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Division-wide Project
Post-Filing Tax Adjustments
September 6 2019
STATISTICS OF INCOME
Derrick Dennis Jen Ferris Chloe Gagin Tuba Ozer-Gurbuz Julia Shiller and Chris Williams
Project Motivation
bull The Statistics of Income (SOI) produces various products utilizing originally filed Forms 1040 and 1120 along with additional forms and schedules
bull Brief Overview of Processing Taxpayersrsquo Data bull Taxpayers submit their tax returns to the IRS
bull The IRS transcribes and edits taxpayersrsquo information
bull SOI receives the edited IRS data and further transcribes and edits the databull Codes are assigned records are linked etc
bull However SOI excludes updated taxpayer information from amended returns as well as from examinations
bull Question from previous Consultantsrsquo Panels How would the inclusion of amended and examined returns affect SOIrsquos products
2
Research Question
bull What is the impact of including amended and examined returns to SOIrsquos products
bull Projectrsquos Scope
bull Two approaches Individual and Corporate
bull Updates to Forms 1040 and 1120 filed in Tax Year 2013
bull Aggregate Changes (instead of line item)
bull Effect on SOIrsquos Individual and Corporate Samples
3
Presentation Outline
bull Individual Post-Filing Adjustments
bull Corporate Post-Filing Adjustments
bull Overall Conclusions
bull Questions and Comments
4
Individual Post-Filing Adjustments
5
Previous Reports
bull Office of Compliance Analyticsrsquo 2012 Report on Amended Returns
bull Analyzed available 1040X data on the Compliance Data Warehouse for Tax Years 2000 to 2008
bull Relevance Provided statistics to compare our results with
bull 2014 Statement of Workbull Intended to provide statistics on amended returns especially in
terms of filing patterns return characteristics and indicators of non-compliance
bull Relevance Provided validation of the appropriate datasets and variables to use
6
Published Statistics
bull Publication 6186bull Provided a count of the actual and projected Calendar Year returns for various
forms
bull Relevance Provided the volume of Form 1040X filed each Calendar Year (but notthe dollar amounts)
bull 2014 Data Bookbull Annual publication that contained statistical tables and organizational information
on collected revenue issued refunds taxpayer assistance etc
bull Relevance Provided statistics on examination data
bull Publication 1304 (Individual Income Tax Returns Complete Report)bull Provided statistics on individual income tax returns
bull Relevance Reported the number of Form 1040 filed for Tax Year 2013
7
Amended Return (Form 1040X)
bull A form used to correct a previously filed Form 1040 (or another Form 1040X)
bull Can only be filed on paper (cannot be filed electronically)
bull Filed within 3 years after the date that the taxpayer filed the original return OR within 2 years of the date that the taxes were paid whichever is later bull Special considerations are made for
net operating losses foreign tax credits bad debts and other issues
8 Sources httpswwwirsgovtaxtopicstc308 httpswwwirsgovpubirs-priori1040x--2014pdf
5832
2691
1047
431
-
500
1000
1500
2000
2500
lt1 year ge1 year but lt2 years
ge2 years but lt3 years
ge 3 years
Num
ber o
f Am
ende
d R
etur
ns (i
n th
ousa
nds)
Difference from Form 1040 (TY 2013) filing date
Filing Date of Form 1040X
Form 1040X
9
Form 1040X
10
Form 1040X
11
Taxable Income
Explanation of ChangesTotal Tax
Total Payments
Amount You Owe or Refunds
Exemptions
Examined Return
bullA tax return is examined for the accuracy of reported income expenses and credits
bull Selection of returns is based on a computerized screening random sample an income document matching program or as the result of information given by a third party
bullAudited returns can extend to returns filed within the last three years and up to six years (if substantial errors are identified)
bullAudit lengths vary
12 Sources httpswwwirsgovpublicationsp556 httpswwwirsgovbusinessessmall-businesses-self-employedirs-auditsfar-back
6
51
26
12
31
-
100000
200000
300000
400000
500000
600000
2014 2015 2016 2017 2018 2019
Num
ber o
f Exa
min
ed R
etur
ns
Fiscal Year (in which Tax Year 2013 Returns were closed in)
Closed Examined Form 1040s from Tax Year 2013 by Fiscal Year
Data
bull Source Compliance Data Warehouse
bull Additional Cleaning Removed invalid SSNs and duplicates etc
bull Limitations and Complications1 Lack of data on Form 1040X
bull Loss of information due to aggregation on the form2 Lack of Form 1040X data on the Master File
bull Lack of access to line item data on Form 1040Xbull Cannot isolate tax changes due to amended returns
3 Margin for human error due to paper-filing
13
Results for Tax Year 2013
bull Population Data from the Master Filebull 14683 million Form 1040s Filedbull 332 million Form 1040Xs Filed (226 percent)
bull 930841 Individual Returns were Examined (063 percent)
14
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
15
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Project Motivation
bull The Statistics of Income (SOI) produces various products utilizing originally filed Forms 1040 and 1120 along with additional forms and schedules
bull Brief Overview of Processing Taxpayersrsquo Data bull Taxpayers submit their tax returns to the IRS
bull The IRS transcribes and edits taxpayersrsquo information
bull SOI receives the edited IRS data and further transcribes and edits the databull Codes are assigned records are linked etc
bull However SOI excludes updated taxpayer information from amended returns as well as from examinations
bull Question from previous Consultantsrsquo Panels How would the inclusion of amended and examined returns affect SOIrsquos products
2
Research Question
bull What is the impact of including amended and examined returns to SOIrsquos products
bull Projectrsquos Scope
bull Two approaches Individual and Corporate
bull Updates to Forms 1040 and 1120 filed in Tax Year 2013
bull Aggregate Changes (instead of line item)
bull Effect on SOIrsquos Individual and Corporate Samples
3
Presentation Outline
bull Individual Post-Filing Adjustments
bull Corporate Post-Filing Adjustments
bull Overall Conclusions
bull Questions and Comments
4
Individual Post-Filing Adjustments
5
Previous Reports
bull Office of Compliance Analyticsrsquo 2012 Report on Amended Returns
bull Analyzed available 1040X data on the Compliance Data Warehouse for Tax Years 2000 to 2008
bull Relevance Provided statistics to compare our results with
bull 2014 Statement of Workbull Intended to provide statistics on amended returns especially in
terms of filing patterns return characteristics and indicators of non-compliance
bull Relevance Provided validation of the appropriate datasets and variables to use
6
Published Statistics
bull Publication 6186bull Provided a count of the actual and projected Calendar Year returns for various
forms
bull Relevance Provided the volume of Form 1040X filed each Calendar Year (but notthe dollar amounts)
bull 2014 Data Bookbull Annual publication that contained statistical tables and organizational information
