Thousands of Multimillion-Dollar Tax Refunds Not Being Reviewed

IRS rules and inconsistent procedures are preventing the review of thousands of tax returns with multimillion-dollar refund claims, possibly costing the government hundreds of millions in revenue, a government watchdog said.

Generally the IRS must allow the Joint Committee on Taxation to review refunds of income, estate, gift, and certain excise taxes in excess of $2 million—$5 million for C corporations—before it issues the money. But thousands of refunds bypass this check, which is required under tax code Section 6405, the Treasury Inspector General for Tax Administration said in a report released Monday.

IRS regulations and practices limit the ...