I 

117TH CONGRESS 

1ST SESSION H. R. 696 

To amend the Internal Revenue Code of 1986 to impose a limitation on 

excess business losses of non-corporate taxpayers and to modify the 

carryback of net operating losses for certain taxable years. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 2, 2021 

Mr. DOGGETT (for himself, Ms. DELAURO, Mr. COHEN, Mr. BEYER, Mr. 

BLUMENAUER, Ms. BONAMICI, Mr. CASTEN, Ms. CHU, Mr. CICILLINE, 

Mr. CONNOLLY, Mr. DEFAZIO, Ms. DEGETTE, Ms. ESHOO, Mr. GARCI ́A

of Illinois, Ms. GARCIA of Texas, Mr. GRIJALVA, Mrs. HAYES, Ms. KAPTUR, Mr. LANGEVIN, Mr. LIEU, Mr. MCGOVERN, Mr. NADLER, Ms. NORTON, Ms. PINGREE, Mr. POCAN, Mr. RYAN, Mr. SARBANES, Ms. SCANLON, Ms. SCHAKOWSKY, Mr. TONKO, Mrs. WATSON COLEMAN, and Mr. 

WELCH) 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 impose 

a limitation on excess business losses of non-corporate 

taxpayers and to modify the carryback of net operating 

losses for certain taxable years. 

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 ‘‘CARES Windfall for 

5 the Wealthiest Repeal Act’’. 


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1 SEC. 2. LIMITATION ON EXCESS BUSINESS LOSSES OF NON2 CORPORATE TAXPAYERS RESTORED AND 

3 MADE PERMANENT. 

4 (a) IN GENERAL.—Section 461(l)(1) of the Internal 

5 Revenue Code of 1986 is amended to read as follows: 

6 ‘‘(1) LIMITATION.—In the case of a taxpayer 

7 other than a corporation, any excess business loss of 

8 the taxpayer shall not be allowed.’’. 

9 (b) FARMING LOSSES.—Section 461 of such Code is 

10 amended by striking subsection (j). 

11 (c) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to taxable years beginning after 

13 December 31, 2017. 

14 SEC. 3. CERTAIN TAXPAYERS ALLOWED CARRYBACK OF 

15 NET OPERATING LOSSES ARISING IN 2019 

16 AND 2020. 

17 (a) CARRYBACK OF LOSSES ARISING IN 2019 AND

18 2020.— 

19 (1) IN GENERAL.—Section 172(b)(1)(D)(i) of 

20 the Internal Revenue Code of 1986 is amended to 

21 read as follows: 

22 ‘‘(i) IN GENERAL.—In the case of any 

23 net operating loss arising in a taxable year 

24 beginning after December 31, 2018, and 

25 before January 1, 2021, and to which sub26 paragraphs (B) and (C)(i) do not apply, 


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1 such loss shall be a net operating loss 

2 carryback to each taxable year preceding 

3 the taxable year of such loss, but not to 

4 any taxable year beginning before January 

5 1, 2018.’’. 

6 (2) CONFORMING AMENDMENTS.— 

7 (A) The heading for section 172(b)(1)(D) 

8 of such Code is amended by striking ‘‘2018, 

9 2019, AND’’ and inserting ‘‘2019 AND’’. 

10 (B) Section 172(b)(1)(D) of such Code is 

11 amended by striking clause (iii) and by redesig12 nating clauses (iv) and (v) as clauses (iii) and 

13 (iv), respectively. 

14 (C) Section 172(b)(1)(D)(iii) of such Code, 

15 as so redesignated, is amended by striking 

16 ‘‘(i)(I)’’ and inserting ‘‘(i)’’. 

17 (D) Section 172(b)(1)(D)(iv) of such Code, 

18 as so redesignated, is amended— 

19 (i) by striking ‘‘If the 5-year 

20 carryback period under clause (i)(I)’’ in 

21 subclause (I) and inserting ‘‘If the 

22 carryback period under clause (i)’’, and 

23 (ii) by striking ‘‘2018 or’’ in subclause 

24 (II). 


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1 (b) DISALLOWED FOR CERTAIN TAXPAYERS.—Sec2 tion 172(b)(1)(D) of such Code, as amended by the pre3 ceding provisions of this Act, is amended by adding at the 

4 end the following new clauses: 

5 ‘‘(v) CARRYBACK DISALLOWED FOR

6 CERTAIN TAXPAYERS.—Clause (i) shall not 

7 apply with respect to any loss arising in a 

8 taxable year in which— 

9 ‘‘(I) the taxpayer (or any related 

10 person) is not allowed a deduction 

11 under this chapter for the taxable 

12 year by reason of section 162(m) or 

13 section 280G, or 

14 ‘‘(II) the taxpayer (or any related 

15 person) is a specified corporation for 

16 the taxable year. 

17 ‘‘(vi) SPECIFIED CORPORATION.—For 

18 purposes of clause (v)— 

19 ‘‘(I) IN GENERAL.—The term 

20 ‘specified corporation’ means, with re21 spect to any taxable year, a corpora22 tion the aggregate distributions (in23 cluding redemptions) of which during 

24 all taxable years ending after Decem25 ber 31, 2017, exceed the sum of appliVerDate Sep 11 2014 20:35 Feb 22, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H696.IH H696

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1 cable stock issued of such corporation 

2 and 5 percent of the fair market value 

3 of the stock of such corporation as of 

4 the last day of the taxable year. 

5 ‘‘(II) APPLICABLE STOCK

6 ISSUED.—The term ‘applicable stock 

7 issued’ means, with respect to any 

8 corporation, the aggregate fair market 

9 value of stock (as of the issue date of 

10 such stock) issued by the corporation 

11 during all taxable years ending after 

12 December 31, 2017, in exchange for 

13 money or property other than stock in 

14 such corporation. 

15 ‘‘(III) CERTAIN PREFERRED

16 STOCK DISREGARDED.—For purposes 

17 of subclause (I), stock described in 

18 section 1504(a)(4), and distributions 

19 (including redemptions) with respect 

20 to such stock, shall be disregarded. 

21 ‘‘(vii) RELATED PERSON.—For pur22 poses of clause (v), a person is a related 

23 person to a taxpayer if the related person 

24 bears a relationship to the taxpayer speciVerDate Sep 11 2014 20:35 Feb 22, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H696.IH H696

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1 fied in section 267(b) or section 

2 707(b)(1).’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall take effect as if included in the enact5 ment of section 2303(b) of the Coronavirus Aid, Relief, 

6 and Economic Security Act. 

Æ 


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