on collected revenue issued refunds taxpayer assistance etc
bull Relevance Provided statistics on examination data
bull Publication 1304 (Individual Income Tax Returns Complete Report)bull Provided statistics on individual income tax returns
bull Relevance Reported the number of Form 1040 filed for Tax Year 2013
7
Amended Return (Form 1040X)
bull A form used to correct a previously filed Form 1040 (or another Form 1040X)
bull Can only be filed on paper (cannot be filed electronically)
bull Filed within 3 years after the date that the taxpayer filed the original return OR within 2 years of the date that the taxes were paid whichever is later bull Special considerations are made for
net operating losses foreign tax credits bad debts and other issues
8 Sources httpswwwirsgovtaxtopicstc308 httpswwwirsgovpubirs-priori1040x--2014pdf
5832
2691
1047
431
-
500
1000
1500
2000
2500
lt1 year ge1 year but lt2 years
ge2 years but lt3 years
ge 3 years
Num
ber o
f Am
ende
d R
etur
ns (i
n th
ousa
nds)
Difference from Form 1040 (TY 2013) filing date
Filing Date of Form 1040X
Form 1040X
9
Form 1040X
10
Form 1040X
11
Taxable Income
Explanation of ChangesTotal Tax
Total Payments
Amount You Owe or Refunds
Exemptions
Examined Return
bullA tax return is examined for the accuracy of reported income expenses and credits
bull Selection of returns is based on a computerized screening random sample an income document matching program or as the result of information given by a third party
bullAudited returns can extend to returns filed within the last three years and up to six years (if substantial errors are identified)
bullAudit lengths vary
12 Sources httpswwwirsgovpublicationsp556 httpswwwirsgovbusinessessmall-businesses-self-employedirs-auditsfar-back
6
51
26
12
31
-
100000
200000
300000
400000
500000
600000
2014 2015 2016 2017 2018 2019
Num
ber o
f Exa
min
ed R
etur
ns
Fiscal Year (in which Tax Year 2013 Returns were closed in)
Closed Examined Form 1040s from Tax Year 2013 by Fiscal Year
Data
bull Source Compliance Data Warehouse
bull Additional Cleaning Removed invalid SSNs and duplicates etc
bull Limitations and Complications1 Lack of data on Form 1040X
bull Loss of information due to aggregation on the form2 Lack of Form 1040X data on the Master File
bull Lack of access to line item data on Form 1040Xbull Cannot isolate tax changes due to amended returns
3 Margin for human error due to paper-filing
13
Results for Tax Year 2013
bull Population Data from the Master Filebull 14683 million Form 1040s Filedbull 332 million Form 1040Xs Filed (226 percent)
bull 930841 Individual Returns were Examined (063 percent)
14
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
15
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Research Question
bull What is the impact of including amended and examined returns to SOIrsquos products
bull Projectrsquos Scope
bull Two approaches Individual and Corporate
bull Updates to Forms 1040 and 1120 filed in Tax Year 2013
bull Aggregate Changes (instead of line item)
bull Effect on SOIrsquos Individual and Corporate Samples
3
Presentation Outline
bull Individual Post-Filing Adjustments
bull Corporate Post-Filing Adjustments
bull Overall Conclusions
bull Questions and Comments
4
Individual Post-Filing Adjustments
5
Previous Reports
bull Office of Compliance Analyticsrsquo 2012 Report on Amended Returns
bull Analyzed available 1040X data on the Compliance Data Warehouse for Tax Years 2000 to 2008
bull Relevance Provided statistics to compare our results with
bull 2014 Statement of Workbull Intended to provide statistics on amended returns especially in
terms of filing patterns return characteristics and indicators of non-compliance
bull Relevance Provided validation of the appropriate datasets and variables to use
6
Published Statistics
bull Publication 6186bull Provided a count of the actual and projected Calendar Year returns for various
forms
bull Relevance Provided the volume of Form 1040X filed each Calendar Year (but notthe dollar amounts)
bull 2014 Data Bookbull Annual publication that contained statistical tables and organizational information
on collected revenue issued refunds taxpayer assistance etc
bull Relevance Provided statistics on examination data
bull Publication 1304 (Individual Income Tax Returns Complete Report)bull Provided statistics on individual income tax returns
bull Relevance Reported the number of Form 1040 filed for Tax Year 2013
7
Amended Return (Form 1040X)
bull A form used to correct a previously filed Form 1040 (or another Form 1040X)
bull Can only be filed on paper (cannot be filed electronically)
bull Filed within 3 years after the date that the taxpayer filed the original return OR within 2 years of the date that the taxes were paid whichever is later bull Special considerations are made for
net operating losses foreign tax credits bad debts and other issues
8 Sources httpswwwirsgovtaxtopicstc308 httpswwwirsgovpubirs-priori1040x--2014pdf
5832
2691
1047
431
-
500
1000
1500
2000
2500
lt1 year ge1 year but lt2 years
ge2 years but lt3 years
ge 3 years
Num
ber o
f Am
ende
d R
etur
ns (i
n th
ousa
nds)
Difference from Form 1040 (TY 2013) filing date
Filing Date of Form 1040X
Form 1040X
9
Form 1040X
10
Form 1040X
11
Taxable Income
Explanation of ChangesTotal Tax
Total Payments
Amount You Owe or Refunds
Exemptions
Examined Return
bullA tax return is examined for the accuracy of reported income expenses and credits
bull Selection of returns is based on a computerized screening random sample an income document matching program or as the result of information given by a third party
bullAudited returns can extend to returns filed within the last three years and up to six years (if substantial errors are identified)
bullAudit lengths vary
12 Sources httpswwwirsgovpublicationsp556 httpswwwirsgovbusinessessmall-businesses-self-employedirs-auditsfar-back
6
51
26
12
31
-
100000
200000
300000
400000
500000
600000
2014 2015 2016 2017 2018 2019
Num
ber o
f Exa
min
ed R
etur
ns
Fiscal Year (in which Tax Year 2013 Returns were closed in)
Closed Examined Form 1040s from Tax Year 2013 by Fiscal Year
Data
bull Source Compliance Data Warehouse
bull Additional Cleaning Removed invalid SSNs and duplicates etc
bull Limitations and Complications1 Lack of data on Form 1040X
bull Loss of information due to aggregation on the form2 Lack of Form 1040X data on the Master File
bull Lack of access to line item data on Form 1040Xbull Cannot isolate tax changes due to amended returns
3 Margin for human error due to paper-filing
13
Results for Tax Year 2013
bull Population Data from the Master Filebull 14683 million Form 1040s Filedbull 332 million Form 1040Xs Filed (226 percent)
bull 930841 Individual Returns were Examined (063 percent)
14
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
15
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Presentation Outline
bull Individual Post-Filing Adjustments
bull Corporate Post-Filing Adjustments
bull Overall Conclusions
bull Questions and Comments
4
Individual Post-Filing Adjustments
5
Previous Reports
