Processes Do Not Ensure That Taxpayers Filing an Incorrect Form 1120 Series Tax Return Are Appropriately *****2*****

The Commissioner, Small Business/Self-Employed Division, should review the 48,044 incorrectly filed Forms 1120-S and the 6,897 Forms 1120 returns TIGTA identified and refer those with potential tax adjustments to the Examination function to be addressed using its deficiency procedures.

The Commissioner, Small Business/Self-Employed Division, should develop processes and procedures to refer incorrectly filed Forms 1120-S or 1120 tax returns with tax implications and where the taxpayer does not timely respond to the Examination function to be addressed using deficiency procedures.

The Commissioner, Small Business/Self-Employed Division, should in In coordination with the Department of Treasury’s Office of Tax Policy, develop a legislative change request to grant the IRS the ***********2************* ****2**** taxpayers that do not respond to the IRS’s correspondence regarding incorrect Forms 1120 or 1120-S.

The Commissioner, Wage and Investment Division, should remove the Form 1120-S filing requirement from the 1,588 accounts TIGTA identified.

The Commissioner, Wage and Investment Division, should develop processes and procedures to ensure that all taxpayers that submit an unprocessable Form 1120 or 1120-S that becomes unpostable because of an incorrect filing requirement receive Letter 3853C, as required.