corporations to a part- nership regime may not be optimal from the simplifi- cation perspective. The authors question whether familiarity with an issue results in lower perception of complexity. There is some discussion in the tax policy literature about tiering (different tax rules for small versus large companies). That policy seems to have made certain tax areas (cash versus accrual, deprecia- tion, installment sales, and possibly corporate alterna- tive minimum tax and uniform capitalization (UNI- CAP) less complex for small-business practitioners.
Laura R. Ingraham and S. S. Karlinsky. "Tax Professionals' Perceptions of Small Business Tax Law Complexity" Tax Notes (2005): 79-89.