bull Office of Compliance Analyticsrsquo 2012 Report on Amended Returns
bull Analyzed available 1040X data on the Compliance Data Warehouse for Tax Years 2000 to 2008
bull Relevance Provided statistics to compare our results with
bull 2014 Statement of Workbull Intended to provide statistics on amended returns especially in
terms of filing patterns return characteristics and indicators of non-compliance
bull Relevance Provided validation of the appropriate datasets and variables to use
6
Published Statistics
bull Publication 6186bull Provided a count of the actual and projected Calendar Year returns for various
forms
bull Relevance Provided the volume of Form 1040X filed each Calendar Year (but notthe dollar amounts)
bull 2014 Data Bookbull Annual publication that contained statistical tables and organizational information
on collected revenue issued refunds taxpayer assistance etc
bull Relevance Provided statistics on examination data
bull Publication 1304 (Individual Income Tax Returns Complete Report)bull Provided statistics on individual income tax returns
bull Relevance Reported the number of Form 1040 filed for Tax Year 2013
7
Amended Return (Form 1040X)
bull A form used to correct a previously filed Form 1040 (or another Form 1040X)
bull Can only be filed on paper (cannot be filed electronically)
bull Filed within 3 years after the date that the taxpayer filed the original return OR within 2 years of the date that the taxes were paid whichever is later bull Special considerations are made for
net operating losses foreign tax credits bad debts and other issues
8 Sources httpswwwirsgovtaxtopicstc308 httpswwwirsgovpubirs-priori1040x--2014pdf
5832
2691
1047
431
-
500
1000
1500
2000
2500
lt1 year ge1 year but lt2 years
ge2 years but lt3 years
ge 3 years
Num
ber o
f Am
ende
d R
etur
ns (i
n th
ousa
nds)
Difference from Form 1040 (TY 2013) filing date
Filing Date of Form 1040X
Form 1040X
9
Form 1040X
10
Form 1040X
11
Taxable Income
Explanation of ChangesTotal Tax
Total Payments
Amount You Owe or Refunds
Exemptions
Examined Return
bullA tax return is examined for the accuracy of reported income expenses and credits
bull Selection of returns is based on a computerized screening random sample an income document matching program or as the result of information given by a third party
bullAudited returns can extend to returns filed within the last three years and up to six years (if substantial errors are identified)
bullAudit lengths vary
12 Sources httpswwwirsgovpublicationsp556 httpswwwirsgovbusinessessmall-businesses-self-employedirs-auditsfar-back
6
51
26
12
31
-
100000
200000
300000
400000
500000
600000
2014 2015 2016 2017 2018 2019
Num
ber o
f Exa
min
ed R
etur
ns
Fiscal Year (in which Tax Year 2013 Returns were closed in)
Closed Examined Form 1040s from Tax Year 2013 by Fiscal Year
Data
bull Source Compliance Data Warehouse
bull Additional Cleaning Removed invalid SSNs and duplicates etc
bull Limitations and Complications1 Lack of data on Form 1040X
bull Loss of information due to aggregation on the form2 Lack of Form 1040X data on the Master File
bull Lack of access to line item data on Form 1040Xbull Cannot isolate tax changes due to amended returns
3 Margin for human error due to paper-filing
13
Results for Tax Year 2013
bull Population Data from the Master Filebull 14683 million Form 1040s Filedbull 332 million Form 1040Xs Filed (226 percent)
bull 930841 Individual Returns were Examined (063 percent)
14
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
15
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Individual Post-Filing Adjustments
5
Previous Reports
bull Office of Compliance Analyticsrsquo 2012 Report on Amended Returns
bull Analyzed available 1040X data on the Compliance Data Warehouse for Tax Years 2000 to 2008
bull Relevance Provided statistics to compare our results with
bull 2014 Statement of Workbull Intended to provide statistics on amended returns especially in
terms of filing patterns return characteristics and indicators of non-compliance
bull Relevance Provided validation of the appropriate datasets and variables to use
6
Published Statistics
bull Publication 6186bull Provided a count of the actual and projected Calendar Year returns for various
forms
bull Relevance Provided the volume of Form 1040X filed each Calendar Year (but notthe dollar amounts)
bull 2014 Data Bookbull Annual publication that contained statistical tables and organizational information
on collected revenue issued refunds taxpayer assistance etc
bull Relevance Provided statistics on examination data
bull Publication 1304 (Individual Income Tax Returns Complete Report)bull Provided statistics on individual income tax returns
bull Relevance Reported the number of Form 1040 filed for Tax Year 2013
7
Amended Return (Form 1040X)
bull A form used to correct a previously filed Form 1040 (or another Form 1040X)
bull Can only be filed on paper (cannot be filed electronically)
bull Filed within 3 years after the date that the taxpayer filed the original return OR within 2 years of the date that the taxes were paid whichever is later bull Special considerations are made for
net operating losses foreign tax credits bad debts and other issues
8 Sources httpswwwirsgovtaxtopicstc308 httpswwwirsgovpubirs-priori1040x--2014pdf
5832
2691
1047
431
-
500
1000
1500
2000
2500
lt1 year ge1 year but lt2 years
ge2 years but lt3 years
ge 3 years
Num
ber o
f Am
ende
d R
etur
ns (i
n th
ousa
nds)
Difference from Form 1040 (TY 2013) filing date
Filing Date of Form 1040X
Form 1040X
9
Form 1040X
10
Form 1040X
11
Taxable Income
Explanation of ChangesTotal Tax
Total Payments
Amount You Owe or Refunds
Exemptions
Examined Return
bullA tax return is examined for the accuracy of reported income expenses and credits
bull Selection of returns is based on a computerized screening random sample an income document matching program or as the result of information given by a third party
bullAudited returns can extend to returns filed within the last three years and up to six years (if substantial errors are identified)
bullAudit lengths vary
12 Sources httpswwwirsgovpublicationsp556 httpswwwirsgovbusinessessmall-businesses-self-employedirs-auditsfar-back
6
51
26
12
31
-
100000
200000
300000
400000
500000
600000
2014 2015 2016 2017 2018 2019
Num
ber o
f Exa
min
ed R
etur
ns
Fiscal Year (in which Tax Year 2013 Returns were closed in)
Closed Examined Form 1040s from Tax Year 2013 by Fiscal Year
Data
bull Source Compliance Data Warehouse
bull Additional Cleaning Removed invalid SSNs and duplicates etc
bull Limitations and Complications1 Lack of data on Form 1040X
bull Loss of information due to aggregation on the form2 Lack of Form 1040X data on the Master File
bull Lack of access to line item data on Form 1040Xbull Cannot isolate tax changes due to amended returns
3 Margin for human error due to paper-filing
13
Results for Tax Year 2013
bull Population Data from the Master Filebull 14683 million Form 1040s Filedbull 332 million Form 1040Xs Filed (226 percent)
bull 930841 Individual Returns were Examined (063 percent)
14
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
