Taxpayers can use net operating losses (NOLs) strategically to procure refunds or have a means for reducing taxable income going forward. The potential for dramatically higher tax rates in the future suggests that what was once an easy decision to seek a refund immediately may be a closer call if the "tax value" of NOLs increases in the future. This article lays out in plain English what are NOLs, how they benefit the taxpayer, and, most importantly, how an IRS auditor would determine if the NOL deduction is applied correctly.