The Internal Revenue Service (IRS) issued guidance on April 9, 2020, providing tax relief under the Coronavirus Aid, Relief, and Economic Security (CARES) Act for taxpayers with net operating losses (NOLs). Rev. Proc. 2020-24 provides guidance to taxpayers with net operating losses that are carried back under the CARES Act by providing procedures for:

  • Waiving the carryback period in the case of a NOL arising in a taxable year beginning after Dec. 31, 2017, and before Jan. 1, 2021.
  • Disregarding certain amounts of foreign income subject to transition tax that would normally have been included as income during the five-year carryback period.
  • Waiving a carryback period, reducing a carryback period, or revoking an election to waive a carryback period for a taxable year that began before Jan. 1, 2018, and ended after Dec. 31, 2017.

In Notice 2020-26, the IRS also grants a six-month extension for individuals, estates, trusts and corporations to file with respect to the carryback of a net operating loss that arose in any taxable year that began during calendar year 2018 and ended on or before June 30, 2019.

The IRS also recently issued Rev. Proc. 2020-23, allowing eligible partnerships to file amended partnership returns to take advantage of the CARES Act legislation.

For more information on CARES Act tax legislation or for assistance with amending your returns, contact Doeren Mayhew’s tax advisors today.