(1) This transmits revised IRM 21.5.9, Account Resolution, Carrybacks.
(1) The following table outlines changes made to IRM 21.5.9 regarding Carryback processing.
| IRM Subsection | Description |
|---|---|
| IRM 21.5.9.1 | Updated organizational title Wage and Investment (W&I) to Taxpayer Services (TS). Clarified Policy and Procedures BMF is the program owner of the procedures in this IRM section. |
| IRM 21.5.9.1.1(2) | Added Inflation Reduction Act of 2022 to bullet list. |
| IRM 21.5.9.1.4(2) | Corrected title of IRM 21.10.1, Embedded Quality (EQ) Program for Accounts Management, Campus Collection, Campus Examination, Field Assistance, Tax Exempt/Government Entities, Return Integrity and Compliance Services (RICS), and Electronic Products and Services Support. |
| IRM 21.5.9.1.5(2) | Corrected title of IRM 21.10.1, Embedded Quality (EQ) Program for Accounts Management, Campus Collection, Campus Examination, Field Assistance, Tax Exempt/Government Entities, Return Integrity and Compliance Services (RICS), and Electronic Products and Services Support. |
| IRM 21.5.9.2 | Removed link to IRM 21.5.9.5.16.4.1, Carryback Application with an Open IMF/BMF Underreporter Issue (TC 922 or TC 925) and added a link to IRM 21.5.9.5.16.4, Carryback Application with Examination Criteria. Added title to IRM reference 21.5.9.5.10.3, Tax Cuts and Jobs Act (TCJA) of 2017 (P.L. 115-97), Sections Affecting Net Operating Losses. Editorial changes for clarity. |
| IRM 21.5.9.2.1 | Added new subsection that provides guidance for identifying carryback applications and claims. Included instructions for determining the correct carryback category code and priority code. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.2.2 | Added new subsection that provides guidance for identifying carryforward claims worked by the carryback teams and elections to forgo or waive the carryback period. Included examples of common carryforward issues that are processed following normal procedures. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.3.2 | Corrected the title of IRM 13.1.7.2, Introduction to TAS Case Criteria. Updated CIS to CII. |
| IRM 21.5.9.4.1(1)(e) | Corrected IRM references linking to statute of limitations information. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.4.2 | Corrected IRM title for IRM 21.5.1.4.2.3, Clerical Function for the Image Control Team (ICT) Correspondence Imaging Inventory (CII) and corrected IRM reference linking to statute of limitations information. Other editorial changes. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.4.3(2) | Added a note to refer to IRM 21.5.9.5.16.6, Carryback Tentative Refund Applications and Statute Consideration, to resolve tentative refund applications where the period of limitation for credit or refund based on the loss year is imminent (180 days or less) or expired. Changed CIS to CII where needed. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.4.7 | Removed link to IRM 21.5.9.5.16.4.1, Carryback Application with an Open IMF/BMF Underreporter Issue (TC 922 or TC 925) and added a link to IRM 21.5.9.5.16.4, Carryback Application with Examination Criteria. Changed CIS to CII where needed. Editorial changes where needed. |
| IRM 21.5.9.5 | Removed link to IRM 21.5.9.5.16.4.1, Carryback Application with an Open IMF/BMF Underreporter Issue (TC 922 or TC 925) and added a link to IRM 21.5.9.5.16.4, Carryback Application with Examination Criteria. Editorial changes to increase clarity. |
| IRM 21.5.9.5.1(8)Note | Removed paragraph 8 Note. Manual refund monitoring is now done by Accounts Management Headquarters. |
| IRM 21.5.9.5.1.1(10) | Updated link to irs.gov information for modernized e-File for businesses. |
| IRM 21.5.9.5.1.2(2) | Added a reminder to follow RINT/IRNT processing guidelines for MEFC and MEFR cases. IPU 24U0606 dated 5/6/2024. |
| IRM 21.5.9.5.2(1) | Added clarification that a taxpayer may revoke an election to forgo the carryback period on a superseding return. Added a reminder to release the -A freeze if appropriate. IPU 23U1143 dated 12/1/2023. |
| IRM 21.5.9.5.3 | Added special carryback/carryforward period for IRC 6417(b) unused general business credits. Included a reference to IRM 21.7.4.4.8.3.1.1, Carryforward of Investment Credit, which contains additional guidance for Form 3468, Investment Credit, carryforward requests. Clarified the carryback periods for farming losses affected by legislative changes. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.5.4 | Revised table for Section 508 compliance. Updated tax years in short year example. |
| IRM 21.5.9.5.5(1) | Added clarification that the AGI should not be adjusted for any year in the carryback period where no NOL can be absorbed. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.5.6(1) | Added a reminder to use the appropriate Hold Code to hold the credit when multiple adjustments are required and a manual refund will be issued. IPU 23U1143 dated 12/1/2023. |
| IRM 21.5.9.5.6(1) | Added a note explaining Recovery Rebate Credit changes require a separate adjustment. Added a link to Document 6209 Hold Code guidance. IPU 24U0606 dated 5/6/2024. |
