Watchdog Urges IRS To Focus on Tax Returns With Big Losses (2)

The IRS rejected a recommendation to conduct research to determine if more examination resources should be committed to reviews of individual tax returns showing large losses but no income, after its watchdog said such returns posed a significant compliance risk.

The Treasury Inspector General for Tax Administration, in a report made public Wednesday, said it had analyzed 1,142 individual returns for the tax years 2013 through 2017 that contained either a single or combined business loss of at least $100,000. Audits of those returns resulted in an average tax assessment of $53,183, TIGTA found.

The ...