Millions of Dollars in Potentially Erroneous Qualified Business Income Deductions Are Not Being Verified

The Deputy Commissioner for Services and Enforcement should: Update internal guidelines to require tax examiners to review ***2*** ****2**** tax returns identified ******************************2*******************************, and for those claims that involve ***********2***********, develop and send a soft notice to these taxpayers.

The Deputy Commissioner for Services and Enforcement should: Revise Forms 8995 and 8995-A to include a cautionary statement reminding taxpayers of the **************2************** to claim the QBI Deduction.

The Deputy Commissioner for Services and Enforcement should: Identify the *************2************* that **************2************** ***2*** and revise the Form 1040 filing instructions to ***********2*********** in support of qualified business income deduction claims.

The Deputy Commissioner for Services and Enforcement should develop processes to ensure that tax examiners are sending correspondence to taxpayers prior to disallowing the QBI Deduction and moving misplaced entries to correct lines, as required.

The Deputy Commissioner for Services and Enforcement should ensure that the remaining 4,234 tax returns identified for which the QBI Deduction may have been erroneously disallowed are reviewed, and when applicable, correspond with taxpayers to request Form 8995 or 8995-A to support their deduction.