What is a Consolidated Tax Return?
Consolidated tax returns are a means of allowing corporations that are all part of an affiliated group to file one return for the annual period, rather than each entity filing a separate tax return. The ability to file a consolidated tax return depends on the exact nature of the connection between the parent organization and any subsidiaries that make up the group. Along with simplifying the tax reporting process, the filing of a consolidated tax return sometimes makes it possible for conglomerates and other affiliated groups to take advantage of certain tax breaks that would not be possible with individual filings. The history of the consolidated tax return in the United States goes back to the early 20th century. During this period, the government sought ways to limit corporations from avoiding the payment of taxes by shift what were thought to be excess profits from one highly profitable subsidiary to another member of the corporate family that was operating at a small profit or eve
