Last week the IRS issued guidance providing tax relief under the CARES Act for taxpayers with net operating losses.

COVID Relief for taxpayers claiming NOLs

Revenue Procedure 2020-24 (PDF) 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 net operating loss 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, and
• 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.

Six-month extension of time for filing NOL forms

In Notice 2020-26 (PDF), the IRS grants a six-month extension of time to file Form 1045 or Form 1139, as applicable, with respect to the carryback of a net operating loss that arose in any taxable year that began during the calendar year of 2018 and that ended on or before June 30, 2019.