In a recent ABA webinar including IRS representatives, new practical information related to the carryback provisions in the recently passed CARES Act emerged. Here’s a quick update.

The CARES Act represents an effort by Congress and the U.S. Department of Treasury to make available additional cash flow and ensure liquidity. The Act’s carryback provision temporarily repeals the 80% of taxable income limitation on using the net operating loss (NOL) carryovers that the 2017 TCJA imposed. Specifically, for a taxable year beginning before Jan. 1, 2021, a taxpayer can fully offset taxable income in that year with NOLs from prior taxable years. Also, taxpayers may carry back NOLs arising in 2018, 2019, and 2020 to their prior five taxable years. (This is the Tax Code § 172 provision.) Speakers noted that, if you are thinking of carrying back five years to offset prior income and get a refund, you may also have to amend state tax filings.

A key question has been how quickly taxpayers could monetize their losses and get refunds.

In the April 14, 2020, webinar 2020 Tax Filing, Payment, and Refund Deadlines, we learned that, beginning April 17, taxpayers may fax certain tentative carryback applications to the IRS (there’s a 100-page limit).

There are two forms, Form 1045 and Form 1139 (available on the IRS website).

The fax number for Form 1045 is 844-249-6237.

The fax number for Form 1139 is 844-249-6236.

Only claims allowed under the Act’s sections 2303 and 2305 may use this procedure (Minimum Tax Credit refunds and 2018, 2019, or 2020 NOL Carrybacks).

Also, the IRS has set up a COVID-19 disaster relief hot line. If you have a question, docket attorneys will call back. The general number is 202-317-5436.

Things are happening fast. Know that the IRS website is being constantly updated, sometimes more than once a day. Check there for the latest notices, guidance, and other news at irs.gov/coronavirus.