Could S Corp Owners Be A Tax Target?

A report released Thursday by Congress’ Government Accountability Office shows why owners of the nation’s four million S corporations might be a tempting target for politicians hunting for more revenue.

The report features new estimates of S corp finagling–estimates based on special in-depth “National Research Program” audits the Internal Revenue Service conducted on 2003 and 2004 S corp tax returns. Over those two years, the GAO estimates, 68% of S corps misreported their net income, understating their combined net profits by $85 billion.

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