NOL - C Corp - Could it be disallowed??

[miatax]

I have another client who has a huge NOL carryover that is to expire in 2007. That return has been on extension but it lapsed. Now that I am helping him gather all the information to file 2007 and 2008 (which also had an extension) could IRS disallow NOL for exceeding the extension?

I haven't found any information on that, but I wanted some feedback so I can tell my client what he may expect. Penalties and Int? but if he had income in 2007 and is carrying forward a loss, then what?

[kcjenkins]

The carryover should still be claimable for 2007.