Companies can shift 2020 losses to previous years as far back as 2015 under a provision of the Coronavirus Aid, Relief and Economic Security Act
, and as corporate profits tanked due to the novel coronavirus pandemic, refund filings are expected to explode. By law, the IRS must provide details about refunds of more than $5 million to the JCT, which some feared could create a bottleneck and slow down the process.However, the agency has set up an electronic system with the congressional committee and doesn't expect delays, said Nikole Flax, deputy commissioner of the IRS Large Business and International division, during a webinar hosted by Miller & Chevalier Chtd.
"That should not be a significant delay in this process," Flax said. "We work with them electronically, so we don't have the need to push files, etc., so that review should be smooth and have mechanisms in place to work through issues that they may have."
Aware of the urgency for many companies awaiting refunds, Flax said that the IRS is "trying to find the right balance, having the right enforcement review of these claims," while also moving them along swiftly.
"We've been doing a lot of preliminary work right now, so that we are ready, because we are expecting a high volume," she said.
Flax added that the division is hoping to become fully operational despite remote working, which included beginning new examinations in mid-July. The agency had announced a pause on exams of new returns in April.
"We really are trying to be fully functional at LB&I, working in a digital environment," she said. "So we continue to talk to taxpayers and groups to hear their perspective on where we need additional flexibilities, and what we need to do to be really sustainable in the future, as we know we could be in this posture for some time."
The IRS did not return requests for further comment.
--Editing by Neil Cohen.
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