15
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Previous Reports
bull Office of Compliance Analyticsrsquo 2012 Report on Amended Returns
bull Analyzed available 1040X data on the Compliance Data Warehouse for Tax Years 2000 to 2008
bull Relevance Provided statistics to compare our results with
bull 2014 Statement of Workbull Intended to provide statistics on amended returns especially in
terms of filing patterns return characteristics and indicators of non-compliance
bull Relevance Provided validation of the appropriate datasets and variables to use
6
Published Statistics
bull Publication 6186bull Provided a count of the actual and projected Calendar Year returns for various
forms
bull Relevance Provided the volume of Form 1040X filed each Calendar Year (but notthe dollar amounts)
bull 2014 Data Bookbull Annual publication that contained statistical tables and organizational information
on collected revenue issued refunds taxpayer assistance etc
bull Relevance Provided statistics on examination data
bull Publication 1304 (Individual Income Tax Returns Complete Report)bull Provided statistics on individual income tax returns
bull Relevance Reported the number of Form 1040 filed for Tax Year 2013
7
Amended Return (Form 1040X)
bull A form used to correct a previously filed Form 1040 (or another Form 1040X)
bull Can only be filed on paper (cannot be filed electronically)
bull Filed within 3 years after the date that the taxpayer filed the original return OR within 2 years of the date that the taxes were paid whichever is later bull Special considerations are made for
net operating losses foreign tax credits bad debts and other issues
8 Sources httpswwwirsgovtaxtopicstc308 httpswwwirsgovpubirs-priori1040x--2014pdf
5832
2691
1047
431
-
500
1000
1500
2000
2500
lt1 year ge1 year but lt2 years
ge2 years but lt3 years
ge 3 years
Num
ber o
f Am
ende
d R
etur
ns (i
n th
ousa
nds)
Difference from Form 1040 (TY 2013) filing date
Filing Date of Form 1040X
Form 1040X
9
Form 1040X
10
Form 1040X
11
Taxable Income
Explanation of ChangesTotal Tax
Total Payments
Amount You Owe or Refunds
Exemptions
Examined Return
bullA tax return is examined for the accuracy of reported income expenses and credits
bull Selection of returns is based on a computerized screening random sample an income document matching program or as the result of information given by a third party
bullAudited returns can extend to returns filed within the last three years and up to six years (if substantial errors are identified)
bullAudit lengths vary
12 Sources httpswwwirsgovpublicationsp556 httpswwwirsgovbusinessessmall-businesses-self-employedirs-auditsfar-back
6
51
26
12
31
-
100000
200000
300000
400000
500000
600000
2014 2015 2016 2017 2018 2019
Num
ber o
f Exa
min
ed R
etur
ns
Fiscal Year (in which Tax Year 2013 Returns were closed in)
Closed Examined Form 1040s from Tax Year 2013 by Fiscal Year
Data
bull Source Compliance Data Warehouse
bull Additional Cleaning Removed invalid SSNs and duplicates etc
bull Limitations and Complications1 Lack of data on Form 1040X
bull Loss of information due to aggregation on the form2 Lack of Form 1040X data on the Master File
bull Lack of access to line item data on Form 1040Xbull Cannot isolate tax changes due to amended returns
3 Margin for human error due to paper-filing
13
Results for Tax Year 2013
bull Population Data from the Master Filebull 14683 million Form 1040s Filedbull 332 million Form 1040Xs Filed (226 percent)
bull 930841 Individual Returns were Examined (063 percent)
14
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
15
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Published Statistics
bull Publication 6186bull Provided a count of the actual and projected Calendar Year returns for various
forms
bull Relevance Provided the volume of Form 1040X filed each Calendar Year (but notthe dollar amounts)
bull 2014 Data Bookbull Annual publication that contained statistical tables and organizational information
on collected revenue issued refunds taxpayer assistance etc
bull Relevance Provided statistics on examination data
bull Publication 1304 (Individual Income Tax Returns Complete Report)bull Provided statistics on individual income tax returns
bull Relevance Reported the number of Form 1040 filed for Tax Year 2013
7
Amended Return (Form 1040X)
bull A form used to correct a previously filed Form 1040 (or another Form 1040X)
bull Can only be filed on paper (cannot be filed electronically)
bull Filed within 3 years after the date that the taxpayer filed the original return OR within 2 years of the date that the taxes were paid whichever is later bull Special considerations are made for
net operating losses foreign tax credits bad debts and other issues
8 Sources httpswwwirsgovtaxtopicstc308 httpswwwirsgovpubirs-priori1040x--2014pdf
5832
2691
1047
431
-
500
1000
1500
2000
2500
lt1 year ge1 year but lt2 years
ge2 years but lt3 years
ge 3 years
Num
ber o
f Am
ende
d R
etur
ns (i
n th
ousa
nds)
Difference from Form 1040 (TY 2013) filing date
Filing Date of Form 1040X
Form 1040X
9
Form 1040X
10
Form 1040X
11
Taxable Income
Explanation of ChangesTotal Tax
Total Payments
Amount You Owe or Refunds
Exemptions
Examined Return
bullA tax return is examined for the accuracy of reported income expenses and credits
bull Selection of returns is based on a computerized screening random sample an income document matching program or as the result of information given by a third party
bullAudited returns can extend to returns filed within the last three years and up to six years (if substantial errors are identified)
bullAudit lengths vary
12 Sources httpswwwirsgovpublicationsp556 httpswwwirsgovbusinessessmall-businesses-self-employedirs-auditsfar-back
6
51
26
12
31
-
100000
200000
300000
400000
500000
600000
2014 2015 2016 2017 2018 2019
Num
ber o
f Exa
min
ed R
etur
ns
Fiscal Year (in which Tax Year 2013 Returns were closed in)
Closed Examined Form 1040s from Tax Year 2013 by Fiscal Year
Data
bull Source Compliance Data Warehouse
bull Additional Cleaning Removed invalid SSNs and duplicates etc
bull Limitations and Complications1 Lack of data on Form 1040X
bull Loss of information due to aggregation on the form2 Lack of Form 1040X data on the Master File
bull Lack of access to line item data on Form 1040Xbull Cannot isolate tax changes due to amended returns
3 Margin for human error due to paper-filing
13
Results for Tax Year 2013
bull Population Data from the Master Filebull 14683 million Form 1040s Filedbull 332 million Form 1040Xs Filed (226 percent)
bull 930841 Individual Returns were Examined (063 percent)
14
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
15
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Amended Return (Form 1040X)
bull A form used to correct a previously filed Form 1040 (or another Form 1040X)
bull Can only be filed on paper (cannot be filed electronically)
bull Filed within 3 years after the date that the taxpayer filed the original return OR within 2 years of the date that the taxes were paid whichever is later bull Special considerations are made for
