Tax News

CCH (cch.taxgroup.com) reports:

Temporary, proposed and final regulations have been issued relating to the computation and allowance of the tentative carryback and refund adjustment under Code Sec. 6411. Pursuant to Code Sec. 6411, a corporation (other than an S corporation) that has an overpayment of tax as a result of a net operating loss, capital loss, business and research credits or a claim-of-right adjustment can file an application on Form 1139 for a tentative adjustment or refund of taxes for a year affected by the carryback of such loss, credit or adjustment. A noncorporate taxpayer can apply for similar adjustments on Form 1045, except that there is no capital loss carryback for individual or fiduciary taxpayers.
Temporary Regulations
The temporary regulations clarify that the IRS will not consider disputed amounts when computing the tentative carryback allowance. On the other hand, the IRS may credit or reduce the tentative adjustment by any assessed tax liabilities or unassessed tax liabilities determined in a deficiency notice (see Rev. Rul. 2007-51, TAXDAY, 2007/08/27, I.5), unassessed liabilities identified in a proof of claim filed in a bankruptcy proceeding (see Rev. Rul. 2007-52, TAXDAY, 2007/08/27, I.6), and other unassessed liabilities in rare and unusual circumstances.
CCH Comment. The IRS plans to adopt procedures that will require the National Office to review, prior to a credit or reduction of the tentative adjustment by an unassessed liability, under "rare and unusual circumstance."
Final Regulations
Final regulations were revised to remove all references to IRS district directors and service center directors. These positions were eliminated as a result of the IRS reorganization implemented pursuant to the IRS Reform and Restructuring Act of 1998.
Proposed Regulations
The text of the temporary regulations also serves as the text of the proposed regulations. Written and electronic comments and requests for a public hearing on the proposed regulations must be received by November 26, 2007.
Revenue Ruling Revoked
Rev. Rul. 78-369, 1978-2 CB 324, has been revoked. The IRS has determined that it was inconsistent with these regulations.
Rev. Rul. 2007-53, 2007FED ¶46,600
T.D. 9355, 2007FED ¶47,065
Proposed Regulations, NPRM REG-118886-06, 2007FED ¶49,761
Other References:
Code Sec. 6411
CCH Reference - 2007FED ¶38,723
CCH Reference - 2007FED ¶38,723D
CCH Reference - 2007FED ¶38,724
CCH Reference - 2007FED ¶38,724D
Tax Research Consultant
CCH Reference - TRC IRS: 30,122.20