NOL Carryforward Fails Without Adequate Proof

A CPA and her husband claimed a substantial net operating loss (NOL) carryforward, but a federal appeals court denied the write-off. According to the court, she didn’t establish the existence of the NOLs nor whether the carryforwards had been absorbed in intervening years from the year they allegedly arose to the year being audited. The fact that the IRS didn’t disallow carryforwards in other years is not controlling. And reliance on their own income tax returns is not substantiation. #IdeaoftheDay

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