Requirements For NOL Carryforward Utilization Surviving Scrutiny in IRS Examination

Joe and Mary operate a closely held business that generates a net operating loss in 2005 and 2007. The net operating loss from 2005 and 2007 are carried forward and are used to offset business income on Joe and Mary’s 2015 tax return. Joe and Mary’s 2015 tax return is selected by the IRS for examination. The first IRS information document request (“IDR”) includes a request for a copy of the 2005 and 2007 tax return, along with substantiation for the 2005 and 2007 loses. Do Joe and Mary have to comply with this request? General Statute of Limitations Generally, the statute of limitations for a tax return is three years from the date of filing the return or the date the tax return is [...]