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IRS Issues Guidance for Electing Expanded Carryback of 2008 or 2009 Net Operating Losses

With its passage of the Worker, Homeownership, and Business Assistance Act of 2009 (the Act) earlier this month, Congress expanded a provision of the Internal Revenue Code that allows taxpayers to carry back net operating losses (NOLs) to offset taxable income from prior years. Under the new rules, which were discussed in our previous Client Alert, a taxpayer may elect to carry back NOLs arising in 2008 or 2009 (an applicable NOL) for up to five years. On November 20, 2009, the IRS issued Revenue Procedure 2009-52 (the IRS Guidance) to provide guidance for taxpayers choosing to make such an election; this alert details the key components of such guidance.

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