In one of his letters, Nichols questions a finding in the report that an estimated 68% of S corp returns filed for tax years 2003 and 2004 misreported at least one item affecting net income. From that and other data, the report deduces long-standing problems with S corp tax compliance. Nichols says that conclusion seems unwarranted.
GAO official Timothy P. Bowling, in a letter published last month in the trade publication Tax Notes, says the agency stands behind its "objective and fact-based work."
Whether due to numerous small errors or fewer large errors, "the $85 billion net misreporting of income for the 2003 and 2004 period suggests to us consequential noncompliance that, if possible, should be cost-effectively addressed," Bowling wrote.
The GAO could not immediately be reached for comment for this article.
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