Why would irs not accept the reduction of self employment taxes for a schedule c operating loss carryback

[CS]

My client had an operating schedule c loss in 2017 which we carried back to 2015.

The IRS accepted everything other than the resultant reduction of self employment taxes of that same business in 2015.

The tax line agent could not help so I have manually resubmitted the 2015 returns with a cover letter explaining my position.No word yet.

Chris Smallman

[TaxGuyBill · Accepted solution]

A Net Operating Loss only reduces Income tax on the amended return, not Self Employment tax.

Sorry, there is nothing you can do because there is nothing in the law that allows a NOL to reduce SE tax.

[abctax55]

An observation... a Sch C loss does not necessarily create a NOL.  You have to look at the entire return.