I 

111TH CONGRESS 

1ST SESSION H. R. 2452 

To amend the Internal Revenue Code of 1986 to allow a 5-year carryback 

of operating losses, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 15, 2009 

Mr. NEAL of Massachusetts (for himself, Mr. TIBERI, Mr. PASCRELL, Mr. 

DAVIS of Alabama, Ms. BEAN, and Mr. HODES) introduced the following 

bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to allow a 

5-year carryback of operating losses, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Net Operating Loss 

5 (NOL) Carryback Act’’. 

6 SEC. 2. 5-YEAR CARRYBACK OF OPERATING LOSSES. 

7 (a) IN GENERAL.—Subparagraph (H) of section 

8 172(b)(1) of the Internal Revenue Code of 1986 is amend9 ed to read as follows: 


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1 ‘‘(H) CARRYBACK FOR 2008 AND 2009 NET

2 OPERATING LOSSES.— 

3 ‘‘(i) IN GENERAL.—In the case of an 

4 applicable 2008 or 2009 net operating loss 

5 with respect to which the taxpayer has 

6 elected the application of this subpara7 graph— 

8 ‘‘(I) subparagraph (A)(i) shall be 

9 applied by substituting any whole 

10 number elected by the taxpayer which 

11 is more than 2 and less than 6 for ‘2’, 

12 ‘‘(II) subparagraph (E)(ii) shall 

13 be applied by substituting the whole 

14 number which is one less than the 

15 whole number substituted under sub16 clause (I) for ‘2’, and 

17 ‘‘(III) subparagraph (F) shall not 

18 apply. 

19 ‘‘(ii) APPLICABLE 2008 OR 2009 NET

20 OPERATING LOSS.—For purposes of this 

21 subparagraph, the term ‘applicable 2008 

22 or 2009 net operating loss’ means— 

23 ‘‘(I) the taxpayer’s net operating 

24 loss for any taxable year ending in 

25 2008 or 2009, or 


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1 ‘‘(II) if the taxpayer elects to 

2 have this subclause apply in lieu of 

3 subclause (I), the taxpayer’s net oper4 ating loss for any taxable year begin5 ning in 2008 or 2009. 

6 ‘‘(iii) ELECTION.—Any election under 

7 this subparagraph shall be made in such 

8 manner as may be prescribed by the Sec9 retary, and shall be made by the due date 

10 (including extension of time) for filing the 

11 taxpayer’s return for the taxable year of 

12 the net operating loss. Any such election, 

13 once made, shall be irrevocable. 

14 ‘‘(iv) COORDINATION WITH ALTER15 NATIVE TAX NET OPERATING LOSS DEDUC16 TION.—In the case of a taxpayer who 

17 elects to have clause (ii)(II) apply, section 

18 56(d)(1)(A)(ii) shall be applied by sub19 stituting ‘ending during 2001 or 2002 or 

20 beginning during 2008 or 2009’ for ‘end21 ing during 2001, 2002, 2008, or 2009’.’’. 

22 (b) ALTERNATIVE TAX NET OPERATING LOSS DE23 DUCTION.—Subclause (I) of section 56(d)(1)(A)(ii) is 

24 amended to read as follows: 


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1 ‘‘(I) the amount of such deduc2 tion attributable to the sum of 

3 carrybacks of net operating losses 

4 from taxable years ending during 

5 2001, 2002, 2008, or 2009 and 

6 carryovers of net operating losses to 

7 such taxable years, or’’. 

8 (c) LOSS FROM OPERATIONS OF LIFE INSURANCE

9 COMPANIES.—Subsection (b) of section 810 is amended 

10 by adding at the end the following new paragraph: 

11 ‘‘(4) CARRYBACK FOR 2008 AND 2009 LOSSES.— 

12 ‘‘(A) IN GENERAL.—In the case of an ap13 plicable 2008 or 2009 loss from operations with 

14 respect to which the taxpayer has elected the 

15 application of this paragraph, paragraph (1)(A) 

16 shall be applied, at the election of the taxpayer, 

17 by substituting ‘5’ or ‘4’ for ‘3’. 

