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return, respondent examined petitioners’ 1993 return and
disallowed the 1993 NOL, resulting in an income tax deficiency
for 1991 in the amount of the original $11,231 liability.
Discussion--Petitioners now claim that the election made on
their 1994 return not to carry their 1994 NOL back 3 years was
ambiguous and/or invalid. Section 172(a) permits the carryover
and carryback of NOL deductions. Section 172(b)(1)(A)(i)2
permitted the carryback of an NOL deduction to the preceding
3 taxable years. Taxpayers were also permitted to elect to waive
or relinquish the carryback deduction and only carry forward
their NOLs. See sec. 172(b)(3). The Secretary promulgated the
following regulation concerning taxpayers’ elections to waive NOL
carrybacks:
[The election] shall be made by a statement attached to
the return (or amended return) for the taxable year.
The statement required when making an election pursuant
to this section shall indicate the section under which
the election is being made and shall set forth
information to identify the election, the period for
which it applies, and the taxpayer’s basis or
entitlement for making the election.
Sec. 301.9100-12T(d), Temporary Proced. & Admin. Regs., 42 Fed.
Reg. 1470 (Jan. 7, 1977).
Petitioners’ statement on their 1994 return contains no
ambiguity about their intent to “relinquish the entire carryback
2 For purposes of this case involving a 1994 net operating
loss and a 1991 taxable year, we consider sec. 172(b)(1)(A)(i)
prior to its being amended by the Taxpayer Relief Act of 1997,
Pub. L. 105-34, sec. 1082(a)(1) and (2), 111 Stat. 950.
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