Available Data Are Not Being Used to Proactively Identify Potentially Erroneous Rehabilitation Credit Claims

The Commissioners, Large Business and International and Small Business/Self-Employed Divisions should verify whether the 12 taxpayers and three pass-through entities that included an invalid entry on Form 3468 Line 11k are entitled to claim the expenditures or credits.

The Commissioners, Large Business and International and Small Business/Self-Employed Divisions should verify whether the 11 taxpayers who claimed potentially erroneous Rehabilitation Credits from a pass-through entity were entitled to claim the credits. This should include incorporating this issue into the open examinations for the four entities with an open examination indicator.

The Deputy Commissioner for Services and Enforcement should work with the Department of the Treasury's Office of Tax Policy to propose changes to existing regulations and provide clear reporting requirements for claiming the Rehabilitation Credit.