IRS Unveils Consolidated Group Guidance on Five-Year NOL Carryback

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IRS issues guidance offering significant flexibility for consolidated groups in applying 2009 legislation that extended from two years to five years the ability to carry back net operating losses for most businesses. IRS says the proposed, temporary, and final regulations (REG-151605-09, T.D. 9490) not only help taxpayers within consolidated groups, but permit some acquiring groups to elect to waive all or a portion of the pre-acquistion carryback period for specific losses attributable to certain acquired members. Mark Silverman, Steptoe & Johnson, says the rules “give you the ability to evaluate and make a decision as to whether it makes more sense to carry a loss back or to carry it forward.” That approach “makes sense,” he says.