Frequently Asked Questions
Who is eligible for the Extended Refund Period for Loss Carrybacks?
Taxpayers with net operating losses or net capital losses that are eligible for carryback to prior taxable years.
How does the Extended Refund Period for Loss Carrybacks work?
Provides a special 3-year window from the due date of the return for the year the loss was generated (rather than the year the tax was paid) to claim a refund based on NOL or capital loss carrybacks.
What law authorizes the Extended Refund Period for Loss Carrybacks?
The Extended Refund Period for Loss Carrybacks is authorized under IRC §6511(d)(2) of the Internal Revenue Code (Title 26, United States Code).
Statutory Text — IRC §6511
Source: Internal Revenue Code, Title 26, United States Code
§ 6511. Limitations on credit or refund(a) Period of limitation on filing claimClaim for credit or refund of an overpayment of any tax imposed by this title in respect of which tax the taxpayer is required to file a return shall be filed by the taxpayer within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later, or if no return was filed by the taxpayer, within 2 years from the time the tax was paid. Claim for credit or refund of an overpayment of any tax imposed by this title which is required to be paid by means of a stamp shall be filed by the taxpayer within 3 years from the time the tax was paid.
(b) Limitation on allowance of credits and refunds(1) Filing of claim within prescribed periodNo credit or refund shall be allowed or made after the expiration of the period of limitation prescribed in subsection (a) for the filing of a claim for credit or refund, unless a claim for credit or refund is filed by the taxpayer within such period.
(2) Limit on amount of credit or refund(A) Limit where claim filed within 3-year periodIf the claim was filed by the taxpayer during the 3-year period prescribed in subsection (a), the amount of the credit or refund shall not exceed the portion of the tax paid within the period, immediately preceding the filing of the claim, equal to 3 years plus the period of any extension of time for filing the return. If the tax was required to be paid by means of a stamp, the amount of the credit or refund shall not exceed the portion of the tax paid within the 3 years immediately preceding the filing of the claim.
(B) Limit where claim not filed within 3-year periodIf the claim was not filed within such 3-year period, the amount of the credit or refund shall not exceed the portion of the tax paid during the 2 years immediately preceding the filing of the claim.
(C) Limit if no claim filedIf no claim was filed, the credit or refund shall not exceed the amount which would be allowable under subparagraph (A) or (B), as the case may be, if claim was filed on the date the credit or refund is allowed.
(c) Special rules applicable in case of extension of time by agreementIf an agreement under the provisions of section 6501(c)(4) extending the period for assessment of a tax imposed by this title is made within the period prescribed in subsection (a) for the filing of a claim for credit or refund—(1) Time for filing claimThe period for filing claim for credit or refund or for making credit or refund if no claim is filed, provided in subsections (a) and (b)(1), shall not expire prior to 6 months after the expiration of the period within which an assessment may be made pursuant to the agreement or any extension thereof under section 6501(c)(4).
Showing first 3,000 characters of full section text.