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must first be carried back 3 years and then carried over 15
years.3 Sec. 172(b)(1)(A), (2), and (3). A taxpayer claiming an
NOL deduction for a taxable year must file with his return for
that year a concise statement setting forth the amount of the NOL
deduction claimed and all material and pertinent facts, including
a detailed schedule showing the computation of the NOL deduction.
Sec. 1.172-1(c), Income Tax Regs.
1. Petitioners’ Tax Returns Do Not Substantiate the
Claimed NOLs
A tax return is merely a statement of the taxpayer's claim
and does not establish the truth of the matters set forth
therein. Wilkinson v. Commissioner, 71 T.C. 633, 639 (1979).
Petitioner's 1994 through 1999 individual returns do not, by
themselves, substantiate the claimed NOLs. Furthermore,
petitioners did not provide the only tax return filed by the
partnership (for the taxable year ending in 1982), and
petitioners failed to provide their individual tax returns prior
to 1992, which are the years in which the net operating losses
were allegedly generated. Nor have petitioners provided the
Court with copies of tax returns filed by H & H Land Development
Corp. for any taxable year.
3 For 1998 and 1999, NOLs must be carried back 2 years and
then carried over 20 years.
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Last modified: May 25, 2011