United States

Exempt organizations claim NOL carrybacks through amended Forms 990-T

TAX ALERT  | 

Exempt organizations have limited options for filing refund claims attributable to net operating loss (NOL) carrybacks and accelerating alternative minimum tax (AMT) credits because such claims must be paper filed on an amended Form 990-T, Exempt Organization Business Income Tax Return.

In a recently issued FAQ, the IRS authorized temporary procedures for processing quick refund claims on Forms 1139 and 1045, including submitting via fax, due to the closure of IRS processing centers during the COVID-19 pandemic. Read the RSM Tax Alert. However, the FAQ (Q&A 18) clarifies that exempt organizations may not use these procedures to submit refund claims associated with a previously filed Form 990-T. Instead, exempt organizations must paper file an amended Form 990-T and may attach Forms 1139 or 1045 to show the computation of the refund claim.

Although RSM strongly encourages taxpayers to electronically file all federal tax returns due to IRS facility closures, Forms 990-T have no e-file option available. As the IRS is currently unable to process paper returns, taxpayers paper filing any form with the IRS after March 26, 2020 should expect significant delays in processing. Therefore, taxpayers should consider whether to wait and paper file their returns on the earlier of the date the IRS announces reopening its service centers or the due date of the return. 

The IRS has asked taxpayers that have filed paper returns not to file a second return (either paper or electronic) and not to send correspondence inquiring about the status of a previously filed tax return. Paper returns will be processed once processing centers are able to reopen. 

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