net operating losses foreign tax credits bad debts and other issues
8 Sources httpswwwirsgovtaxtopicstc308 httpswwwirsgovpubirs-priori1040x--2014pdf
5832
2691
1047
431
-
500
1000
1500
2000
2500
lt1 year ge1 year but lt2 years
ge2 years but lt3 years
ge 3 years
Num
ber o
f Am
ende
d R
etur
ns (i
n th
ousa
nds)
Difference from Form 1040 (TY 2013) filing date
Filing Date of Form 1040X
Form 1040X
9
Form 1040X
10
Form 1040X
11
Taxable Income
Explanation of ChangesTotal Tax
Total Payments
Amount You Owe or Refunds
Exemptions
Examined Return
bullA tax return is examined for the accuracy of reported income expenses and credits
bull Selection of returns is based on a computerized screening random sample an income document matching program or as the result of information given by a third party
bullAudited returns can extend to returns filed within the last three years and up to six years (if substantial errors are identified)
bullAudit lengths vary
12 Sources httpswwwirsgovpublicationsp556 httpswwwirsgovbusinessessmall-businesses-self-employedirs-auditsfar-back
6
51
26
12
31
-
100000
200000
300000
400000
500000
600000
2014 2015 2016 2017 2018 2019
Num
ber o
f Exa
min
ed R
etur
ns
Fiscal Year (in which Tax Year 2013 Returns were closed in)
Closed Examined Form 1040s from Tax Year 2013 by Fiscal Year
Data
bull Source Compliance Data Warehouse
bull Additional Cleaning Removed invalid SSNs and duplicates etc
bull Limitations and Complications1 Lack of data on Form 1040X
bull Loss of information due to aggregation on the form2 Lack of Form 1040X data on the Master File
bull Lack of access to line item data on Form 1040Xbull Cannot isolate tax changes due to amended returns
3 Margin for human error due to paper-filing
13
Results for Tax Year 2013
bull Population Data from the Master Filebull 14683 million Form 1040s Filedbull 332 million Form 1040Xs Filed (226 percent)
bull 930841 Individual Returns were Examined (063 percent)
14
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
15
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Form 1040X
9
Form 1040X
10
Form 1040X
11
Taxable Income
Explanation of ChangesTotal Tax
Total Payments
Amount You Owe or Refunds
Exemptions
Examined Return
bullA tax return is examined for the accuracy of reported income expenses and credits
bull Selection of returns is based on a computerized screening random sample an income document matching program or as the result of information given by a third party
bullAudited returns can extend to returns filed within the last three years and up to six years (if substantial errors are identified)
bullAudit lengths vary
12 Sources httpswwwirsgovpublicationsp556 httpswwwirsgovbusinessessmall-businesses-self-employedirs-auditsfar-back
6
51
26
12
31
-
100000
200000
300000
400000
500000
600000
2014 2015 2016 2017 2018 2019
Num
ber o
f Exa
min
ed R
etur
ns
Fiscal Year (in which Tax Year 2013 Returns were closed in)
Closed Examined Form 1040s from Tax Year 2013 by Fiscal Year
Data
bull Source Compliance Data Warehouse
bull Additional Cleaning Removed invalid SSNs and duplicates etc
bull Limitations and Complications1 Lack of data on Form 1040X
bull Loss of information due to aggregation on the form2 Lack of Form 1040X data on the Master File
bull Lack of access to line item data on Form 1040Xbull Cannot isolate tax changes due to amended returns
3 Margin for human error due to paper-filing
13
Results for Tax Year 2013
bull Population Data from the Master Filebull 14683 million Form 1040s Filedbull 332 million Form 1040Xs Filed (226 percent)
bull 930841 Individual Returns were Examined (063 percent)
14
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
15
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Form 1040X
10
Form 1040X
11
Taxable Income
Explanation of ChangesTotal Tax
Total Payments
Amount You Owe or Refunds
Exemptions
Examined Return
bullA tax return is examined for the accuracy of reported income expenses and credits
bull Selection of returns is based on a computerized screening random sample an income document matching program or as the result of information given by a third party
bullAudited returns can extend to returns filed within the last three years and up to six years (if substantial errors are identified)
bullAudit lengths vary
12 Sources httpswwwirsgovpublicationsp556 httpswwwirsgovbusinessessmall-businesses-self-employedirs-auditsfar-back
6
51
26
12
31
-
100000
200000
300000
400000
500000
600000
2014 2015 2016 2017 2018 2019
Num
ber o
f Exa
min
ed R
etur
ns
Fiscal Year (in which Tax Year 2013 Returns were closed in)
Closed Examined Form 1040s from Tax Year 2013 by Fiscal Year
Data
bull Source Compliance Data Warehouse
bull Additional Cleaning Removed invalid SSNs and duplicates etc
bull Limitations and Complications1 Lack of data on Form 1040X
bull Loss of information due to aggregation on the form2 Lack of Form 1040X data on the Master File
bull Lack of access to line item data on Form 1040Xbull Cannot isolate tax changes due to amended returns
3 Margin for human error due to paper-filing
13
Results for Tax Year 2013
bull Population Data from the Master Filebull 14683 million Form 1040s Filedbull 332 million Form 1040Xs Filed (226 percent)
bull 930841 Individual Returns were Examined (063 percent)
14
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
15
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Form 1040X
11
Taxable Income
Explanation of ChangesTotal Tax
Total Payments
Amount You Owe or Refunds
Exemptions
Examined Return
bullA tax return is examined for the accuracy of reported income expenses and credits
bull Selection of returns is based on a computerized screening random sample an income document matching program or as the result of information given by a third party
bullAudited returns can extend to returns filed within the last three years and up to six years (if substantial errors are identified)
bullAudit lengths vary
12 Sources httpswwwirsgovpublicationsp556 httpswwwirsgovbusinessessmall-businesses-self-employedirs-auditsfar-back
6
51
26
12
31
-
100000
200000
300000
400000
500000
600000
2014 2015 2016 2017 2018 2019
Num
ber o
f Exa
min
ed R
etur
ns
Fiscal Year (in which Tax Year 2013 Returns were closed in)
Closed Examined Form 1040s from Tax Year 2013 by Fiscal Year
Data
bull Source Compliance Data Warehouse
bull Additional Cleaning Removed invalid SSNs and duplicates etc
bull Limitations and Complications1 Lack of data on Form 1040X
bull Loss of information due to aggregation on the form2 Lack of Form 1040X data on the Master File
bull Lack of access to line item data on Form 1040Xbull Cannot isolate tax changes due to amended returns
3 Margin for human error due to paper-filing
13
Results for Tax Year 2013
bull Population Data from the Master Filebull 14683 million Form 1040s Filedbull 332 million Form 1040Xs Filed (226 percent)
bull 930841 Individual Returns were Examined (063 percent)
14
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
15
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Examined Return
bullA tax return is examined for the accuracy of reported income expenses and credits
