Corporate Taxes: Many Benefits and Few Costs to Reporting Net Operating Loss Carryover
GGD-93-131
Published: Sep 23, 1993. Publicly Released: Oct 25, 1993.
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Highlights
Pursuant to a congressional request, GAO provided information on corporate net operating losses (NOL), focusing on: (1) corporate NOL carryovers from past years; (2) Internal Revenue Service (IRS) taxpayer instructions on how to use NOL carryovers; (3) an IRS proposal to modify corporate tax returns to include the reporting of NOL carryover amounts; and (4) IRS enforcement efforts on NOL and net operating loss deduction (NOLD) reporting by corporations.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Internal Revenue Service | The Commissioner of Internal Revenue should revise IRS instructions on reporting NOLD to clarify amounts that can be deducted and to clearly define NOL carryover. |
IRS revised its tax instructions for tax year 1993.
|
| Internal Revenue Service | The Commissioner of Internal Revenue should require corporations to annually report their NOL carryovers and use the reported amounts to track corporate NOLD claims. |
IRS revised the tax return for 1993 to collect this information.
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CorporationsFinancial disclosureIncome taxesLossesReporting requirementsTax administrationTax return auditsTax returnsTaxesStatistical data