Tax Policy:

Information on Interest Deducted for Financing Mergers Is Not Available

GGD-88-58: Published: Mar 29, 1988. Publicly Released: Mar 29, 1988.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO examined tax deductions corporations took for interest from funds borrowed to finance mergers which required Federal Trade Commission (FTC) notification.

GAO found that information on interest deductions deriving from corporate mergers is not readily available, since the Internal Revenue Service (IRS), FTC, and the Securities and Exchange Commission (SEC) have no current need to systematically assemble such data. GAO also found that: (1) the number of mergers requiring FTC notification increased substantially, from 996 notifications in fiscal year (FY) 1981, to 2,533 in FY 1987; (2) FTC notification does not require information on corporate-merger financing; (3) IRS requires corporations to identify the total amount of interest expense, but does not require corporations to link interest expenses to the use of borrowed funds; and (4) although SEC collects some information regarding corporate-merger financing, it does not provide an accurate indication of the total amount of interest eligible for deduction for mergers in a given year.

Oct 19, 2020

Sep 23, 2020

Aug 31, 2020

Jun 29, 2020

Jun 16, 2020

May 1, 2020

Apr 30, 2020

  • tax icon, source: Eyewire

    Priority Open Recommendations:

    Internal Revenue Service
    GAO-20-548PR: Published: Apr 23, 2020. Publicly Released: Apr 30, 2020.

Apr 1, 2020

Mar 2, 2020

Feb 26, 2020

Looking for more? Browse all our products here