II
111th CONGRESS
1st Session
S. 1937
IN THE SENATE OF THE UNITED STATES
October 27, 2009
Mr. Brownback introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to allow a 5-year carryback of operating losses, and for other purposes.
5-year carryback of operating losses
In general
Subparagraph (H) of section 172(b)(1) of the Internal Revenue Code of 1986 is amended to read as follows:
Carryback for 2008 and 2009 net operating losses
In general
In the case of an applicable 2008 or 2009 net operating loss with respect to which the taxpayer has elected the application of this subparagraph—
subparagraph (A)(i) shall be applied by
substituting any whole number elected by the taxpayer which is more than 2 and
less than 6 for 2
,
subparagraph
(E)(ii) shall be applied by substituting the whole number which is one less
than the whole number substituted under subclause (I) for 2
,
and
subparagraph (F) shall not apply.
Applicable 2008 or 2009 net operating loss
For purposes of this subparagraph, the term applicable 2008 or 2009 net operating loss means—
the taxpayer’s net operating loss for any taxable year ending in 2008 or 2009, or
if the taxpayer elects to have this subclause apply in lieu of subclause (I), the taxpayer’s net operating loss for any taxable year beginning in 2008 or 2009.
Election
Any election under this subparagraph shall be made in such manner as may be prescribed by the Secretary, and shall be made by the due date (including extension of time) for filing the taxpayer’s return for the taxable year of the net operating loss. Any such election, once made, shall be irrevocable.
Coordination with alternative tax net operating loss deduction
In the case of
a taxpayer who elects to have clause (ii)(II) apply, section 56(d)(1)(A)(ii)
shall be applied by substituting ending during 2001 or 2002 or beginning
during 2008 or 2009
for ending during 2001, 2002, 2008, or
2009
.
.
Alternative tax net operating loss deduction
Subclause (I) of section 56(d)(1)(A)(ii) is amended to read as follows:
the amount of such deduction attributable to the sum of carrybacks of net operating losses from taxable years ending during 2001, 2002, 2008, or 2009 and carryovers of net operating losses to such taxable years, or
.
Loss from operations of life insurance companies
Subsection (b) of section 810 is amended by adding at the end the following new paragraph:
Carryback for 2008 and 2009 losses
In general
In the case of an applicable 2008 or 2009 loss from
operations with respect to which the taxpayer has elected the application of
this paragraph, paragraph (1)(A) shall be applied, at the election of the
taxpayer, by substituting 5
or 4
for
3
.
Applicable 2008 or 2009 loss from operations
For purposes of this paragraph, the term applicable 2008 or 2009 loss from operations means—
the taxpayer’s loss from operations for any taxable year ending in 2008 or 2009, or
if the taxpayer elects to have this clause apply in lieu of clause (i), the taxpayer’s loss from operations for any taxable year beginning in 2008 or 2009.
Election
Any election under this paragraph shall be made in such manner as may be prescribed by the Secretary, and shall be made by the due date (including extension of time) for filing the taxpayer’s return for the taxable year of the loss from operations. Any such election, once made, shall be irrevocable.
Coordination with alternative tax net operating loss deduction
In the case of
a taxpayer who elects to have subparagraph (B)(ii) apply, section
56(d)(1)(A)(ii) shall be applied by substituting ending during 2001 or
2002 or beginning during 2008 or 2009
for ending during 2001,
2002, 2008, or
2009
.
.
Anti-Abuse rules
The Secretary of Treasury or the Secretary's designee shall prescribe such rules as are necessary to prevent the abuse of the purposes of the amendments made by this section, including anti-stuffing rules, anti-churning rules (including rules relating to sale-leasebacks), and rules similar to the rules under section 1091 of the Internal Revenue Code of 1986 relating to losses from wash sales.
Effective dates
In general
Except as otherwise provided in this subsection, the amendments made by this section shall apply to net operating losses arising in taxable years ending after December 31, 2007.
Alternative tax net operating loss deduction
The amendment made by subsection (b) shall apply to taxable years ending after 1997.
Loss from operations of life insurance companies
The amendment made by subsection (d) shall apply to losses from operations arising in taxable years ending after December 31, 2007.
Transitional rule
In the case of a net operating loss (or, in the case of a life insurance company, a loss from operations) for a taxable year ending before the date of the enactment of this Act—
any election made under section 172(b)(3) or 810(b)(3) of the Internal Revenue Code of 1986 with respect to such loss may (notwithstanding such section) be revoked before the applicable date,
any election made under section 172(b)(1)(H) or 810(b)(4) of such Code with respect to such loss shall (notwithstanding such section) be treated as timely made if made before the applicable date, and
any application under section 6411(a) of such Code with respect to such loss shall be treated as timely filed if filed before the applicable date.
Exception for TARP recipients
The amendments made by this section shall not apply to—
any taxpayer if—
the Federal Government acquires, at any time, an equity interest in the taxpayer pursuant to the Emergency Economic Stabilization Act of 2008, or
the Federal Government acquires, at any time, any warrant (or other right) to acquire any equity interest with respect to the taxpayer pursuant to such Act,
the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, and
any taxpayer which at any time in 2008 or 2009 is a member of the same affiliated group (as defined in section 1504 of the Internal Revenue Code of 1986, determined without regard to subsection (b) thereof) as a taxpayer described in paragraph (1) or (2).
Transfers to the general fund
From time to time, the Secretary of the Treasury shall transfer to the general fund of the Treasury an amount equal to the reduction in revenues to the Treasury resulting from the amendments made by subsections (a) through (f). Notwithstanding section 5 of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5), such amounts shall be transferred from the amounts appropriated or made available and remaining unobligated under such Act.
