IRS Form 1139 (2014)— Corporation Application for Tentative
What IRS Form 1139 (2014) Is For
IRS Form 1139 (2014) is a corporation application used by companies to request a tentative refund or quick refund of previously paid income tax. It allows corporations that experience a net operating loss, net capital loss, or unused general business credit to recover overpayments by carrying losses back to earlier taxable years. This form provides a faster alternative to filing an amended tax return, allowing businesses to enhance their cash flow without waiting for extended IRS processing times. Taxpayers can visit the IRS website for additional information, instructions, and filing tools.
Corporations and small businesses generally file Form 1139 to offset taxable income from prior years and reduce total taxes owed under different tax rates. The process benefits companies that pay taxes at higher rates in earlier years and now qualify for refunds at a lower tax rate. Eligible claims include proper adjustments, deductions, and other adjustments related to business transactions, investments, and financing activities. Filing this form enables corporations to recover excess payments efficiently while remaining compliant with federal tax law and maintaining accurate account reconciliation.
When You’d Use Form 1139
Corporations use Form 1139 when they want to claim a quick refund for taxes previously paid after reporting a net operating loss, a net capital loss, or an unused general business credit. The form enables businesses to recover overpaid income tax by carrying back losses or credits to earlier years. It must be filed within twelve months after the end of the tax year in which the loss occurred, and only after the corporation’s tax return for that year has been filed. Using this form can help corporations and small businesses maintain steady cash flow and benefit from lower tax rates applied to earlier taxable income.
Key Rules or Details for 2014
For the 2014 tax year, corporations could carry back a net operating loss up to two years or carry it forward up to twenty years. Special rules allowed longer carrybacks for farming losses, specified liabilities, and disaster-related deductions. Businesses also had the option to waive the carryback and instead apply future offsets at a lower tax rate. Corporations had to ensure all computations, credits, and proper adjustments complied with IRS regulations to avoid delays or disallowance.
Step-by-Step (High Level)
Step 1: Confirm Eligibility and Calculate Losses or Credits
The corporation should confirm that it has a qualifying net operating loss, net capital loss, unused general business credit, or proper adjustment before filing its tax return. The amount should be accurately calculated from the corporation’s tax return.
Step 2: File the Corporate Tax Return for the Loss Year
The loss-year tax return must be filed before or at the same time as Form 1139. The IRS will not process the application without this return.
Step 3: Prepare Supporting Documentation
Attach the following materials to Form 1139:
- The first two pages of the corporate income tax return for the loss year
- All schedules or forms related to the loss or credit, such as Schedule D or Form 3800
- Any election statements or proper adjustment forms
- Form 8886, if applicable
- Refigured schedules for each carryback year
- Form 8302 if any refund exceeds $1 million
Step 4: Complete and File Form 1139
The form should be carefully reviewed for accuracy. A corporate officer must sign and date it. The completed form must be mailed separately to the IRS Service Center where the corporation typically files its tax return.
Step 5: Wait for IRS Processing
The IRS generally processes Form 1139 within 90 days of receipt, assuming all required information and attachments are complete and accurate.
Learn more about federal tax filing through our IRS Form Help Center.
Common Mistakes and How to Avoid Them
Many tentative refund applications are delayed or rejected due to avoidable filing errors. Corporations can prevent issues by taking care to avoid the following mistakes:
- Filing before submitting the corporate tax return: Always file the corporate income tax return for the loss year before submitting Form 1139.
- Omitting key attachments or schedules: Include all required statements, worksheets, and supporting documentation to prevent processing delays.
- Miscalculating taxable income or carryback amounts: Review all figures carefully to ensure accurate and consistent calculations across tax years.
- Treating the tentative refund as final: Please note that the refund is subject to later IRS review or audit and may be adjusted accordingly.
- Filing after the 12-month deadline: Submit Form 1139 within 12 months of the end of the loss year; late claims must use Form 1120X instead.
Businesses should verify every computation, ensure consistent data across all forms, and maintain proper documentation in case of future IRS review.
What Happens After You File
Once Form 1139 is filed, the IRS reviews the corporation’s application to confirm accuracy, eligibility, and completeness. If all required schedules, forms, and attachments are correct, the IRS issues a tentative refund—typically within ninety days. Refunds are sent by check or direct deposit. For large refunds, a Form 8302 is required for electronic payment. If errors or inconsistencies are found, the IRS may request clarification or disallow the claim, and corporations must respond promptly to avoid delays or penalties.
FAQs
What is IRS Form 1139 (2014) used for?
IRS Form 1139 (2014) is a corporation application that allows businesses to request a tentative refund or quick refund for overpaid income tax. It applies when corporations experience a net operating loss, unused general business credit, or a proper adjustment.
Who can file Form 1139, and under what circumstances?
Corporations, not individuals or S corporations, may file Form 1139 within twelve months after the end of the tax year in which the loss or credit occurred. The tax return for that year must be filed before submitting the form.
How does Form 1139 differ from Form 1120X?
Form 1139 offers a faster refund process, usually within ninety days, while Form 1120X requires a more extended review period. Both apply to income tax, but Form 1139 provides only a tentative refund that remains subject to later IRS review.
Can small businesses benefit from using Form 1139?
Yes, small corporations that pay taxes and experience a net capital loss or unused business credit may be eligible for a faster refund. Using the form can improve cash flow and reduce financing costs during challenging business periods.
What are the common errors when filing Form 1139?
Common errors include filing before completing the corporate tax return, omitting schedules, or miscalculating taxable income. Incorrect carryback amounts and late filings can often delay refunds and may result in penalties or additional correspondence from the IRS.
Are tentative refunds final once issued?
No, a tentative refund is considered temporary. The IRS may later review the corporation’s tax return, business credit, or adjustment calculations and require repayment with interest if an overpayment or incorrect deduction is discovered.
Where can taxpayers find additional information?
Taxpayers and corporations can visit the IRS website to download the form, review instructions, or confirm filing addresses. The site offers relevant tools, examples, and data to help understand carrybacks, deductions, and tax rate calculations for the 2014 tax year.
