SECTION 3. ELECTIONS TO

DISREGARD CARES ACT AMENDMENTS

.01 Affirmative Election —(1) Over- view . A taxpayer with a Farming Loss NOL, other than a taxpayer making a Deemed Election described in section 2.03(3)(b) of this revenue procedure, may make an Affirmative Election under section 2303(e)(1) of the CARES Act if—

(a) the Farming Loss NOL arose in any taxable year of the taxpayer beginning in 2018, 2019, or 2020; and (b) the taxpayer satisfies all of the conditions described in section 3.01(2) of this revenue procedure.

(2) Time and manner for making an Af- firmative Election . To make a valid Affirmative Election under section 3.01(1) of this revenue procedure, a taxpayer must satisfy the following conditions:

Bulletin No. 2021–30 159 July 26, 2021

(a) Election deadline . The taxpayer must make the Affirmative Election on a statement described in section 3.01(2)(b) of this revenue procedure by the due date, including extensions of time, for filing the taxpayer’s Federal income tax return for the taxpayer’s first taxable year ending after December 27, 2020.

(b) Required statement . The taxpayer must attach a statement to the taxpayer’s Federal income tax return for the taxpayer’s first taxable year ending after December 27, 2020. The statement must provide in type or legible writing at the top of the statement the following: “The taxpayer elects under § 2303(e)(1) of the CARES Act and Revenue Procedure 2021-14 to disregard the amendments made by § 2303(a) of the CARES Act for taxable years beginning in 2018, 2019, and 2020, and the amendments made by § 2303(b) of the CARES Act that would otherwise apply to any net operating loss arising in any taxable year beginning in 2018, 2019, or 2020. The taxpayer incurred a Farming Loss NOL, as defined in section 1.01 of Revenue Procedure 2021-14 , in [list each applicable taxable year beginning in 2018, 2019, or 2020].” The taxpayer should also attach a copy of the statement to any original or amended Federal income tax return or application for tentative refund on which the taxpayer claims a deduction attributable to a two-year NOL carryback pursuant to the Affirmative Election.

.02 Deemed Election —(1) Overview . Except as provided in section 3.02(3) of this revenue procedure, a taxpayer is treated as having made a Deemed Election under section 2303(e)(1) of the CARES Act if the taxpayer, before December 27, 2020, filed one or more original or amended Federal income tax returns, or applications for tentative refund, that disregard the CARES Act Amendments with regard to a Farming Loss NOL.

(2) Special procedure for certain tax- payers whose two-year carryback claims filed before December 27, 2020 were re- jected . Some taxpayers may have had their two-year carryback claims, as reflected on their applications for tentative refund or claims for refund that were filed before December 27, 2020, rejected by the Internal Revenue Service (IRS). If such a taxpayer wants to continue to pursue those claims, the taxpayer should submit com

plete copies of their rejected applications or claims, including the original or amended Federal income tax returns for the taxable years in which the NOLs arose, in the manner set forth in this section 3.02(2), which will enable the IRS to review their cases as expeditiously as possible.

(a) The taxpayer should submit a complete copy of each rejected application for tentative refund or claim for refund based on a two-year carryback period, including the original or amended Federal income tax return for the taxable year in which the NOL arose, to the IRS Service Center at which the taxpayer previously filed the application or claim and return.

(b) The taxpayer should provide in type or legible writing at the top of the first page of a complete copy of each application or claim the following: “Deemed Election under section 3.02(2) of Revenue Procedure 2021-14.”

(c) The complete copy of each application or claim and return should be submitted on or before the due date, including extensions of time, for filing the taxpayer’s Federal income tax return for the taxpayer’s first taxable year ending after December 27, 2020.

(3) Exception to Deemed Election . A taxpayer will not be treated as having made a Deemed Election if, for each taxable year for which the taxpayer filed an original or amended Federal income tax return or an application for tentative refund that treated a Farming Loss NOL in a manner that disregards the CARES Act Amendments, the taxpayer subsequently files either an amended return by the due date, including extensions of time, for filing the taxpayer’s Federal income tax return for the taxpayer’s first taxable year ending after December 27, 2020, or an application for tentative refund within the required time for filing such an application and also by the due date, including extensions of time, for filing the taxpayer’s Federal income tax return for the taxpayer’s first taxable year ending after December 27, 2020, that properly reflects the treatment of each Farming Loss NOL under the CARES Act Amendments.

For example, a taxpayer who disregarded the CARES Act Amendments by using a 2-year carryback for the farming loss portion of the taxpayer’s only Farming Loss NOL and filed Forms 1120X for

the two carryback years, and who subsequently timely files a Form 1139 with a 5-year carryback that accounts for that Farming Loss NOL in a manner consistent with the CARES Act Amendments for each of the five carryback years, will not be treated as having made a Deemed Election. Similarly, a taxpayer who filed a Form 1139 prior to December 27, 2020, and disregarded the CARES Act Amendments by using a 2-year carryback for the farming loss portion of the taxpayer’s only Farming Loss NOL and subsequently timely files a Form 1139 with a 5-year carryback that accounts for that Farming Loss NOL in a manner consistent with the CARES Act for each of the five carryback years, will not be treated as having made a Deemed Election.