NOLs May Be Gold Mines for Creditor Recoveries
The Journal of Corporate Renewal
June 2011
This article discusses tax refunds based on net operating losses (NOLs) and tax liability, analyzing Bankruptcy Code section 505 and applicable case law. It explains Tax Code section 172 in the context of NOLs, and actions the IRS can take to recover erroneous refunds. The article reviews how Section 505(a)(2)(B) allows a debtor or trust to expeditiously determine its rights to tax refunds. Finally, it provides practice points on the recovery of tax funds under Section 505(a).