An NOL is an overpayment, not a credit election

Plain-English summary

This Chief Counsel Advice addressed whether a net operating loss is a credit election and how to determine the payment date for interest on an overpayment resulting from an NOL. It stated that an NOL is an overpayment, not a credit election, and that IRC § 6611(f) controls. Under that provision, the payment is deemed not to have been made before the filing date for the taxable year in which the NOL arises. The Advice stated that the payment date would be the filing date for the relevant return.

Ruling snapshot

• Question: Is an NOL a credit election, and what payment date applies when determining interest on an NOL-related overpayment?
• Outcome: Advice given
• Key authorities: IRC § 6611(f)

Full text (IRS public release)

ID: CCA-626106-09 Number: 200936030
Release Date: 9/4/2009
Office: ------------------
UILC: 6513.03-00

From: --------------------
Sent: Friday 6/26/2009 1:06 PM
To: -------------------------
Cc: ----------------------------
Subject:Overpayment

Hi -------

I guess we have answered your first question in the negative. An NOL is not a credit elect. It is an overpayment. Section 6611(f) addresses overpayments resulting from NOLs. As to your question concerning the date of the payment, under section 6611(f), the date of the payment for purposes of determining interest on such payment is deemed not to have been made prior to the filing date for the taxable year in which the NOL arises. I believe the payment date would be the filing date for the ------- return. The year the NOL arises.]