[Code of Federal Regulations]
[Title 26, Volume 18]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6501(m)-1]

[Page 369-370]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
                               Limitations
 
Sec. 301.6501(m)-1  Tentative carryback adjustment assessment period.

    (a) Period of limitation after tentative carryback adjustment. (1) 
Under section 6501(m), in a case where an amount has been applied, 
credited, or refunded under section 6411, by reason of a net operating 
loss carryback, a capital loss carryback, an investment credit 
carryback, or a work incentive program credit carryback to a prior 
taxable year, the period described in section 6501(a) of the Code for 
assessing a deficiency for such prior taxable year is extended to 
include the period described in section 6501 (h), (j), or (o), whichever 
is applicable; except that the amount which may be assessed solely by 
reason of section 6501(m) may not exceed the amount so applied, 
credited, or refunded under section 6411, reduced by any amount which 
may be assessed solely by reason of section 6501 (h), (j), or (o), as 
the case may be.
    (2) The application of this paragraph may be illustrated by the 
following example:

    Example. Assume that M Corporation, which claims an unused 
investment credit of $50,000 for the calendar year 1968, files an 
application under section 6411 of the Code for an adjustment of its tax 
for 1965, and receives a refund of $50,000 in 1969. In 1971, it is 
determined that the amount of the unused investment credit for 1968 is 
$30,000 rather than $50,000. Moreover, it is determined that M 
Corporation would have owed $40,000 of additional tax for 1965 if it had 
properly reported certain income which it failed to include in its 1965 
return. Assuming that M Corporation filed its 1968 return on March 15, 
1969, and that the 3-year period described in section 6501(a) has not 
been extended, the period prescribed in section 6501(j) for assessing 
the excessive amount refunded, $20,000 (i.e., $50,000, original amount 
refunded less $30,000, correct amount of unused investment credit), does 
not expire until March 15, 1972, and $20,000 may be assessed on or 
before such date under section 6501(j). Under section 6501(m), M 
Corporation may be assessed on or before March 15, 1972, an amount not 
in excess of $30,000 ($50,000, the amount refunded under section 6411, 
minus $20,000, the amount which may be assessed solely by reason of 
section 6501 (j)).


[[Page 370]]


    (b) Effective date. The provisions of paragraph (a) of this section 
apply only with respect to applications under section 6411 filed after 
November 2, 1966.

[T.D. 7301, 39 FR 975, Jan. 4, 1974]