IRS reportedly could have mistakenly paid $ 57 million for Trump's tax break
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"Possibly Bad" QBI prints
According to a report released Tuesday by the Inspector General of Financial Management, the IRS allowed business owners to claim "potentially erroneous" deductions of $ 57 million on 12,980 tax returns filed last year.
The watchdog asked the tax authorities to tighten control over the pass-through deduction.
This is a rich streak for the IRS to prospect because the IRS has been getting pay dirty [almost] every time.
Senior Fellow at the Urban-Brookings Tax Policy Center
It's not entirely clear why the Treasury Inspector General reported these tax returns to the IRS. The report, which analyzed tax returns for 2019 filed as of April 16 last year, worked out many details.
The analysis also shows the high level of error in tax returns that claim a pass-through deduction, said Steven Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center.
For example, when the IRS selected 68 tax returns for the 2018 tax year for additional scrutiny, the agency ultimately denied 85% of them a pass-through deduction worth approximately $ 4.8 million, the report said.
"This is a rich vein for the IRS to prospect because the IRS has been getting pay dirty [almost] every time," said Rosenthal.
"I think QBI is written in a very complex way, with exceptions to the exceptions," he said of the trigger and why errors can occur.
The IRS and the Inspector General of the Treasury have been contacted but did not respond to a request for comment at the time this story was published.