Magazine article The CPA Journal

Bad Results If You're in Bad Form!

Magazine article The CPA Journal

Bad Results If You're in Bad Form!

Article excerpt

The taxpayer wanted to make a "split election," that is, elect to forego the three-year carryback period for his net operating loss (NOL), but actually carryback his alternative minimum tax (AMT) net operating loss. He filed an application for a Tentative Refund on Form 1045 the same day he filed the Form 1040 giving rise to the net operating losses. The Form 1045 contained a hand-written note that he was making the split election. And the IRS processed the Form 1045, presenting the taxpayer with a check for over $950,000.

There was just one problem. Split elections don't work. To make matters worse, on the Form 1040, the taxpayer had not indicated he was making a split election. Instead, he elected to forego the carryback period for both the regular NOL and the AMT NOL. Upon examination, the IRS realized the refund had been improperly made and assessed additional tax.

The taxpayer petitioned the Tax Court, arguing that if a spit election does not work, his election must have been invalid. He, therefore, should have been able to carryback both the NOL and the AMT NOL. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.