The IRS will soon allow businesses to file via fax Forms 1139 and 1045 specifically related to certain coronavirus relief, a senior IRS official said on April 13. To that end, the IRS on the same day unveiled its related filing procedures for claiming quick refunds of the credit for prior year minimum tax liability of corporations and net operating loss (NOL) deductions.
Forms 1139, 1045
“Starting on April 17, 2020, and until further notice, the IRS will accept eligible refund claims Form 1139 submitted via Fax to 844-249-6236 and eligible refund claims Form 1045 submitted via fax to 844-249-6237,” the IRS noted in the Coronavirus Tax Relief FAQ posted on its website on April 13. “Before then, these fax numbers will not be operational. We encourage taxpayers to wait until this procedure is available rather than mail their Forms 1139 and 1045 since mail processing is being impacted by the emergency.”
In a tailored effort to implement sections 2303 and 2305 under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (P.L. 116-136), the IRS, until further notice, is working toward opening digital transmission of Form 1139 and Form 1045. Most notably, only refund claims made under the CARES Act sections 2303 and 2305 are eligible for the temporary procedures.
IRS Accepting Yet Not Processing Mail
Similarly, Sunita Lough, deputy commissioner for services and enforcement at the IRS urged taxpayers and practitioners during an April 13 Tax Policy Center (TPC) webinar not to submit Forms 1139 and 1045 related to the CARES Act by mail. Ordinarily, Form 1139 is required to be submitted by paper in the mail.
However, the IRS is currently receiving so much mail that the U.S. Post Office can no longer hold it, according to Lough, adding that the IRS is “literally holding [mail] in trailers until employees can get back to work.” Thus, in an effort to “send a signal” that the IRS will implement the CARES Act without access to its mail, it is both allowing and encouraging the fax option, Lough said.
Generally, under the CARES Act:
- section 2303 requires that taxpayers with an NOL arising in a 2018, 2019, or 2020 taxable year to carry that loss back to each of the five preceding years unless the taxpayer elects to waive or reduce the carryback; and
- section 2305 modifies the credit for prior-year minimum tax liability of corporations, including to accelerate the recovery of remaining minimum tax credits of a corporation for its 2019 taxable year from its 2021 taxable year and to permit a corporation to elect instead to recover 100 percent of any of its remaining minimum tax credits in its 2018 taxable year.
“Only fax Forms 1139 and 1045 specific to the CARES Act,” Lough said, while adding that any other forms submitted via fax, even Forms 1139 and 1045 unrelated to the CARES Act, will not be processed.
“If you are trying to decide between filing Form 1139 and 1120X, it is usually best to file Form 1139 to get a refund,” Kirsten Wielobob, principal, Tax Policy and Controversy, Ernst & Young LLP, said on April 10. “It is colloquially referred to as a ‘quickie refund,’” Wielobob said. Generally, the Form 1139 is not subject to joint committee review as the Form 1120X is, which can be filed electronically but can add a layer of complexity. Additionally, Wielobob cautioned that the delays at the IRS could mean filing Form 1139 by paper through the mail is no longer the “quick” option, which appears in line with both the IRS’s cautioning against submitting the form by mail and the agency’s newly announced fax option.
By Jessica Jeane, J.D. – Senior News Editor and Content Management Analyst
Wolters Kluwer is by your side to help you stay up-to-date with tax and compliance changes and support your ability to work remotely. Please visit our Coronavirus (COVID-19) Resource Page for Tax & Accounting Professionals.