Category: Individuals; Tax Returns, Examinations &
IRS Procedures
Subject: Statute of Limitations
Title: NOL Carryback Claim, Time Limitation for Filing
IRC Sections: 6511(d)(2)(A)
Filename: 1263.html
Date Produced: 08/95 Copyright 1998, The Tax Resource Group. All rights reserved. Telephone
800-578-3498. Internet: www.taxresourcegroup.com Background
Very recently, an individual taxpayer filed his 1992 Form 1040 including
a Schedule C reporting a large loss. The loss creates a personal net operating
loss. The taxpayer is desirous of carrying back the NOL to tax years 1989
through 1991. Issue
Since the original return (1992) was filed late and the normal three-year
statute of limitations with respect to the carryback years (1989 through
1991) has expired, what if any losses can be carried back? Answer
The net operating loss generated in 1992 can be carried back to 1989 through
1991 provided a claim for refund (Form 1040X) is filed on or before the
date three years after the filing deadline (including extensions) for the
return of the loss year. Discussion
Section 6511(d)(2)(A) overrides the normal three-year statute of limitations
if a claim for credit or refund is the result of a net operating loss or
capital loss carryback. Instead, a valid claim for refund can be filed at
any time prior to three years after the filing deadline (including extensions)
for the year in which the loss arose. In this case, the taxpayer has until April 15, 1996 to file carryback
claims resulting from a net operating loss generated in calendar 1992. | 