| IRM 21.5.9.5.6(2) | Corrected the IRM number and title to IRM 25.6.1.10.3.1.7, Offsetting the Amount of a Refund with a Timely Refund Claim with a Time-barred Adjustment. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.5.6.2(3) | Clarified that under IRC 39(a), unused general business credits must be carried back one year. Explained that taxpayers cannot elect to forgo the required carryback period. |
| IRM 21.5.9.5.6.2(5) | Added SB (IMF) and updated SBSE HQ Reserved referral guidance. IPU 24U0606 dated 5/6/2024. |
| IRM 21.5.9.5.6.4(6) | Corrected the link to additional information for IRC 965 transition tax procedures. |
| IRM 21.5.9.5.7(5) | Added new paragraph 5 containing guidance for systemic refunds with manual interest calculations. Subsequent paragraphs renumbered. Editorial changes to clarify section content. IPU 24U0606 dated 5/6/2024. |
| IRM 21.5.9.5.8 | Added link to IRM 21.4.4.5.2(7), Preparation of the Form 3753, Manual Refund Posting Voucher, for manual refunds of 50 million and 500 million or more. Reorganized IRM content. IPU 24U0606 dated 5/6/2024. |
| IRM 21.5.9.5.8.1(2) | Corrected IRM number and title to IRM 20.2.4.10, Special Overpayment Interest Rules for Corporations. |
| IRM 21.5.9.5.10 | Removed reference to IRC 199A(g) in paragraph 3. IRC 199A(g) applies to taxpayers other than corporations. Corrected link to Form 1120-H, U.S. Income Tax Return for Homeowners Associations. Clarified that the CARES Act changed the carryback provisions of the TCJA for tax years beginning in 2018, 2019, and 2020. |
| IRM 21.5.9.5.10.3.8(4) | Paragraph 4 CAUTION example updated to reflect tax years subject to TCJA procedures. |
| IRM 21.5.9.5.10.4(7) | New paragraph 7 adds clarification that the manual refund should be issued in the name of the taxpayer that filed the carryback claim. Explained that a brief justification is required in the Remarks section of the manual refund form when the name or address differs from the information on Master File. Subsequent paragraph renumbered. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.5.10.6(1) | Clarified language describing the Net Operating Loss Deduction (NOLD). |
| IRM 21.5.9.5.10.8.1(1) | Clarified the 80 percent limitation applies to the NOL deduction allowed. |
| IRM 21.5.9.5.10.8.3(2) | Corrected link to Form 461, Limitation on Business Losses. |
| IRM 21.5.9.5.10.8.7(5) | Clarified the CARES Act Section 2305 provision affecting the corporate Alternative Minimum Tax (MTC) credit. |
| IRM 21.5.9.5.12(2) | Added reference to 6417(b) credits. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.5.12.2(1) | Clarified unused general business credits are carried to the first preceding tax year before being carried forward. Added carryback/carryforward periods for unused credits for oil and gas production from marginal wells and IRC 6417(b) credits. Included a link to IRM 21.5.9.5.3, Special Carryback/Carryforward Periods, which lists each specific credit. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.5.12.3 | Removed paragraph 2 NOTE and relocated the content to paragraphs 3 and 4. Added information about the period of limitation for credit or refund for general business credits released by the carryback of an NOL or NCL to new paragraph 3. Included transaction code and interest computation date instructions for adjustments, added a reminder of the mandatory carryback period of one year under IRC 39(a), and added an example. Added a link to IRM 21.5.9.5.7, Carryback Interest, to new paragraph 4. Subsequent paragraphs renumbered. Clarified the start of the carryforward period for released business credits. Specified that the period of limitation for credit or refund is governed by the year of the NOL or NCL that caused the release of the credit. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.5.12.4 | Corrected titles of linked IRM references where needed. |
| IRM 21.5.9.5.12.4 | Added a note to paragraph 2 explaining Recovery Rebate Credit changes require a separate adjustment and inserted a link to IRM 21.5.9.5.6, Multiple Adjustments. Inserted a link in paragraph 5 to IRM 21.5.9.5.7(5), Carryback Interest, which contains guidance for systemic refunds with manual interest calculations. IPU 24U0606 dated 5/6/2024. |
| IRM 21.5.9.5.12.7(3) | Corrected IRM reference linking to statute of limitations information for Foreign Tax Credit. |
| IRM 21.5.9.5.14(1) | Removed reference to Form 1139 per Form 1139 instructions. Tax-exempt organizations claiming a refund of taxes reported on Form 990-T are not eligible to file Form 1139. |
| IRM 21.5.9.5.15(2) | Corrected title of IRM 21.6.6.2.10, Claim of Right - IRC 1341, Repayment of Income Previously Reported. |
| IRM 21.5.9.5.16.1 | Added new paragraph 4 clarifying that a tentative refund application may be rejected, in whole or in part, if there are any material omissions, math errors that cannot be corrected within the 90-day period, or the application includes a released credit required to be filed on Form 1040-X or Form 1120-X. Updated paragraph 5 explaining if the application is not processable it must be rejected and the taxpayer must file an amended return to claim the carryback before the period of limitations expires. Subsequent paragraphs renumbered. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.5.16.3 | Added TCB date and Interest computation date clarifications. Added a reminder to paragraph 1 that interest must be manually computed if a systemic refund will be issued and the loss year return was not timely filed or additional refundable credits are allowed. Inserted a link to IRM 21.5.9.5.7(5), Carryback Interest, which contains guidance for systemic refunds with manual interest calculations. Added a note to the top of the If/And/Then table clarifying references to the loss year return due date and removed information from the table relocated to paragraph 1. Added a link for IRM 20.2.4.8.1, Systemic Refunds, to paragraph 3. IPU 24U0606 dated 5/6/2024. |
| IRM 21.5.9.5.16.4 | Clarified that an application for tentative refund is not treated as a claim for credit or refund. Removed reference to IRM 21.5.3-2 in paragraph 2 and updated Examination referral criteria for carryback applications. Removed paragraph 5 which contained guidance to forward subsidiary applications to the campus where the parent corporation filed their return. Subsequent paragraphs renumbered. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.5.16.6 | Added new IRM subsection that provides guidance for resolving tentative refund applications where the period of limitation for credit or refund based on the loss year is imminent (180 days or less) or expired. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.5.17.3 | Added TCB date and Interest computation date clarifications. Added a reminder to paragraph 1 that interest must be manually computed if a systemic refund will be issued and the loss year return was not timely filed or additional refundable credits are allowed. Inserted a link to IRM 21.5.9.5.7(5), Carryback Interest, which contains guidance for systemic refunds with manual interest calculations. Added a note to the top of the If/And/Then table clarifying references to the loss year return due date and removed information from the table relocated to paragraph 1. Added a link for IRM 20.2.4.8.1, Systemic Refunds, to paragraph 3. IPU 24U0606 dated 5/6/2024. |
| IRM 21.5.9.5.17.3 | Removed references to application and replaced with claim. Removed caution for claims received prior to the due date of the loss year return. Updated the received date in the first example demonstrating procedures for determining the interest start date for a late filed loss year return. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.5.17.5 | Corrected IRM references linking to statute of limitations information. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.5.20.1(3) | Corrected title to IRM 21.7.9.4.1.1, Transcript (TRNS) 193 Involving Reprocessing Returns. |
| IRM 21.5.9.5.20.2 | Corrected IRM references linking to Business Master File (BMF) Identity theft information. |
| IRM 21.5.9.5.20.3 | Specified which carryback letter to issue for TENTs and RINTs. Added language to the open paragraph for carryback applications that clarifies if the application is not resubmitted within one year from the end of the loss year, an amended return must be filed to claim the carryback. Removed broken link to RICS Fraud Referral Program and updated the link to the IRM reference containing FRP Point of Contact Information. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9.5.20.4 | Specified which carryback letter to issue for TENTs and RINTs. Added language to the open paragraph for carryback applications that clarifies if the application is not resubmitted within one year from the end of the loss year, an amended return must be filed to claim the carryback. Corrected titles to linked IRM references where needed. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9-1 | Added carryback/carryforward periods for IRC 6417(b) credits and included a link to IRM 21.5.9.5.3, Special Carryback/Carryforward Periods, which lists each specific credit. Corrected the link to the instructions for Form 3800, General Business Credit. Specified which issues should be reassigned to the Carryback team. IPU 24U0877 dated 7/29/2024. |
| IRM 21.5.9-1 | Added a link to IRM 21.5.9.5.12.7, Carryback of Excess Foreign Tax Credit (FTC). Added information for Form 5695 Part I, Residential Clean Energy Credit. IPU 23U1143 dated 12/1/2023. |
| Throughout the IRM | Reviewed and updated IRM references as necessary. Changed CIS to CII where possible. Replaced references to the IRS as the Service with the acronym IRS. Made editorial-type changes where needed. IPU 23U1143 dated 12/1/2023, IPU 24U0606 dated 5/6/2024, and IPU 24U0877 dated 7/29/2024. Revised throughout to update organizational title Wage and Investment (W&I) to Taxpayer Services (TS). Made editorial-type changes where needed. |
IRM 21.5.9, dated 8-21-2023 (effective 10-01-2023) is superseded. The following IRM Procedural Updates (IPUs) have been incorporated into this IRM: 23U1143 issued December 1, 2023, IPU 24U0606 issued May 6, 2024, and IPU 24U0877 dated July 29, 2024.
LuCinda Comegys
Director, Accounts Management
Taxpayer Services Division