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CARES Act NOLs carryback

Forum|Forum|14 days ago
June 21, 2026
8 replies
148 views

Dear tax community members, I have a big question.

I have a new client who has over $105K NOLs from 2019 & 2020 that his CPA failed to carryback under CARES Act. The client could really use it to offset taxes from prior years. Based on his 2020 tax return, the NOLs were carried forward - there was no 1045 with that return - does that mean the CPA elected to waive carrying back the NOLs? If so can the election be revoked?

I plan to amend his 2014 - 2018 returns to claim the NOLs and amend 2019- 2020 returns to carry them back. By domino effect, it would offset a pending $35K tax liability from a previous year and trigger a refund For what I read, time has expired to use 1045 , but F1045- Schd B (p.4) should be used to amend 2020 and carryback the NOLs, do you agree?

I intend to prepare a nice paper package for the IRS with cover letter and calculation summary, and copies of all the tax returns with matching amended returns … with a bow on it. Are there other forms I should include beside those I mentioned ?

Thank you for your time and input!

DGEmbry

Lacerte Tax

Best answer by TaxGuyBill

Are you SURE the carryback was not used in either year? Form 1045 can be a separately filed form.

In order to waive the carryback, there must be a statement with the tax return that specifically says the carryback is being waived. If there isn’t a statement, then the NOL must be carried back. However, be aware that the 2019 carryback wavier statement could be on EITHER the 2019 return OR the 2020 return.

Yes, if you amend the prior years to use the carryback NOLs, you include Schedule B of Form 1045 to show the carryback calculations.

T

TaxGuyBillAnswer

Level 15

Are you SURE the carryback was not used in either year? Form 1045 can be a separately filed form.

In order to waive the carryback, there must be a statement with the tax return that specifically says the carryback is being waived. If there isn’t a statement, then the NOL must be carried back. However, be aware that the 2019 carryback wavier statement could be on EITHER the 2019 return OR the 2020 return.

Yes, if you amend the prior years to use the carryback NOLs, you include Schedule B of Form 1045 to show the carryback calculations.

D

DGEmbryAuthor

Level 4

Hi TaxGuyBill

Thank you very much for your reply.

Yes I am sure the NOLs were not carried back but carried over. For what I read, F1045, Schedule A is to carryback the NOLs and F1045, Schedule B is to calculate the remainder to be carried over. I thought to understand that both of those schedules A & B have to be filed with each year’s return being amended?

Thank you for pointing out that to waive the carryback there would be a statement with the tax return saying so. I did not find such statement with his 2019 or 2020 returns.

BobKamman

Level 15

But the statute of limitations has expired for 2019 and 2020. That means the carrybacks expired, unless tax is still owed or recently paid. All of the years since 2020 have losses, there was no carryover required for any of them?

D

DGEmbryAuthor

Level 4

Hi BobKamman,

Thank you for your reply. The statute of limitation has been a big question, but because it reads “generally you have to file within 3 years...” I thinking of calling this an exceptional matter not a general one. I decided to meet in person with the IRS to clarify the whole situation.

BobKamman

Level 15

"Statutes of limitation sought to be applied to bar rights of the Government, must receive a strict construction in favor of the Government." (The Supreme Court has been saying that since a 1924 tax decision.)

Some high-priced lawyers got egg on their face this month by claiming in Tax Court pleadings that the opposite is the case. You can read about it here (see the response also).

https://taishofflaw.com/2026/06/12/ai-ai-ai-ai/

D

DGEmbryAuthor

Level 4

Thank you for the link to the case, I will read it.

But how does claiming carryback NOLs that the tax payer is entitled to and that his CPA failed to claim “bar rights of the Gov.” ?

D

DGEmbryAuthor

Level 4

Bob,

To your question, 2021-2022 has losses, 2023 has $0 taxable income and I’ll be amending 2024. The client self prepared 2023-2024 not understanding he had NOLs that could be carried back and carried over.

PS I’ve tried to post this a few times unsuccessfully, I have it will work this time.

BobKamman

Level 15

The government has the right to deny a claim that is barred by the statute of limitations. Such statutes are construed in favor of the government, not the taxpayer. The “generally” means that the statute may be open if the taxes are still owed, or have been paid in the last two years. I think you’re SOL on the SOL issue, but may have a claim against the CPA who didn’t follow the law -- although the SOL under state law may have expired on that, also.

D

DGEmbryAuthor

Level 4

Right SOL are in favor of the government not the taxpayer. The client has yet to find an attorney that wants to take his case. BTW he still owes taxes for 2018, do you think that could make a difference? Also, I could not see the article with the link you posted.

BobKamman

Level 15

I think you might have a case for using up some of the otherwise-expired NOL to eliminate the 2018 balance due -- I’d have to do some more research to figure out how that works when the year from which the NOL arose is closed.

The link works for me, it’s probably not worth the trip anyway.

D

DGEmbryAuthor

Level 4

That would be great news for my client if we could argue that the SOL is still open as there’s unpaid tax! I appreciate anything else you know or find about it.

The link works, but I end up on taishoff law page where there is a couple of short paragraph about the case with page number references but no link to read further.

Thank you !

But the statute of limitations has expired for 2019 and 2020. That means the carrybacks expired, unless tax is still owed or recently paid. All of the years since 2020 have losses, there was no carryover required for any of them?

"Statutes of limitation sought to be applied to bar rights of the Government, must receive a strict construction in favor of the Government." (The Supreme Court has been saying that since a 1924 tax decision.)

Some high-priced lawyers got egg on their face this month by claiming in Tax Court pleadings that the opposite is the case. You can read about it here (see the response also).

https://taishofflaw.com/2026/06/12/ai-ai-ai-ai/

I think you might have a case for using up some of the otherwise-expired NOL to eliminate the 2018 balance due -- I’d have to do some more research to figure out how that works when the year from which the NOL arose is closed.

The link works for me, it’s probably not worth the trip anyway.

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