On April 15, 2022, I mailed my (late) 2018 return that has a NOL. Of course, it was due on April 15, 2019, and was exactly 3 years late. I did not make any elections regarding the NOL on the return. (I think I was too late to even consider any of the NOL elections.)
It appears I am too late to request a refund of prior years using the NOL. I think those refund requests would have been due also by April 15, 2022.
But, if the NOL is carried back, I wouldn't even be requesting a refund. I'd be reducing outstanding tax owed. I don't think the period of asking for a refund within 3 years of the 2018 return due date has any bearing on reducing outstanding tax owed - just asking for refunds.
So, is the NOL carried back? If so, to which year?
NOL carrybacks used to be 2 years, but the TCJA eliminated that, leaving them to only be carried forward. But, the CARES act has provisions for it temporarily being 5 years. However, the 2021 Pub 536 states: "The special rules in section 172 permitting 5-year carrybacks for 2018, 2019, and 2020 net operating losses (NOLs) added by the... CARES ACT... have expired. Generally, you can only carry NOLs arising in tax years ending after 2020 to a later year." The easy part is the last sentence -- since my NOL arised in tax year 2018, that sentence doesn't apply. The first sentence saying the 5 year carryback rules have expired is what I'm not sure about. Did filing my 2018 return so late mean that I automatically lost the 5 year carryback, and the only choice I now have is to carry it foward? Or, is this sentence in the 2021 Pub 536 just to highlight that there's no more carrybacks starting with 2021 returns -- and is it not saying that the 5 year period has expired, even if you're late filing a 2018 return?
If my 2018 carryback isn't "expired", then I assume it gets carried back to 2013, and forward until used? There's no way to just carry it back 2 years to 2016, like used to be allowed? (Carrying back to 2016 would be my preference, but I think if there was any way to do that instead of 2013 that it would require an election that I'm too late to file.)
Once I know the answer to this question, I'll ask another about the mechanics of lowering outstanding tax owed. There's some details on that I'll get into on another post, so we can leave that for later.
