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New FAQs on faxing refund claims, NOL carrybacks under CARES Act (COVID-19)

New FAQs on faxing refund claims, NOL carrybacks

The IRS today updated a set of “frequently asked questions” (FAQs) addressing how taxpayers can file applications for eligible refund claims related to the net operating loss (NOL) carryback provisions of the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) (Pub. L. No. 116-136).

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Measures included in the CARES Act provide that:

  • A taxpayer with an NOL arising in a 2018, 2019 or 2020 tax year can carry that loss back to each of the five preceding years unless the taxpayer elects to waive or reduce the carryback.
  • The modified credit rules for prior-year minimum tax liability of corporations—including to accelerate the recovery of remaining minimum tax credits of a corporation for its 2019 tax year from its 2021 tax year—allow a corporation to elect, instead, to recover 100% of any of its remaining minimum tax credits in its 2018 tax year. 

The IRS initially issued FAQs in April 2020 and then updated the FAQs on April 30, 2020. Read TaxNewsFlash

Read the FAQs (as updated June 29, 2020).

The IRS today added the following two new FAQs (text of the new FAQs is provided below):


19. Does the extension granted by Notice 2020-26 apply to consolidated groups?

Yes. (added June 29, 2020)
 

20. If the last date to file my Form 1139/1045 was extended six months under Notice 2020-26, and the extended due date is a date on or after April 1, 2020, and before July 15, 2020, will I also receive relief under Notice 2020-23?

Yes.  Notice 2020-26 granted a six-month extension to file Form 1139 or Form 1045 with respect to the carryback of a net operating loss that arose in any taxable year that began during calendar year 2018 and that ended on or before June 30, 2019.  If a taxpayer, including a taxpayer that filed a consolidated return and/or had a short tax year for the applicable loss year, satisfies the requirements of Notice 2020-26, the taxpayer will have 18 months rather than the normal 12 months, after the end of the loss year, to file Form 1139 or Form 1045.  Notice 2020-23 granted affected taxpayers until July 15, 2020, to perform specified time-sensitive actions, including filing Forms 1139 and 1045.  Under Notice 2020-23, a taxpayer filing a Form 1139 or Form 1045 which is due on or after April 1, 2020, and before July 15, 2020, including as a result of the relief provided in Notice 2020-26, is an affected taxpayer performing a specified time-sensitive action, and will have until July 15, 2020, to file the relevant form. (added June 29, 2020)

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