On April 13, 2020, the IRS issued temporary procedures in the form of questions and answers for processing quick refund claims, Forms 1139 and 1045. The IRS modified the established filing procedures for Forms 1139 and 1045 in response to COVID-19 Pandemic. Such procedures will be in effect until further notice. Beginning on April 17, 2020, taxpayers will be able to submit Forms 1139 and 1045 to the IRS via fax.
Forms 1139 may be faxed to 844-249-6236 and eligible Forms 1045 may be faxed to 844-249-6237. These fax numbers will not be operational prior to April 17th and the IRS has expressed a distinct preference that taxpayers delay filing until the fax numbers are operational – rather than mail Forms 1139 and 1045 under established procedures. Such modification in submission procedures does not change how the claims for refund are processed and IRS will still have 90 days to process tentative refund claims.
Faxed submissions cannot exceed 100 pages. The IRS will contact taxpayers if additional documentation or information is needed to process eligible Forms 1139 or 1045.
Eligible Forms 1139 and 1045
Per Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the IRS will be accepting faxed transmission of:
- The Forms 1139 and 1045, for a net operating loss arising in 2018, 2019 or 2020 taxable year to carry that loss back to each of the five preceding years unless the taxpayer elects to waive or reduce the carryback; and
- The Forms 1139, filed by corporations, to either:
1. Accelerate recovery of AMT credits in 2019 from its 2021 tax year, or
2. Recover 100% of any remaining AMT credits in its 2018 tax year.
Please note that this procedure is not available for Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax – the due date of which has been postponed to July 15, 2020, from April 15, 2020. Such Forms must be paper-filed with the IRS.
Forms 1139 and 1045 can now be used to carryback an NOL to a section 965 year
The IRS specifically instructs taxpayers to disregard the instructions for Forms 1139 and 1045 that prohibit taxpayers from using either of these forms to carryback the NOLs to 965 years. The CARES Act provides that an NOL can be carried back to a 965 year only to reduce income in excess of the amount of the net section 965(a) inclusion. The IRS cautioned that it will issue additional guidance for taxpayers with outstanding section 965(h) net tax liabilities to be able to efficiently process such tentative refund claims and to avoid erroneous acceleration of deferred section 965(h) installment payments, delays in refunds or other processing complications.