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Loss Carrybacks - Delinquent Corp Returns

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    Loss Carrybacks - Delinquent Corp Returns

    I think I saw this question before, but haven't been able to find the discussion. I'm simplifying the question to get to the point - numbers are much different than in my example.

    A corp has not filed its 2006, 2007, 2008, and 2009 returns.

    Years 2006-2008 showed net profit of $1,000 each year

    The 2009 year shows a net loss of $5.000.

    Can the entire set be submitted and the $3,000 of loss carrybacks netted out on the 2006-2008 returns, or must all returns be submitted as things were at the time, and then form 1120X filed for 2006-2008 after the 2009 return is processed?
    "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

    #2
    This seems like a very interesting question and I also would like to know the answer. Logic seems to be file as it was ...and then file as it is and amend, but that also sounds redundant.
    JG

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      #3
      It is strange, isn't it? I tried researching it, but there's very little guidance regarding what to do with delinquent returns, and even less regarding delinquent returns with NOL's in the later years. (Now that I've said that, somebody will probably zing me with an on-point cite. That's OK if there's one out there).

      If the original returns had been filed on time, then the losses wouldn't be known until the future rolled around. On the other hand, since the loss carrybacks are known in the present, it seems like a lot of extra work not to go ahead and account for them when the returns are filed. I guess part of the issue revolves around whether the FTF penalties are reversed when the NOL's are carried back (I don't know how that works either).

      Anyhow, I'll have some answers in the next few weeks. We filed the earlier years today. Will follow up with the NOL year in the next few days, then immediately do the amended returns. The client can't pay anything anyhow, so hopefully everything will catch up with itself before it goes into collection.

      Maybe we should have filed the NOL year first...
      Last edited by JohnH; 01-05-2011, 09:35 PM.
      "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

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