(Bloomberg News) Taxpayers and accountants rushing to meet tomorrow's tax-filing deadline are struggling to adjust to a new law requiring brokers to report to the Internal Revenue Service what their clients paid for stocks.

The so-called cost basis reporting requirement, which in this tax-filing season applies only to stocks bought and sold in 2011, comes with new forms and tricky calculations causing some taxpayers to file for extensions so they can get the math right. Congress required brokers to report the basis so that taxpayers don't underreport their gains or overreport their losses.

"It's a pain in the neck," said Alan Straus, a certified public accountant in New York. "It just adds a tremendous amount of pages to the tax return."

Cost basis reporting will become more complicated for taxpayers and accountants for at least two years as additional types of assets fall under the rules. The requirement will cover mutual funds and most exchange-traded funds starting in 2012 and fixed-income instruments and options beginning in 2013.

Brokers, accountants and taxpayers are still getting used to the rules, which will eventually simplify and standardize basis reporting, said Stevie Conlon, senior director and tax counsel at Wolters Kluwer Financial Services. The firm provides software to brokers that calculates cost basis.

"Over the long run, it will get easier," she said. "Over the short run, it will probably feel harder."

Congress created the cost basis requirement in 2008 in the same law that authorized the Troubled Asset Relief Program. The requirement is part of the government's effort to reduce the estimated $385 billion annual net gap between taxes owed and taxes paid.

$6.7 Billion

When enacted, the provision was estimated to raise $6.7 billion over a decade, according to the Joint Committee on Taxation.

Before the rule, the IRS required information only about gross proceeds from sales of securities, which led to errors and fraud. Taxpayers had to calculate their cost basis and net proceeds, sometimes using information from their brokers. With the new format, the IRS will be able to detect whether taxpayers are overstating losses or underreporting gains because it will match brokers' reports on cost basis with taxpayers' returns.