Tax News

CORPORATE RETURNS SLIDE

Washington, D.C. - The number of corporate returns processed annually by the Internal Revenue Service fell 7 percent between January 2005 and December 2009, from almost 2.2 million to approximately 2 million, according to a report by the Treasury Inspector General for Tax Administration that analyzed IRS data for fiscal years 2005 through 2009.

One factor that may be contributing to the modest decline in corporate return filings is the popularity of organizing a business as a partnership or Subchapter S corporation. According to the IRS, the number of partnerships is expected to increase by 49 percent and the number of Subchapter S corporation filings is expected to increase by 39 percent between 2006 and 2015.

REPORT QUESTIONS IRS ON STIMULUS FUNDS

Washington, D.C. - Some $203 million in funding under last year's Recovery Act for the IRS to reprogram its computer systems and update tax forms, publications and customer service may be at risk due to inadequate oversight, according to another TIGTA report.

As of April 2010, the IRS had initiated or was in the process of initiating 26 procurement actions on Recovery Act program initiatives with a total contract value of $81.9 million. But despite the influx of Recovery Act money, the IRS has not completed steps to improve contract oversight by its contracting officers' technical representatives, who administer the technical aspects of government contracts following their award, according to the report.

In a 2009 audit, TIGTA found that IRS contracting officers' technical representatives were not always performing all of their oversight duties. Instead, they limited their involvement to administrative functions and relied on program office employees who lacked delegated authority and training required to determine whether the goods or services provided by the contractor were acceptable.

In addition, COTRs were not requesting and retaining sufficient receipts to verify contractors' invoiced charges.

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