bull Selection of returns is based on a computerized screening random sample an income document matching program or as the result of information given by a third party
bullAudited returns can extend to returns filed within the last three years and up to six years (if substantial errors are identified)
bullAudit lengths vary
12 Sources httpswwwirsgovpublicationsp556 httpswwwirsgovbusinessessmall-businesses-self-employedirs-auditsfar-back
6
51
26
12
31
-
100000
200000
300000
400000
500000
600000
2014 2015 2016 2017 2018 2019
Num
ber o
f Exa
min
ed R
etur
ns
Fiscal Year (in which Tax Year 2013 Returns were closed in)
Closed Examined Form 1040s from Tax Year 2013 by Fiscal Year
Data
bull Source Compliance Data Warehouse
bull Additional Cleaning Removed invalid SSNs and duplicates etc
bull Limitations and Complications1 Lack of data on Form 1040X
bull Loss of information due to aggregation on the form2 Lack of Form 1040X data on the Master File
bull Lack of access to line item data on Form 1040Xbull Cannot isolate tax changes due to amended returns
3 Margin for human error due to paper-filing
13
Results for Tax Year 2013
bull Population Data from the Master Filebull 14683 million Form 1040s Filedbull 332 million Form 1040Xs Filed (226 percent)
bull 930841 Individual Returns were Examined (063 percent)
14
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
15
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Data
bull Source Compliance Data Warehouse
bull Additional Cleaning Removed invalid SSNs and duplicates etc
bull Limitations and Complications1 Lack of data on Form 1040X
bull Loss of information due to aggregation on the form2 Lack of Form 1040X data on the Master File
bull Lack of access to line item data on Form 1040Xbull Cannot isolate tax changes due to amended returns
3 Margin for human error due to paper-filing
13
Results for Tax Year 2013
bull Population Data from the Master Filebull 14683 million Form 1040s Filedbull 332 million Form 1040Xs Filed (226 percent)
bull 930841 Individual Returns were Examined (063 percent)
14
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
15
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Results for Tax Year 2013
bull Population Data from the Master Filebull 14683 million Form 1040s Filedbull 332 million Form 1040Xs Filed (226 percent)
bull 930841 Individual Returns were Examined (063 percent)
14
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
15
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
15
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
bull Amended Returnsbull Tax Increase $253 billion
bull Tax Decrease -$464 billion
bull Net Amount -$211 billion
bull Examinationsbull Total Recommended Additional Tax $776 billion
bull Total Recommended Decrease in Taxes -$69933 million
bull Net Amount $706 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
16
016 percent decrease
054 percent increase
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Effect on SOIrsquos Products
bull Weighted SOI Individual Sample (Estimates)bull 14285 million Form 1040s Filed bull 321 million Form 1040Xs Filed (225 percent)
bull 829246 Individual Returns were Examined (058 percent)
17
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
18
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
bull Amended Returnsbull Tax Increase $252 billion
bull Tax Decrease -$456 billion
bull Net Amount -$204 billion
bull Examinationsbull Total Recommended Additional Tax $503 billion
bull Total Recommended Decrease in Taxes -$64622 million
bull Net Amount $438 billion
bull Total Amount of Taxes Collected from Tax Year 2013 $13 trillion
19
016 percent decrease
034 percent increase
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
20
33
53
2
11
0
34
45
4
17
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
KeyDark Green (Red) Arrow Increase (decrease) of at least 05 percentage points
Light Green (Red) Arrow Increase (decrease) of less than 05 percentage points
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
3
18 18 18 19
13
7
42
1718
2019
13
6
3
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Taxpayers who filed Form 1040X
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
21
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
0
10
20
30
40
50
60
Per
cent
Adjusted Gross Income
AGI of Single Married Filing Non-Jointly Head of Household and Widowed Taxpayers
Taxpayers Taxpayers wForm 1040X
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
22
0
5
10
15
20
25
30
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Taxpayers wForm 1040X
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
33
53
2
11
0
2326
2
49
00
10
20
30
40
50
60
Single Married Filing Jointly Married Filing Non-Jointly
Head of Household Widow
Per
cent
Filing Status
Filing Status of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
23
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
24
3
18 18 18 19
13
7
4
1
2123 22
21
9
20
0
5
10
15
20
25
Under 20 20 under 30 30 under 40 40 under 50 50 under 60 60 under 70 70 under 80 80 and older
Per
cent
Years of Age
Age of Taxpayers
Taxpayers Examined Taxpayers
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
25
01020304050607080
Per
cent
Adjusted Gross income
AGI of Single Married Filing Non-Jointly Head of Household and
Widowed Taxpayers
Taxpayers Examined Taxpayers
0
5
10
15
20
25
30
35
Per
cent
Adjusted Gross Income
AGI of Married Filing Jointly Taxpayers
Taxpayers Examined Taxpayers
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Conclusions
bull Amended and audited returns appear to have an effect on the population data although it is very small especially in the context of overall taxes
bull 226 percent of individual returns were amended
bull 063 percent of individual returns were examined
bull The effect of including amended and audited returns on the SOIrsquos individual sample is very close to the effect on the population data
bull 225 percent of individual returns were amended
bull 058 percent of individual returns were examined
bull Trends with Amended Return Filers and Examined Taxpayers
26
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
27
Corporate Post-Filing Adjustments
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
28
Forms 1120X Amended Corporate Income Tax Returns are corrections to Form 1120 returns that can either be overassessments (taxpayer is due a refund) of tax or underassessments of tax (taxpayer owes tax)
The goal of this project is to identify the impact of the changes reported by the Form 1120X on SOI estimates
Overview
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
29
Corporations file Form 1120X to
claim different types of refunds
file protective claims to extend the statute of limitations
request abatements of unpaid tax interest and penalties
Overview
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
30
Form 1120X Statutory Period of Limitation
Form 1120X must be filed within 3 years after the date the corporation filed its original return or within 2 years after the date the corporation paid the tax (if filing a claim for a refund) whichever is later
