Question: Your client self-prepared their 2019 and 2020 tax returns. Both 2019 and 2020 had a non-farming net operating loss (NOL). The client did not make an election to forgo the NOL carrybacks.
Since NOL carrybacks arising in 2019 and 2020 are subject to the five-year carryback rules, the NOL will be required to be carried back to 2014 and 2015 (respectively). For purposes of amending the returns to carry back the NOL, are 2014 and 2015 considered closed years?
Answer: No. For the purpose of carrying the NOL back, 2014 and 2015 are not considered closed years. Since 2019 and 2020 are within three years from when the tax return is due or, if later, two years from when a tax was paid, the statute of limitations for credit or refund under§6511 considers the NOL carryback years as open years [§ 6511(d)(2)(A)].
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