Case: U.S. Tax Court Upholds Separate Carryback Elections for Tax Losses (T.C. Memo)

The U.S. Tax Court held that the taxpayer was permitted to relinquish the carryback period for its standard net operating loss while retaining the 10-year carryback for its specified liability loss. Taxpayer, an oil and gas company, reported net operating losses and specified liability losses for 2016 and 2017. It elected to waive the carryback period for its standard net operating losses, but carried back its specified liability losses 10 years. The IRS disallowed the specified liability loss carrybacks, arguing that the taxpayer’s election waived all carryback periods. However, the court held that IRC §172(b)(1) establishes distinct carryback periods for ...