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Processes Are Needed to Identify Small Businesses Erroneously Claiming the Research Tax Credit Payroll Tax Offset

Report Information

Date Issued
Report Number
2019-40-014
Report Type
Audit
Joint Report
Yes
Participating OIG
Treasury Inspector General for Tax Administration
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$0
View Report

Recommendations

The Commissioner, Small Business/Self-Employed Division, should review the 81 businesses TIGTA identified that did not meet the eligibility requirements for claiming the Research Credit and recover any erroneously claimed Research Credits.

The Commissioner, Small Business/Self-Employed Division, should Review the **2** businesses we identified that ********2********* ****2**** and recover any erroneously claimed Research Credits.

The Commissioner, Small Business/Self-Employed Division, should ensure timely implementation and use of post-processing initiatives to identify businesses that do not meet eligibility or threshold requirements and erroneously claim the Research Credit.

The Commissioner, Wage and Investment Division, should ensure that the tax accounts have been adjusted for the 50 businesses that claimed the Research Credit on a return prior to when the credit became available.

The Commissioner, Wage and Investment Division, should ensure that procedures are implemented to identify any future electronically filed returns that improperly claim the credit prior to when it became available.