The IRS has announced that it will shortly issue guidance on how to cash in on the new law. In the past, companies have collected NOL refunds in one of two ways. The quickest way has been to file a "tentative" claim with the IRS, when the agency rules that it's appropriate. (It made such a ruling in the wake of the September 11 attacks.) Such a claim typically takes six weeks to process. After a tentative claim is filed, the IRS may review the underlying facts and law to make sure the refund was properly calculated. Alternatively, a corporation could file an amended return for the earlier year, the processing of which takes longer than a tentative claim.
Any refund that exceeds $2 million is automatically reviewed by the Joint Committee on Taxation, says PwC's Poplock. And while that may seem like it could cause a delay in the refund process, that's not the case, notes Poplock, who points out that the IRS will issue refunds prior to such reviews under expedited claim procedures. "The fact that the IRS has acknowledged the need for procedural guidance within two or three days after enactment is a very good sign" that it will act quickly on the refund mechanism, adds Culp.
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