[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 354 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 354

To amend section 108(f) of the Internal Revenue Code of 1986 to clarify 
 the tax treatment of discharges of indebtedness under certain student 
                                 loans.


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                   IN THE SENATE OF THE UNITED STATES



 Mr. Stevens (for himself and Mr. Murkowski) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend section 108(f) of the Internal Revenue Code of 1986 to clarify 
 the tax treatment of discharges of indebtedness under certain student 
                                 loans.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. TREATMENT OF DISCHARGES OF INDEBTEDNESS UNDER CERTAIN 
              STUDENT LOANS.

    (1) In General.--Paragraph (1) of section 108(f) of the Internal 
Revenue Code of 1986 (relating to student loans) is amended--
            (1) by inserting ``(A)'' after ``discharged'', and
            (2) by inserting before the period at the end the 
        following: ``, or (B) in the case of a loan made by a State (or 
        from funds provided by a State) which had no accredited 
        professional schools for the study of law or medicine on the 
        date the loan was made, if the individual resided for a certain 
        period of time in the State after completion of the 
        individual's attendance at the educational organization with 
        respect to which the loan was made''.
    (b) Effective Date; Waiver of Statute of Limitations.--
            (1) Effective date.--The amendment made by subsection (a) 
        shall apply to discharges of indebtedness made on or after 
        January 1, 1987.
            (2) Waiver of statute of limitations.--In the case of any 
        taxable year ending before the date of the enactment of this 
        Act--
                    (A) the period for claiming a credit or refund of 
                any overpayment of tax resulting from the application 
                of the amendment made by subsection (a) shall not 
                expire before the date which is 1 year after the date 
                of the enactment of this Act; and
                    (B) if, after the application of subparagraph (A), 
                credit or refund of any overpayment of tax resulting 
                from the application of the amendment made by 
                subsection (a) is prevented at any time before the 
                close of such 1-year period by the operation of any law 
                or rule of law (including res judicata), credit or 
                refund of such overpayment (to the extent attributable 
                to the application of the amendment made by subsection 
                (a)) may, nevertheless, be made or allowed if claim 
                therefore is filed before the close of such 1-year 
                period.

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