Remember back to your school days when there were essays and projects themed around how you spent your summer? I was never one of the ones with the “coolest” or most fun summer, as I recall. But you may all be jealous of how we will spend some of our time this summer!
As mentioned previously, while we were waiting for Arizona to decide on conformity, there were federal law changes that we needed to implement.
To be considered for quicker refunds, some of these were under a specific time frame for filing, such as carryback of net operating losses, using a Form 1045 (individuals) or Form 1139 (corporations). During 2020, these carrybacks could be faxed directly to a special number set up by the Internal Revenue Service, which was, in theory, supposed to speed up the time for processing them, as opposed to mailing them to the Internal Revenue Service. Particularly since the mail at the Internal Revenue Service is not being processed very quickly – still.
But we could not prepare Arizona net operating loss carrybacks at the same time as the federal net operating loss carrybacks, because Arizona law did not allow for that. And, honestly, the tax buzz was that, because of precedent from the last time there was a large federal net operating loss carryback provision and no Arizona conformity on that, that Arizona would not conform this time, either. So much for tax buzz!
But now, a year later, we need to start preparing these Arizona net operating loss carrybacks for our clients, so that we can file them with Arizona and work on getting funds back for our clients related to these losses.
Luckily, we can scan our clients in our tax data base so that we do not miss out on any opportunities.
After we take a deep breath, and maybe an extra day or two off, we will start amending Arizona returns. So that is how we are spending our summer. But this time, we may get the award for “coolest”!
Please contact a Henry+Horne tax professional with any questions.
Donna H. Laubscher, CPA