A Form 1120X based on a bad debt or worthless security must be filed within 7 years after the due date of the return for the tax year in which the debt or security became worthless
Overview
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
31
Other Statistics
Publication 6186
Calendar Year Projections for the United States and IRS Campuses httpswwwirsgovpubirs-soip6186pdf
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Research Focus
bull Corporations that filed a Form 1120X after a Form 1120
bull For SOI year 2013 bull Between the accounting period ending July
2013 through June 2014
bull Earliest SOI year given the long time period of filing for an amendment
32
July 2013
SOI YEAR 2013
Jun 2014
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
33
Form 1120X corresponding to SOI year 2013 can be filed in the following years
20142015
2016
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Filing and Processing Amendments
34
Form 1120X can be e-filed and paper-filed
0
10
20
30
40
50
60
70
80
90
100
Form 1120X Form 1120
E-filed and Paper-filed Form 1120X and Form 1120
E-filed Paper Filed
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
35
bull Filing procedures vary based on type of Form 1120 type of claim or correction amount etc
bull Amendment processing involves multiple IRS offices that follow different internal requirements based on the Form 1120 series filed
bull Amended returns processing procedures differ from an original Form 1120 return filing
Filing and Processing Procedures
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
36
Matching Process
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Preliminary Results
bull Total Amount of Taxes Collected Form 1120 SOI Year 2013 $282 billion
These numbers are preliminary and the data needs more work on isolation of amendment amounts and of superseded returns and protective claims
37
Form 1120X filing (For SOI Year 2013)Master File Population Data
Weighted SOI Sample (estimates)
Total number of Form 1120X filed (in thousands)
94 82
Percentage of Form 1120 amended by filing Form 1120X
052 046
Tax Adjustment (in millions) -$789 -$877
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Comparison of Master File Population and SOI Sample
bull When we compare the population data and weighted estimates from SOI sample we have two conclusions
bull The two percentages are close and very smallbull The tax adjustments are similar and very trivial compared
to total tax collected amount
38
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
1120X Filing Dates Relative to the Original 1120 Filing
39
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Within 1st year of 1120 filing | |
Within 2nd year of 1120 filing | |
Within 3rd year of 1120 filing | |
Within 4th year of 1120 filing | |
4 years or more of 1120 filing |
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Within 1st year of 1120 filing | 4473 | ||
Within 2nd year of 1120 filing | 3468 | ||
Within 3rd year of 1120 filing | 1364 | ||
Within 4th year of 1120 filing | 84 | ||
4 years or more of 1120 filing | 10 |
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Industry Distribution of Corporations Amended for SOI year 2013
40
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration) |
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
Industry Distribution of Corporations Amended for SOI year 2013
41
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises |
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
number of returns in sample | number of returns having 1120X | Industry | percentage of returns having 1120x | Percentages of Returns Associated by Form 1120X (by Industry) | |||||
49493 | 176 | Agriculture Forestry Fishing and Hunting | 035486711 | 035 | |||||
11227 | 42 | Mining Quarrying and Oil and Gas Extraction | 0373018537 | 037 | |||||
3899 | 7 | Utilities | 0177688157 | 018 | |||||
150367 | 728 | Construction | 0484262958 | 048 | |||||
84338 | 1211 | Manufacturing | 1435840536 | 144 | |||||
140892 | 1129 | Wholesale Trade | 0801672364 | 080 | |||||
166189 | 814 | Retail Trade | 0489785877 | 049 | |||||
67283 | 28 | Transportation and Warehousing | 00409708 | 004 | |||||
48268 | 507 | Information | 1051359179 | 105 | |||||
51837 | 240 | Finance and Insurance | 0463261702 | 046 | |||||
170939 | 255 | Real Estate and Rental and Leasing | 0149172536 | 015 | |||||
198318 | 1138 | Professional Scientific and Technical Services | 0573798699 | 057 | |||||
25352 | 430 | Management of Companies and Enterprises | 1696969231 | 170 | |||||
73548 | 125 | Administrative and Support and Waste Management and Remediation Services | 0170395949 | 017 | |||||
12734 | 26 | Educational Services | 0202680119 | 020 | |||||
102953 | 675 | Health Care and Social Assistance | 0655277688 | 066 | |||||
31231 | 98 | Arts Entertainment and Recreation | 031453018 | 031 | |||||
74577 | 155 | Accommodation and Food Services | 0207923079 | 021 | |||||
119364 | 447 | Other Services(except Public Administration) | 0374467162 | 037 |
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
Asset Distribution of Corporations Amended for SOI year 2013
42
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
Study of Audits
Scope Form 1120 Series bull We excluded Form 1120S and 1120F to align with the
amendment part of this project
Goal Identify the effect of audits on 1120 SOI Sample Statistics
bullWe are limited to tax changes
bullNo line item change
43
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
Other Statistics on Examinations
IRS Databook 2014
bull Returns examined in fiscal Year 2014
Our focus is returns that are filed for SOI year 2013 and examined in IRS offices
bullWe do not consider the timing of an examination
44
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
Examination in Master File Level Population Data
45
Returns filed For SOI year 2013 and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 82 $54
Tax Decrease 12 -$21
No Change 81 -
TOTAL 175 $33
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
Examination in SOI sample
bull For SOI year 2013 there were an estimated 16 million Form 1120 returns in the SOI corporation sampling frame
bull The weighted SOI sample contains 129 thousand examined Form 1120 returns
bull 079 of the SOI sample is examined
46
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
Examination estimates from SOI Sample
bull Those examinations resulted in (estimated)
47
Returns in SOI Sample and examined in IRS Offices
Recommended Tax Change
Number of Returns (in thousands)
Dollar Amount of Tax Change (in billions)
Tax Increase 53 $49
Tax Decrease 13 -$20
No Change 63 -
TOTAL 129 $29
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
Industry Distribution of Corporations Examined for SOI year 2013
48
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Agriculture Forestry Fishing and Hunting | |
Mining Quarrying and Oil and Gas Extraction | |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services | |
Health Care and Social Assistance | |
Arts Entertainment and Recreation | |
Accommodation and Food Services | |
Other Services(except Public Administration |
