My new client has an NOL on their 2008 tax return, which was filed in 2010. There as no statement that they were foregoing the carryback and instead, electing to carry forward. Besides, since the return was late filed. They did not have the right to carry forward. Additionally, the 2006 and 2007 years are, to my understanding, closed years. Meaning they cannot be amended to get any refunds. However, had they carried back they would have used some of the NOL up, but would have ended up not using the entire NOL and they would be entitled to carry the unused amounts forward to 2009 and 2010, etc.

How should I address this situation? File amended returns for 2006 & 2007, and let the IRS deny the claims, but then carry the unused amounts forward to 2009 and forward ? Or, what is the best way to handle this situation? They will lose a considerably amount of their NOL to 2006 & 2007, if they must first carry back and apply the NOL to those years.

Thanks for any suggestions, or recommendations.