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cash-back deposits, which we doubt, respondent would not be
precluded from raising the issue, especially when he relies on
petitioner's own testimony.
In sum, we hold that respondent may amend the answer to
raise the issue. Furthermore, the evidence clearly established
that the gross receipts from the bank deposit analysis for 1986
were understated by $5,713.
Net Operating Loss (NOL) Carryover from 1984
Petitioner contends that he is entitled to deductions for
the taxable years after 1985 for NOL carryovers from the 1984
taxable year. Section 172(a) allows a deduction for an NOL
carryover to a taxable year plus an NOL carryback to that year.
For the years before the Court, an NOL would be carried back for
3 years and carried over for 15 years.13 A taxpayer can,
however, elect to relinquish the carryback period. Such an
election must be made by the due date for filing the taxpayer's
return for the taxable year of the NOL for which the election is
to be in effect, in a manner prescribed by the Secretary. Sec.
172(b)(3)(C). Such an election:
shall be made by a statement attached to the
return (or amended return) for the taxable
13 Before 1986, an NOL could be carried over for 5 years.
Sec. 172(b)(1)(B). Sec. 1009(c)(3) of the Technical and
Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat.
3342, 3449, extended the carryover period for NOL's for losses
occurring after Dec. 31, 1975, to 15 years.
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