18 ‘‘(B) APPLICABLE 2008 OR 2009 LOSS FROM

19 OPERATIONS.—For purposes of this paragraph, 

20 the term ‘applicable 2008 or 2009 loss from op21 erations’ means— 

22 ‘‘(i) the taxpayer’s loss from oper23 ations for any taxable year ending in 2008 

24 or 2009, or 


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1 ‘‘(ii) if the taxpayer elects to have this 

2 clause apply in lieu of clause (i), the tax3 payer’s loss from operations for any tax4 able year beginning in 2008 or 2009. 

5 ‘‘(C) ELECTION.—Any election under this 

6 paragraph shall be made in such manner as 

7 may be prescribed by the Secretary, and shall 

8 be made by the due date (including extension of 

9 time) for filing the taxpayer’s return for the 

10 taxable year of the loss from operations. Any 

11 such election, once made, shall be irrevocable. 

12 ‘‘(D) COORDINATION WITH ALTERNATIVE

13 TAX NET OPERATING LOSS DEDUCTION.—In the 

14 case of a taxpayer who elects to have subpara15 graph (B)(ii) apply, section 56(d)(1)(A)(ii) shall 

16 be applied by substituting ‘ending during 2001 

17 or 2002 or beginning during 2008 or 2009’ for 

18 ‘ending during 2001, 2002, 2008, or 2009’.’’. 

19 (d) ANTI-ABUSE RULES.—The Secretary of Treasury 

20 or the Secretary’s designee shall prescribe such rules as 

21 are necessary to prevent the abuse of the purposes of the 

22 amendments made by this section, including anti-stuffing 

23 rules, anti-churning rules (including rules relating to sale24 leasebacks), and rules similar to the rules under section 


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1 1091 of the Internal Revenue Code of 1986 relating to 

2 losses from wash sales. 

3 (e) EFFECTIVE DATES.— 

4 (1) IN GENERAL.—Except as otherwise pro5 vided in this subsection, the amendments made by 

6 this section shall apply to net operating losses aris7 ing in taxable years ending after December 31, 

8 2007. 

9 (2) ALTERNATIVE TAX NET OPERATING LOSS

10 DEDUCTION.—The amendment made by subsection 

11 (b) shall apply to taxable years ending after 1997. 

12 (3) LOSS FROM OPERATIONS OF LIFE INSUR13 ANCE COMPANIES.—The amendment made by sub14 section (d) shall apply to losses from operations aris15 ing in taxable years ending after December 31, 

16 2007. 

17 (4) TRANSITIONAL RULE.—In the case of a net 

18 operating loss (or, in the case of a life insurance 

19 company, a loss from operations) for a taxable year 

20 ending before the date of the enactment of this 

21 Act— 

22 (A) any election made under section 

23 172(b)(3) or 810(b)(3) of the Internal Revenue 

24 Code of 1986 with respect to such loss may 


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1 (notwithstanding such section) be revoked be2 fore the applicable date, 

3 (B) any election made under section 

4 172(b)(1)(H) or 810(b)(4) of such Code with 

5 respect to such loss shall (notwithstanding such 

6 section) be treated as timely made if made be7 fore the applicable date, and 

8 (C) any application under section 6411(a) 

9 of such Code with respect to such loss shall be 

10 treated as timely filed if filed before the appli11 cable date. 

12 For purposes of this paragraph, the term ‘‘applica13 ble date’’ means the date which is 60 days after the 

14 date of the enactment of this Act. 

15 (f) EXCEPTION FOR TARP RECIPIENTS.—The 

16 amendments made by this section shall not apply to— 

17 (1) any taxpayer if— 

18 (A) the Federal Government acquires, at 

19 any time, an equity interest in the taxpayer 

20 pursuant to the Emergency Economic Stabiliza21 tion Act of 2008, or 

22 (B) the Federal Government acquires, at 

23 any time, any warrant (or other right) to ac24 quire any equity interest with respect to the 

25 taxpayer pursuant to such Act, 


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1 (2) the Federal National Mortgage Association 

2 and the Federal Home Loan Mortgage Corporation, 

3 and 

4 (3) any taxpayer which at any time in 2008 or 

5 2009 is a member of the same affiliated group (as 

6 defined in section 1504 of the Internal Revenue 

7 Code of 1986, determined without regard to sub8 section (b) thereof) as a taxpayer described in para9 graph (1) or (2). 

Æ 


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