TIGTA: 53% Error Rate in Returns Reporting Rental Real Estate Activities

The Treasury Inspector General for Tax Administration yesterday released Actions Are Needed in the Identification, Selection, and Examination of Individual Tax Returns With Rental Real Estate Activity (2011-30-005):

The IRS should increase its examinations of individual tax returns that report losses from rental real estate activity, according to a new audit report released publicly today by TIGTA. ... [A] GAO report in August 2008 stated that at least 53% of individual taxpayers with rental real estate activity for Tax Year 2001 misreported their rental real estate activity, resulting in an estimated $12.4 billion of net misreported income. [Tax Gap: Actions That Could Improve Rental Real Estate Reporting Compliance (GAO-08-956)]

• Accounting Today, IRS to Examine Rental Losses More Closely