by Brian Mahany
The Treasury Inspector General for Tax Administration (TIGTA) issued a report urging more audits of tax returns that report losses from rental real estate. The TIGTA report follows a Government Accountability office study in 2008 that found most taxpayers with rental real estate misreported their income and deductions.
As a result of the report and study, the IRS plans to audit more landlords and other claiming losses from rental real estate.
The Inspector General analyzed IRS data and found 340,588 returns with questionable rental real estate losses.
In addition to increased audits, the IRS plans on asking for more information on 2011 returns.
What does this mean for those claiming real estate rental losses? Expect more paperwork next year and an increased chance of being audited.
If you have falsely claimed rental real estate losses on prior returns or believe that there might be problems with your returns, contact a tax attorney. Prosecution can almost always be avoided if taxpayers come clean before the IRS makes the first contact. Penalties can often be reduced as well.
Mahany & Ertl is a full service law firm concentrating in helping people and businesses with tax problems. Audit defense, collection representation, criminal investigation defense, phony welfare benefit plans and U.S. Tax Court litigation, we can help.
Our Milwaukee tax attorneys have helped people across the U.S. from Maine to Hawaii. Brian Mahany is Maine’s former state revenue secretary, agent and Assistant Attorney General – Tax. All inquiries are kept in strict confidence. Call Brian at (414) 704-6731 for more information.