CCH (http://tax.cchgroup.com/) reports:

The IRS is preparing to process an expected surge in refund requests resulting from the enhanced net operating loss (NOL) carryback in the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) (2009 Recovery Act), Linda E. Stiff, deputy commissioner (Services and Enforcement) said on March 30. Stiff also reported that the White House and the Treasury Department are strongly supporting the Service’s international tax enforcement activities. Stiff spoke at the 59th Midyear Conference of the Tax Executives Institute in Washington, D.C.

NOLs

The 2009 Recovery Act allows eligible small businesses to carry back NOLs three, four or five years. An eligible small business must have an average of less than $15 million in gross receipts over a three-year period ending with the year giving rise to the loss. If gross receipts average more than $15 million over the three-year period, the normal two-year NOL carryback applies.

Like other incentives in the 2009 Recovery Act, the extended NOL carryback is temporary. The special treatment applies to NOLs for any tax year beginning or ending in 2009. Earlier this month, the IRS issued guidance on the extended carryback (IR-2009-26, Rev. Proc. 2009-19; TAXDAY, 2009/03/17, I.2). At that time, the IRS predicted many struggling small businesses would file quickly for refunds based on past profitable years. “We have taken steps to ’staff-up’ these claims to meet any surge in volume,” Stiff said.

In related news, Stiff said that corporate tax receipts are expected to plummet in 2009 because of the recession. Stiff quoted a Congressional Budget Office (CBO) report that predicted corporate income tax receipts will shrink $87 billion in 2009.

International Enforcement

Stiff reported that the IRS is getting “strong and tangible” support from the White House and the Treasury Department for international tax enforcement. Most recently, the IRS announced a voluntary settlement initiative for taxpayers with undisclosed foreign accounts (TAXDAY, 2009/03/27, I.1). Although Stiff issued the memorandum to IRS employees describing the settlement program, she did not provide any more details about the initiative.

COBRA Subsidy

Dislocated workers may be eligible for premium assistance to continue health care coverage under COBRA. The IRS has posted questions and answers about the subsidy on its web site, Stiff reported. Stiff said that the IRS intends to administer the COBRA subsidy so that the “nation’s unemployed do not become the nation’s uninsured.”

Many employee benefits specialists, employers and plans are waiting for the agency to issue guidance on the definition of involuntary termination (TAXDAY, 2009/03/25, I.2). An individual must be involuntarily terminated from employment to qualify for the COBRA subsidy. Stiff did not indicate when guidance will be issued.

New Hires

Finally, Stiff reported that the Service is going on a hiring spree. The IRS is recruiting more than 3,500 front-line personnel for enforcement activities. More than 700 new positions will be dedicated to international tax issues, Stiff said.

By George L. Yaksick, Jr., CCH News Staff

More Tax Help, IRS News and Tax Relief Tips:

1. Obama Proposes Doubling Tax Law Enforcement Budget and Seeks $400 Million Funding Boost for IRS Enforcement Activities

Tags: 2009 recovery act, Cobra Subsidy, IRS enforcement, Michael Rozbruch, net operating loss carryback, NOL carryback, tax enforcement, tax expert, tax help, Tax Refunds

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