[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1937 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1937

To amend the Internal Revenue Code of 1986 to allow a 5-year carryback 
              of operating losses, and for other purposes.


_______________________________________________________________________


                   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.

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

SECTION 1. 5-YEAR CARRYBACK OF OPERATING LOSSES.

    (a) In General.--Subparagraph (H) of section 172(b)(1) of the 
Internal Revenue Code of 1986 is amended to read as follows:
                    ``(H) Carryback for 2008 and 2009 net operating 
                losses.--
                            ``(i) 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--
                                    ``(I) 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',
                                    ``(II) 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
                                    ``(III) subparagraph (F) shall not 
                                apply.
                            ``(ii) Applicable 2008 or 2009 net 
                        operating loss.--For purposes of this 
                        subparagraph, the term `applicable 2008 or 2009 
                        net operating loss' means--
                                    ``(I) the taxpayer's net operating 
                                loss for any taxable year ending in 
                                2008 or 2009, or
                                    ``(II) 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.
                            ``(iii) 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.
                            ``(iv) 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'.''.
    (b) Alternative Tax Net Operating Loss Deduction.--Subclause (I) of 
section 56(d)(1)(A)(ii) is amended to read as follows:
                                    ``(I) 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''.
    (c) Loss From Operations of Life Insurance Companies.--Subsection 
(b) of section 810 is amended by adding at the end the following new 
paragraph:
            ``(4) Carryback for 2008 and 2009 losses.--
                    ``(A) 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'.
                    ``(B) Applicable 2008 or 2009 loss from 
                operations.--For purposes of this paragraph, the term 
                `applicable 2008 or 2009 loss from operations' means--
                            ``(i) the taxpayer's loss from operations 
                        for any taxable year ending in 2008 or 2009, or
                            ``(ii) 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.
                    ``(C) 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.
                    ``(D) 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'.''.
    (d) 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.
    (e) Effective Dates.--
            (1) 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.
            (2) Alternative tax net operating loss deduction.--The 
        amendment made by subsection (b) shall apply to taxable years 
        ending after 1997.
            (3) 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.
            (4) 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--
                    (A) 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,
                    (B) 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
                    (C) 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.
        For purposes of this paragraph, the term ``applicable date'' 
        means the date which is 60 days after the date of the enactment 
        of this Act.
    (f) Exception for TARP Recipients.--The amendments made by this 
section shall not apply to--
            (1) any taxpayer if--
                    (A) the Federal Government acquires, at any time, 
                an equity interest in the taxpayer pursuant to the 
                Emergency Economic Stabilization Act of 2008, or
                    (B) 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,
            (2) the Federal National Mortgage Association and the 
        Federal Home Loan Mortgage Corporation, and
            (3) 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).
    (g) 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.
                                 <all>