TRENTON, N.J., Sept. 2 -- Lucent Technologies filed a document with the Securities and Exchange Commission today stating the Internal Revenue Service has tentatively approved a claim for an $816 million federal income tax refund. The claim covers Lucent's 2001 fiscal year, when the company reported a net loss of $16.2 billion due the the telcommunications industry slump.
A carryover enables a company to take net operating losses from one fiscal year, carry them back to a prior, profitable year and deduct the losses from that year's profit to produce a tax refund for the earlier year. Lucent wanted to carry back its net operating loss from 2001 to its fiscal year 1996.
In the brief SEC report, Lucent said it filed a net operating loss carryback claim in September 2003 relating to the carryback of its fiscal year 2001 federal net operating loss to 1996, in which it filed its federal income tax return as part of the AT&T consolidated group.
"Under our tax sharing agreements with AT&T, any refund received by AT&T from the Internal Revenue Service as a result of that net operating loss carryback would be payable by AT&T to Lucent," it wrote in the filing. It said the IRS preliminarily allowed approximately $139 million of the refund claim. Lucent said it appealed and reached a tentative agreement Wednesday with the IRS that allows a carryback that will result in a cash refund of approximately $816 million.
An IRS audit will be needed for final approval by the agency and by the Congressional Joint Committee on Taxation. Lucent said it anticipates the refund, plus an undetermined amount of interest, will be received during its 2005 fiscal year.