Other Losses and Credits
Carrybacks and Carry Forwards
- This section provides carryback procedures for all personnel authorized to process carrybacks, regardless of their location. This section is divided into four major categories;
- General carryback rules and procedures
- Tentative (TENT) carryback refunds
- Restricted Interest (RINT) claims
- Taxpayers eligible for carrybacks are;
- Corporations (including certain insurance companies)
- Charitable and Exempt Organizations
- Carrybacks are filed on;
- Form 1045, Application for Tentative Refund (Individuals, Estates, and Trusts)
- Form 1139, Corporation Application for Tentative Refund
- Form 1040X, Amended U.S. Individual Income Tax Return
- Form 1120X, Amended U.S. Corporation Income Tax Return
- Form 1041, U.S. Income Tax Return for Estates and Trusts
- Form 1120-C, U.S. Income Tax Return for Cooperative Associations.
- Form 990-T, Exempt Organization Business Income Tax Return. Form 990-T carrybacks are processed at the Ogden Campus. See IRM 184.108.40.206.17, Exempt Organization Carrybacks Overview, for 990-T carryback processing.
Applications filed on Form 1045 and Form 1139 are referred to as TENTS. Form 1040X, Form 1120X, Form 1041, and other amended returns requesting carryback adjustments are referred to as RINTS.
Joint Committee Cases (JCC) must be expedited to Examination due to interest consideration, if the combined refund amount for IMF or any BMF non-C Corp is ≡ ≡ ≡ ≡ ≡ or more or the combined refund amount for a C Corp is ≡ ≡ ≡ ≡ ≡ ≡ ≡ or more. See IRM 220.127.116.11.33, Carryback Form 1045 and Form 1139 with Examination Criteria or an Open Underreporter (AUR or BUR) issue (TC 922 or TC 925), for TENTS. See IRM Exhibit 21.5.3-2, Examination Criteria (CAT-A) – General, for RINTS.
- A taxpayer who has an overpayment of tax as a result of a Net Operating Loss (NOL), Net Capital Loss (NCL), Unused Credits, or a Claim-of-Right adjustment can file an application or claim, also referred to as a TENT or RINT, for adjustment or refund. The tax year in which the loss occurred is the loss year. The tax year the loss is applied to is the gain year.
- Generally, IRS must pay interest if the carryback overpayment is not refunded within 45 days of the later of;
- The due date of the loss year return
- The received date of the delinquent loss year return
- The date the loss year return is filed in processible form
- The application or claim received date
- The application or claim processible date
See IRM 18.104.22.168, Determining the Overpayment Interest Period.
- A tentative refund (TENT) can be filed on Form 1045, Application for Tentative Refund or Form 1139, Corporation Application for Tentative Refund.
A Form 1045 can be filed by individuals, estates or trusts to apply for a quick tax refund resulting from;
- the carryback of a Net Operating Loss (NOL), (2 years back, 20 years forward)
- the carryback of unused general business credits, (1 year back, 20 years forward) (5 years back, 24 years forward)
- the carryback of a net section 1256 contract loss or (3 years back, unlimited years forward)
- for an overpayment of tax due to a claim of right adjustment under section 1341(b)(1) (5.6411-1)
A Form 1139 can be filed by businesses other than S corporations to apply for a quick tax refund resulting from;
- the carryback of a NOL or a loss from operations of a life insurance company, (2 years back, 20 years forward)
- the carryback of a Net Capital Loss (NCL), (3 years back, 5 years forward)
- the carryback of unused general business credits or (1 to 5 years back, 20 to 24 years forward)
- an overpayment of tax due to a claim of right adjustment under section 1341(b)(1) (5.6411-1)
TENTS must be filed within one year from the end of the loss year and include all necessary documentation to support the requested carryback loss. TENTS are subject to a 90-day statutory processing timeframe which begins when a complete and processible application was filed or the last day of the month that includes the due date (including extensions) for filing the income tax return for the year in which the loss or credit arose. For additional information on the processing of a TENT, see guidance in IRM 22.214.171.124.30, Carryback Form 1045 and Form 1139 Processing and Filing Requirements. through IRM 126.96.36.199.34, Reassessing Carryback Form 1045 and Form 1139.
- A restricted interest claim (RINT) for a carryback due to a NOL, NCL, unused general business credits, section 1256 contract losses or claim of right is filed on an amended return such as;
- Form 1040X, Amended U.S. Individual Income Tax Return,
- Form 1120X ,Amended U.S. Corporation Income Tax Return,
- amended Form 1041, U.S. Income Tax Return for Estates and Trusts,
- amended Form 1120-C, U.S. Income Tax Return for Cooperative Associations, or
- Form 990-T, Exempt Organization Business Income Tax Return
A RINT is not subject to the 90-day processing timeframe and must generally be filed within 3 years (10 years for carryback of foreign tax credit or deduction) after the due date of the return (including extensions) for the tax year of the NOL, NCL, or unused credit. For additional information on processing RINTS, see IRM 188.8.131.52.37, Carryback Form 1040X, Form 1120X, Form 1041, Form 1120-C and Form 990-T (RINTS) through IRM 184.108.40.206.43, Reassessing Carryback Form 1040X, Form 1120X, Form 1041, Form 1120-C, and Form 990-T, for additional information.
- For more detailed procedures on carrybacks, see;
- Net Operating Loss (NOL) – See IRM 220.127.116.11.14 Carryback Net Operating Loss (NOL)
- Unused credits – See IRM 18.104.22.168.6 Carryback Unused Credits
- Net Capital Loss (NCL) – See IRM 22.214.171.124.25 Net Capital Loss (NCL) – Individuals – Carryback/Carryforward Limitations and IRM 126.96.36.199.26 Net Capital Loss (NCL) – Corporations – Carryback/Carryforward Limitations
- Claim of Right – See IRM 188.8.131.52.27 Carryback “Claim of Right“
- Under the Taxpayer Relief Act (TPRA) of 1997, both business and individual credits can generally be carried back one year and forward 20 years (credits arising in taxable years beginning after December 31, 1997). Unused credits are the sum of certain credits exceeding tax liability in a year.
|1||Net operating loss (NOL) (Default)|
|2||Alternative minimum tax NOL (1120 only)|
|4||Alternative minimum tax contribution|
|6||Section 1231 loss|
|7||General business credit|
|8||Alternative minimum tax section 1231 loss|
|F||Foreign tax credit|
|FA||Alternative minimum tax foreign tax credit|
|M||Prior year minimum tax|
|AC||Net positive ACE adjustments from prior years|
|5A||Alternative minimum tax capital loss|