II 110th CONGRESS 1st Session S. 2389 IN THE SENATE OF THE UNITED STATES November 16, 2007 Mr. Kerry (for himself, Ms. Cantwell, and Mr. Lieberman) 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 increase the alternative minimum tax credit amount for individuals with long-term unused credits for prior year minimum tax liability, and for other purposes.

1.

Increase of AMT refundable credit amount for individuals with long-term unused credits for prior year minimum tax liability, etc

(a)

In general

Paragraph (2) of section 53(e) of the Internal Revenue Code of 1986 is amended to read as follows: (2)

AMT refundable credit amount

For purposes of paragraph (1), the term AMT refundable credit amount means, with respect to any taxable year, the amount (not in excess of the long-term unused minimum tax credit for such taxable year) equal to the greater of— (A)50 percent of the long-term unused minimum tax credit for such taxable year, or (B)the amount (if any) of the AMT refundable credit amount determined under this paragraph for the taxpayer’s preceding taxable year. . (b)

Treatment of certain underpayments, interest, and penalties attributable to the treatment of incentive stock options

Section 53 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (f)

Treatment of certain underpayments, interest, and penalties attributable to the treatment of incentive stock options

(1)

Abatement

Any underpayment of tax outstanding on the date of the enactment of this subsection which is attributable to the application of section 56(b)(3) for any taxable year ending before January 1, 2007 (and any interest or penalty with respect to such underpayment which is outstanding on such date of enactment), is hereby abated. No credit shall be allowed under this section with respect to any amount abated under this paragraph. (2)

Increase in credit for certain interest and penalties already paid

Any interest or penalty paid before the date of the enactment of this subsection which would (but for such payment) have been abated under paragraph (1) shall be treated for purposes of this section as an amount of adjusted net minimum tax imposed for the taxable year of the underpayment to which such interest or penalty relates. . (c)

Effective date

(1)

In general

Except as provided in paragraph (2), the amendment made by this section shall apply to taxable years beginning after December 31, 2006. (2)

Abatement

Section 53(f)(1) of the Internal Revenue Code of 1986, as added by subsection (b), shall take effect on the date of the enactment of this Act.