John Dundon Blog

John Dundon Blog

Cost Basis

Date: 10/3/2008

Author: John Dundon

In 2006, the investigative arm of Congress, the General Accounting Office (GAO), estimated that 38 percent of all reported capital gains are erroneous. This was also verified by the work of the IRS in conjunction where 46,000 random taxpayers were audited. Net Basis was used to verify reported cost basis information on the Schedules D for the 2001 National Research Program Random Study. Hundreds of thousands of investment transactions were processed through the NetBasis system. NetBasis not only identified a significant number of Schedules D that yielded improper reporting, but it also identified $11 billion dollars in under reported capital gains taxes, which was then included in the 2006 Tax Gap Report.”

Full Article