Congress’s investigative arm, the General Accountability Office, urged lawmakers Wednesday to close loopholes on significantly undervalued assets in individual retirement accounts.

The GAO also called on the Internal Revenue Service to better curb the improper build up of some mega IRAs that are costing the government money and giving unfair retirement savings advantages to the wealthy. The issue of outsized IRAs got national attention during the 2012 presidential campaign, when Republican nominee Mitt Romney reported an IRA worth $20 million to $102 million. The GAO outlined the problems in its preliminary report released two months ago.

Sometimes entrepreneurs, hedge funds and other investors put nonpublicly traded shares of new companies artificially valued at less than one cent into IRAs, the GAO noted. This tactic can significantly increase their tax breaks when the worth of the businesses soar.

Another group of large IRA account holders with unfair advantages, said GAO, are key employees of hedge funds who get a share of the profits from performance fees paid by outside investors -- known as “carried interest.”

To rein in the voluminous IRA tax breaks unavailable to the vast majority of retirement savers, GAO said Congress should consider imposing limits on the type of assets permitted in IRAs, the minimum valuation for an asset purchased by an IRA, and the amount of assets that can be accumulated in IRAs and employer sponsored plans that get preferential tax treatment.

In addition, GAO researchers said they want the IRS to spend more money to scrutinize IRA contributions higher and asset valuations lower than current laws and rules permit.