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
Division-wide Project Post-Filing Tax Adjustments · 9/6/2019 · • Publication 1304 (Individual Income Tax Returns Complete Report) • Provided statistics on individual 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
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)
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
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)
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
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)
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
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)
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
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)
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
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)
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
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)
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
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)
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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)
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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)
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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)
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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)
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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 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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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 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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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 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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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 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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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 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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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 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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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 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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Number of Form 1120X
[]
[]
4473
3468
1364
84
10
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
filingtime
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
filingtime
Number of Form 1120X
[]
[]
Industry Distribution of Corporations Amended for SOI year 2013
40
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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)
Chart1
Percentages of Returns Associated by Form 1120X (by Industry)
Percentages of Returns Associated with Form 1120X (by Industry)
00035486711
00037301854
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
00017039595
00020268012
00065527769
00031453018
00020792308
00037446716
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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)
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
Industry Distribution of Corporations Amended for SOI year 2013
41
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentages of Returns Associated with Form 1120X (by Industry)
00017768816
00048426296
00143584054
00080167236
00048978588
0000409708
00105135918
0004632617
00014917254
0005737987
00169696923
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
indy1
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
indy1
Percentages of Returns Associated by Form 1120X (by Industry)
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentaged of Returns Examined (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
00082773731
00122102283
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
00052860183
00095033918
00170749019
00076674264
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Industry Distribution of Corporations Examined for SOI year 2013
49
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentages of Returns Examined in SOI Sample (by Industry)
00160755295
00052729446
00187860243
00082082252
00119150728
00081046918
00050687907
00099545714
00017186108
00050307744
0010369027
00031527308
00224842767
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
examinationindy
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
examinationindy
Percentaged of Returns Examined (by Industry)
Percentaged of Returns Examined in SOI Sample (by Industry)
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Percentages of Returns Examined in SOI Sample (by Industry)
Asset Distribution of Examined Form 1120 in SOI Sample
50
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Percentages of Examined Form 1120 in SOI Sample( by Assets)
00066456252
00033164885
00061062697
00079995461
00067619875
00070701597
00130560248
00367407928
00380535914
00890518596
0082712561
00904712042
00855599773
00889504463
01638194021
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
examinationasset
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
examinationasset
Percentages of Examined Form 1120 in SOI Sample( by Assets)
Filing Method of Examined Form 1120
51
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Chart1
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and Examined Form 1120
[]
[]
[]
[]
0698007243
0301992757
079
021
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
filingsummary3
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
filingsummary3
E-filed
Paper Filed
E-filed and Paper Filed Form 1120X and Form 1120
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
E-filed
Paper Filed
E-filed and Paper Filed Form 1120 and 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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
Filing Method of Examined Form 1120
Conclusion
Conclusion
Conclusion
Slide Number 55
Overall Conclusions
Slide Number 57
Research Group Members
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
Division-wide Project
Project Motivation
Research Question
Presentation Outline
Slide Number 5
Previous Reports
Published Statistics
Amended Return (Form 1040X)
Form 1040X
Form 1040X
Form 1040X
Examined Return
Data
Results for Tax Year 2013
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Tax Adjustments for Tax Year 2013(Population Data from the Master File)
Effect on SOIrsquos Products
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Tax Adjustments for Tax Year 2013(Data from the Weighted SOI Sample)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Amended Return Filers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers(SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Profile of Examined Taxpayers (SOIrsquos Weighted Sample for Tax Year 2013)
Conclusions
Slide Number 27
Slide Number 28
Overview
Overview
Other Statistics
Research Focus
Slide Number 33
Filing and Processing Amendments
Filing and Processing Procedures
Matching Process
Preliminary Results
Comparison of Master File Population and SOI Sample
1120X Filing Dates Relative to the Original 1120 Filing
Industry Distribution of Corporations Amended for SOI year 2013
Industry Distribution of Corporations Amended for SOI year 2013
Asset Distribution of Corporations Amended for SOI year 2013
Study of Audits
Other Statistics on Examinations
Examination in Master File Level Population Data
Examination in SOI sample
Examination estimates from SOI Sample
Industry Distribution of Corporations Examined for SOI year 2013
Industry Distribution of Corporations Examined for SOI year 2013
Asset Distribution of Examined Form 1120 in SOI Sample
