OTHER NEWS
IRS extends net operationg loss carryback for small business

The Internal Revenue Service will allow small businesses with deductions exceeding their income in 2008 to use a new net operating loss tax provision to get a refund of taxes paid in prior years. To accommodate the change in tax law, the IRS has updated the instructions for two key forms (1045 and 1139), which small businesses can use to make use of the special carryback provision for tax year 2008. These forms are used to accelerate the payment of refunds.

The new provision, enacted as part of the American Recovery & Reinvestment Act, enables small businesses with a net operation loss (NOL) in 2008 to elect to offset this loss against income earned in up to five prior years. Typically, an NOL can be carried back for only two years. Some taxpayers must make the election to use this special carryback by April 17, 2009.

With the economic turndown and the new law, the IRS expects record numbers of small businesses to be eligible for the refunds. The IRS is putting in special steps to ensure timely processing of these refunds to help small businesses during this difficult period. Small businesses with large losses in 2008 may be able to benefit fully from those losses now, rather than waiting until claiming them on future tax returns.

Small businesses that file Form 1040 can also call 1-800-829-1040 with NOL questions. Corporations can contact 1-800-829-4933 with NOL questions. For more information, visit www.irs.gov.