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
Industry Distribution of Corporations Examined for SOI year 2013
49
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Utilities | |
Construction | |
Manufacturing | |
Wholesale Trade | |
Retail Trade | |
Transportation and Warehousing | |
Information | |
Finance and Insurance | |
Real Estate and Rental and Leasing | |
Professional Scientific and Technical Services | |
Management of Companies and Enterprises | |
Administrative and Support and Waste Management and Remediation Services | |
Educational Services |
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
counts_examinedsample | counts_examined | Industry | percentage | Percentaged of Returns Examined (by Industry) | |||||
49291 | 408 | Agriculture Forestry Fishing and Hunting | 0827737315 | 083 | |||||
11302 | 138 | Mining Quarrying and Oil and Gas Extraction | 1221022828 | 122 | |||||
3919 | 63 | Utilities | 1607552947 | 161 | |||||
150580 | 794 | Construction | 0527294461 | 053 | |||||
84318 | 1584 | Manufacturing | 1878602434 | 188 | |||||
141078 | 1158 | Wholesale Trade | 0820822524 | 082 | |||||
166260 | 1981 | Retail Trade | 1191507278 | 119 | |||||
67245 | 545 | Transportation and Warehousing | 081046918 | 081 | |||||
48335 | 245 | Information | 0506879073 | 051 | |||||
80566 | 802 | Finance and Insurance | 0995457141 | 100 | |||||
172814 | 297 | Real Estate and Rental and Leasing | 0171861076 | 017 | |||||
198379 | 998 | Professional Scientific and Technical Services | 0503077443 | 050 | |||||
25364 | 263 | Management of Companies and Enterprises | 1036902697 | 104 | |||||
73587 | 232 | Administrative and Support and Waste Management and Remediation Services | 0315273078 | 032 | |||||
12720 | 286 | Educational Services | 2248427673 | 225 | |||||
102913 | 544 | Health Care and Social Assistance | 0528601829 | 053 | |||||
31252 | 297 | Arts Entertainment and Recreation | 0950339178 | 095 | |||||
74671 | 1275 | Accommodation and Food Services | 170749019 | 171 | |||||
119336 | 915 | Other Services(except Public Administration | 0766742643 | 077 |
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
Asset Distribution of Examined Form 1120 in SOI Sample
50
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Zero or less | |
1 thru 99999 | |
100000 thru 249999 | |
250000 thru 499999 | |
500000 thru 999999 | |
1000000 thru 4999999 | |
5000000 thru 9999999 | |
10000000 thru 24999999 | |
25000000 thru 49999999 | |
50000000 thru 99999999 | |
100000000 thru 249999999 | |
250000000 thru 499999999 | |
500000000 thru 999999999 | |
1000000000 thru 2499999999 | |
2500000000 or more |
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
counts_AR_asset | counts_sample_asset | Asset Distribution | Percentage of Examined Form 1120 (in SOI Sample by Asset) | Percentages of Examined Form 1120 in SOI Sample( by Assets) | |||||
1855 | 279131 | Zero or less | 0664562517 | 066 | |||||
1959 | 590685 | 1 thru 99999 | 0331648848 | 033 | |||||
1304 | 213551 | 100000 thru 249999 | 061062697 | 061 | |||||
1269 | 158634 | 250000 thru 499999 | 0799954613 | 080 | |||||
856 | 126590 | 500000 thru 999999 | 0676198752 | 068 | |||||
1083 | 153179 | 1000000 thru 4999999 | 0707015975 | 071 | |||||
371 | 28416 | 5000000 thru 9999999 | 1305602477 | 131 | |||||
836 | 22754 | 10000000 thru 24999999 | 3674079283 | 367 | |||||
409 | 10748 | 25000000 thru 49999999 | 3805359137 | 381 | |||||
680 | 7636 | 50000000 thru 99999999 | 8905185961 | 891 | |||||
644 | 7786 | 100000000 thru 249999999 | 8271256101 | 827 | |||||
432 | 4775 | 250000000 thru 499999999 | 9047120419 | 905 | |||||
301 | 3518 | 500000000 thru 999999999 | 8555997726 | 856 | |||||
289 | 3249 | 1000000000 thru 2499999999 | 8895044629 | 890 | |||||
537 | 3278 | 2500000000 or more | 16381940207 | 1638 |
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
Filing Method of Examined Form 1120
51
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Form 1120 | Form 1120 | ||
Examined Form 1120 | Examined Form 1120 |
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Filing Type | counts_sample_filing_unweighted | percentage_sample_filing_unweighted | counts_1120x_filing_population | Form 1120X | percentage_1120x_filing_unweighted | counts_1120x_filing_unweighted | percentage_1120x_filing_unweighted | counts_sample_filing_weighted | Form 1120 | Examined Form 1120 | counts_1120x_filing_weighted | percentage_1120x_filing_weighted | |||||||||||||
E-filed | 47379 | 842203498294 | 7186 | 76 | 698 | 961432506887 | 11048122299998 | 70 | 79 | 77087856 | 928853740796 | ||||||||||||||
Paper Filed | 8877 | 157796501706 | 2213 | 24 | 28 | 38567493113 | 477996890000007 | 30 | 21 | 5904603 | 71146259204 | ||||||||||||||
Total | 56256 | 100 | 9399 | 100 | 726 | 100 | 158280911999981 | 100 | 100 | 82992459 | 100 | ||||||||||||||
Jul-13 | |||||||||||||||||||||||||
Jun-14 |
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Conclusion
Studying Form 1120Xs is a limited way of researching amended corporation returnsbull Our Form 1120X filing study shows that an insignificant
percentage of Form 1120 filing in SOI Sample would be affected (046)
bull The money amount effect of that would be small estimated at $877 million net reduction in taxes
bull Some ambiguity still exists especially with respect to the tax amount change and superseded returns
52
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Conclusion
Amended corporation returns are complex due tobull Filing procedures vary based on type of Form 1120 type
of claim or correction time of filing claim etc
bull There are multiple ways of processing different forms
bull The data spread among several databases
bull SOI year differs from fiscal year
bull Data is subject to human error
53
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Conclusion
Examination results are preliminary and more research can be donebull A small percentage of returns in SOI sample was audited
(approximately 079)
bull Those returns cause considerably minor tax amount change in SOI sample (approximately $29 billion net tax increase)
bull We do not know whether the recommended tax change is implemented or not
54
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
55
OverallConclusions
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Overall Conclusions
bull Challenges to this studybull Aggregation on Forms 1040X and 1120X
bull Limited data availability
bull Answer to our Research Question Amended and audited returns constitute a small percentage of the population and result in a relatively small change to taxes
bull Profile of Amended Return Filers and Audited Returns
56
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
57
Questions and
Comments
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58
Research Group Members
Name SOI BranchDerrick Dennis Statistical ServicesJennifer Ferris Individual amp Tax ExemptChloe Gagin Corporation Partnership amp InternationalTuba Ozer-Gurbuz Corporation Partnership amp InternationalJulia Shiller Corporation Partnership amp InternationalChristopher Williams Individual amp Tax Exempt
58