EXECUTIVE SUMMARY
• Department of the Treasury briefed House of Representatives lawmakers on the schedule for rolling out tax provisions of the One, Big, Beautiful Bill (OBBB).
• Internal Revenue Service (IRS) paperwork data show that core returns and schedules tied to these provisions require 3.5 billion hours and over $139 billion annually in compliance costs.
• Compliance costs equal about 3 percent of total IRS tax collections in Fiscal Year (FY) 2024; lawmakers must weigh whether that ratio is an acceptable trade-off for OBBB’s intended benefits given the burden on households and businesses.

INTRODUCTION
Treasury officials recently outlined their implementation plan for the One Big Beautiful Bill (OBBB) in a briefing with House Republicans. The plan covers adjustments to business taxation, expanded deductions, and the phase-down of selected energy credits. Supporters emphasize the permanence of tax relief and the simplification of policy goals, while critics caution that execution may remain complex and could reduce incentives in certain sectors.

The administrative burden associated with these provisions is substantial. IRS paperwork data show that compliance demands tied to OBBB-related forms and schedules reach into the billions of hours each year. Individual returns, business returns, and depreciation filings dominate the workload, while energy-credit forms add complexity even as credits expire.

The tension is clear, OBBB promises policy clarity, but taxpayers continue to shoulder heavy reporting requirements. Compliance costs measured in both time and money illustrate how implementation choices determine the law’s practical impact.

RESULTS AND OBSERVATIONS
Business filings remain among the most time-intensive obligations under the tax code, and OBBB does little to change that dynamic. The IRS estimates that business income tax returns (Form 1120 series) account for 935 million hours of compliance time at an annual cost of $71.6 billion. Depreciation and amortization schedules (Form 4562) add another 448 million hours and about $18.3 billion in estimated costs. Together, these figures illustrate that even when OBBB consolidates or modifies provisions, the mechanics of interest-deduction limits and depreciation rules continue to impose a significant paperwork burden. Supporters may contend that such complexity is necessary to protect revenue and ensure accuracy, but critics argue it undermines OBBB’s stated goal of simplification.

Clean-energy incentives tell a similar story. OBBB phases out several credits, including the clean-vehicle credit in 2025 and certain renewable energy credits by 2027, but transitional rules extend filing obligations. Taxpayers must still report carryforwards, recapture, and eligibility requirements, which sustain compliance costs beyond the formal expiration of the credits. The Clean Vehicle Credit (Form 8936) requires 608,000 hours of taxpayer time at an estimated $24.9 million annually, while the Investment Credit (Form 3468) adds 75,000 hours at roughly $3.1 million. Proponents of these phase-outs argue that they align fiscal policy with reduced spending commitments, while critics point to the lingering administrative costs that persist long after the incentives have been narrowed.

The changes to the state and local tax (SALT) deduction also highlight this tension. OBBB temporarily raises the SALT cap from $10,000 to $40,000 in 2025 before returning it to $10,000 in 2029. This increase makes itemization more attractive for higher-income taxpayers, driving more households to file Schedule A. The IRS estimates that individual income tax returns (Form 1040) already account for 2.1 billion hours and nearly $49 billion in compliance costs annually. The expansion of itemization is therefore likely to sustain high levels of paperwork, even as earlier reforms sought to simplify the filing process. Supporters emphasize that this provision provides meaningful tax relief for residents of high-tax states, while critics caution that the underlying complexity of the 1040 remains intact.

COMPLIANCE COSTS IN CONTEXT
Aggregating across these forms, compliance burdens total roughly $139 billion annually. By comparison, IRS Data Book recorded $5.1 trillion in gross tax collections for FY 2024. That ratio implies about 3 cents of compliance cost for every $1 of tax collected.

Supporters of OBBB may argue this shows relative efficiency given the size of the tax system. Critics may counter that, even if proportionally small, the absolute scale, 3.5 billion hours and over $139 billion, reflects a significant drag on households and businesses.

METHODOLOGY
Estimates are drawn from IRS Information Collection Requirements (ICRs) on RegInfo.gov as of September 2025. Where IRS reports a cost burden, that figure is used. Where IRS reports hours but no cost burden, the hours are multiplied by the Bureau of Labor Statistics’ 2024 median hourly wage for compliance officers ($40.86). IRS gross collection figures are taken from the IRS Data Book, FY 2024.

CONCLUSION
Treasury’s implementation of OBBB proceeds as taxpayers continue to devote 3.5 billion hours and over $139 billion annually to compliance. Business returns, depreciation schedules, and transitional energy-credit filings sustain burdens even as provisions shift. The higher SALT deduction cap encourages itemization, keeping individual returns complex.

Placed in context, compliance burdens equal roughly 3 percent of total federal tax collections in FY 2024. Whether that figure reflects an efficient system or an excessive drag depends on perspective. Supporters see a manageable cost relative to trillions in revenue, while critics focus on the recurring dollar and hour demands borne by taxpayers. Policymakers must decide whether the benefits of OBBB justify those costs or whether additional reforms are warranted to reduce compliance pressures.