Form 1139 (2011): Corporate Tentative Refund Application Checklist

Form 1139 (2011 Tax Year) — Checklist

Purpose and Filing Authority

Form 1139 permits corporations to request a tentative refund by carrying back net operating losses, net capital losses, or unused general business credits to preceding tax years. For 2011 tax year applications, the base erosion minimum tax does not apply because BEAT did not take effect until tax years beginning after December 31, 2017.

You must complete only standard income tax, alternative minimum tax, and personal holding company tax computations when filing for this tax year. The IRS will process your application within 90 days of the later of the complete application filing date or the last day of the month that includes the due date for filing the corporation's income tax return for the year in which the loss or credit arose.

Essential Preparation Requirements

The corporation's legal name, employer identification number, and date of incorporation must match all prior-year tax returns. A Tax Court petition for any carryback year prevents the filing from proceeding.

The filer must identify the specific reason for filing by completing line 1a for net operating loss, line 1b for net capital loss, line 1c for unused general business credit, or line 1d for other overpayment claims under section 1341(b)(1). Separate computation sheets for each claimed amount must accompany the tentative refund application.

Required Documentation Steps

1. Locate the tax return for the year in which the loss or credit arose and record the tax year ending date, filing date, and applicable IRS service center on lines 2a through 2c.
2. If an earlier carryback was filed for this same loss or credit, enter the ending date of that first carryback tax year on line 3 to prevent duplicate claims.
3. Answer line 4 regarding foreign tax credit release. If the answer is yes, file an amended return separately to carry back released foreign tax credits under IRC 904(c) provisions applicable in 2011.
4. Complete lines 5a and 5b if consolidated returns were filed or the corporation joined a consolidated group during any carryback year. Include the common parent name and employer identification number when applicable.
5. If Form 1138 was filed previously for an extension of time for payment of tax, provide the extension grant date on line 6b, the Form 1138 filing date on line 6c, and the unpaid tax amount on line 6d.
6. Document any accounting period changes on line 7 or the dissolution date on line 8 by attaching copies of IRS approval letters or state dissolution certificates as supporting evidence.

Capital Loss Carryback Rules for Corporations

Corporate capital losses can only offset capital gains and cannot reduce ordinary income. The capital loss carryback period for corporations is three years, and any remaining loss may be carried forward five years following the loss year.

Corporations must reduce the net capital loss deduction by the amount used in earlier years when carrying over the loss to later tax years. The IRS treats the carried-over capital loss as a short-term capital loss in each carryback or carryforward year.

Net Operating Loss Deduction Calculations

The corporation must complete the Computation of Decrease in Tax section by entering taxable income before and after carryback for each of the three preceding tax years in lines 11 through 15, columns a through f. For 2011 net operating losses, the carryback period is generally two years under IRC 172(b)(1)(A).

Small businesses meeting the gross receipts test under IRC 172(b)(1)(F) may elect to carry back losses for five years if their average annual gross receipts are $5 million or less for the three years preceding the loss year. Specified liability losses under IRC 172(b)(1)(C) may be carried back ten years, and farming losses may be carried back five years under separate provisions.

Tax Computation and Attachment Requirements

● The corporation must sum income tax from line 16, alternative minimum tax from line 17, and personal holding company tax from line 24 for each carryback year.
● Line 18 remains blank because the base erosion minimum tax does not apply to 2011 tax year filings.
● The total tax appears on line 26, and the decrease in tax appears on line 28.
● The application requires copies of the first two pages of the corporation's income tax return for the year of the loss or credit.
● All forms and schedules from which a carryback results, such as Schedule D or Form 3800, must accompany the application.
● Form 8886 must accompany the filing if the reportable transaction involving the loss or credit requires disclosure under IRC 6011.

Section 1341 Overpayment Claims

Section 1341(b)(1) overpayment claims apply only if the corporation excluded income in a prior year and the loss or deduction is subsequently allowed. The corporation must include a detailed computation of the adjustment on line 29 and reference the original year of exclusion in supporting documentation.

The computation must show how the overpayment arose from the claim of right adjustment. All worksheets used to calculate the amount entered on line 29 must accompany the filing.

Dissolved Corporation Filing Procedures

Dissolved corporations must include the dissolution date on line 8 of Form 1139. The tentative refund claim must be filed before the statute of limitations expires for the loss or credit year.

Post-dissolution claims require documentation of corporate representative authority to act on behalf of the dissolved entity. The authorized representative must demonstrate legal capacity to sign and file the application under applicable state law governing dissolved corporations.

Signature Requirements and Preparer Information

An officer of the corporation must sign Form 1139 under penalties of perjury and provide the officer's title and date of execution. If a paid preparer completes the form, the preparer must provide name, address, and date in the designated preparer section. The corporation may designate an attorney or authorized representative by attaching Form 2848 if the IRS needs to contact someone other than the signing officer.

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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.