michaelmars Posted March 2, 2011 Report Share Posted March 2, 2011 i'll try to simplify this. 2009 nol was being carried to 2010 of $500,000. 2010 loss before nol of $1,000,000. client audited for 2008 and owes $3,000,000. Using form 1138 i can extend the assessment period of the irs due to an expected carryback. Now the issue is: what is my carryback? I know the $1,000,000 can be carried back but what about the $500,000 from 2009 which was previously elected to be carried to 2010. can that now be included in the carryback to 2008? Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 2, 2011 Report Share Posted March 2, 2011 Assuming the auditor is both competent and at least somewhat reasonable, I'd discuss this with him as to how he'd like you to handle it. He may be able to make the carryback part of the audit results. And even if he decides to first audit the 09 and 10 before allowing the carryback to be part of the calculation, in the long run this will help the client and be the fastest way to get him a final determination of what he actually owes. At worst, he should be able to advise on how they want to deal with the carryback. Quote Link to comment Share on other sites More sharing options...
michaelmars Posted March 2, 2011 Author Report Share Posted March 2, 2011 the agent isn't helpfull, and although i simplified it, there is more to the story, possibly RICO. The agent asked for the form to make it part of the audit but thats it. Also the form instructions say, you can only file it to halt an assessment for the immediately preceeding year so this shouldn't even apply yet she asked for it. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 2, 2011 Report Share Posted March 2, 2011 OK, that changes the picture, then. Sounds like the t/p should by this time have hired an attorney, and you should be consulting with the attorney on what he wants you to file. If RICO is even a POSSIBILITY, your client should be talking with an experienced tax attorney by now. RICO penalties are TRIPLE whatever would otherwise be owed. As for the carryback amount, use the NOL worksheet to determine the amount, it's a very good tool for that. And the worksheets can be printed out to use as supporting attachments. Quote Link to comment Share on other sites More sharing options...
michaelmars Posted March 2, 2011 Author Report Share Posted March 2, 2011 the nol schedules don't address this, this is a very specific form. and the question is can you carryback a loss if you previously elected to forgo the carryback. I think i can amend the year to cancel the election but not sure. Quote Link to comment Share on other sites More sharing options...
grandmabee Posted March 2, 2011 Report Share Posted March 2, 2011 I don't think you can change the election once made. but if 2010 is a loss then you carry that loss back. Quote Link to comment Share on other sites More sharing options...
michaelmars Posted March 2, 2011 Author Report Share Posted March 2, 2011 I don't think you can change the election once made. but if 2010 is a loss then you carry that loss back. thanks, i am ok with 2010 loss the question is 2009, also, besided the carryback the issue is also if 2010 can be used to halt the collection of 2008 since the form talks about halting only the immediate prior year. If thats the case then the agent shouldn't even be asking for this form. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 3, 2011 Report Share Posted March 3, 2011 If she's going to allow the extension if you give her the form, I sure would not tell her that it does not apply. LOL Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.