Simply complying with the present frustrating and complex federal tax code is costing the U.S. economy billions of dollars -- funds which might otherwise go to economic expansion, according to economists.

• It has been estimated that filling out all those forms last year cost at least $140 billion -- about one-sixth the revenue that Washington got from the taxes.

• Experts predict a flat tax would cut pre-filing compliance costs 94 percent.

• Small businesses have to pay nearly 380 percent of their taxes in compliance costs -- versus only 3 percent for large, Fortune 500-type firms.

Part of the problem with the present system is the constant changing of the tax code. Congress has passed a major new tax law on average every 1.3 years since enacting the 1954 Internal Revenue Act.

These constant changes mean hiring more IRS employees.

• From 1985 to 1995, the number of IRS employees rose from 96,705 full-timers to 109,656.

• From fiscal 1960 to 1993, IRS' costs for collecting $100 in taxes increased from 40 cents to 60 cents -- falling back to 58 cents in 1994.

• The percentage of filers using tax preparation services has climbed from just under 47 percent in 1985 to 49.6 percent in 1993.

Taxpayers who call on the IRS for information don't always get accurate advice. In 1989, the error rate was 37 percent. This figure has improved to 10 percent in 1994 -- but still bad news for one in ten taxpayers.

Source: Daniel J. Murphy, "Your 1040 Form on a Postcard?" Investor's Business Daily, March 7, 1996.