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July 10, 2023

IRS releases final regulations on carrybacks of consolidated NOLs

The IRS has issued final regulations (TD 9977) permitting consolidated groups that acquire members of another consolidated group to waive, on a tax-year-by-tax-year basis, all or a portion of the carryback period for consolidated net operating losses (CNOLs) attributable to an acquired member for pre-acquisition years during which the acquired member was a member of a former consolidated group. The final regulations apply to CNOLs arising in a tax year ending after July 2, 2020, but can be applied to any CNOLs arising in a tax year beginning after December 31, 2017. The final regulations mostly adopt the proposed regulations (Tax Alert 2020-1775) and remove the temporary regulations (Tax Alert 2020-1745). A Tax Alert is forthcoming.

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor