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Andrew McWilliam, Ph.D.
Economist, U.S. Food and Drug Administration
5600 Fishers Lane, Rockville, MD
November 20, 2005
The new estimates are based upon 1999 Mathematica Policy Research
survey estimates updated to reflect changes in both the number of filers
of different forms and in the forms themselves. The method by which the
estimates are derived is very detailed and, given the available
information, seems appropriate.
The burden estimates are based on surveys of service providers
conducted prior to 1999, and are older than would be ideal. It would be
easy to imagine a trend in underlying tax preparer costs which would
cause estimates from 1999 to differ from results a similar survey of tax
preparer costs might show today, though adjustments in the rate at which
dollars are converted to hours should, to some extent, control for
changes when the estimated burden is measured in hours. Given that more
recent survey data is not available, I do not know of any empirical
trend which would bias the older estimates.
While changes in the underlying costs of filling out forms may affect
whether the estimated burden, in aggregate, is too high or too low in
absolute terms, the latest form changes should reduce the burden
relative to the previous forms, and I think it is unlikely that updated
survey estimates would affect this result.
The changes in burden estimates result from the elimination of some
forms, and the availability of new forms for some filers. New forms are,
on average, less burdensome, so that when the model adds up the number
of each kind of filer and the burden they will now spend, the aggregate
burden is less. The methodology seems sound.
The aggregate burden, measured in either hours or dollars, seems
plausible, and I have no basis for thinking it is too high or too low.
If I had to arbitrarily put confidence intervals around the aggregate
estimates, they would be wide: an actual burden 50% higher or lower
would not surprise me at all.
The model also estimates that the proposed forms will reduce the
burden relative to the old forms. Based on my review of the materials
provided, I believe this result is sound.
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