ignating subsection (m) as subsection (n) and by inserting 
after subsection (l) the following new subsection: 
‘‘(m) TAXPAYERS ENGAGED IN BUSINESS ACTIVITY 
WITH IRAN PROHIBITED BY UNITED STATES LAW.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of this part, in the case of a taxpayer 
which is a member of an expanded affiliated group 
any member of which, on any day during the taxable 
year, engaged in business activity with Iran which is 
prohibited by United States law, no credit shall be 
allowed under subsection (a) to the taxpayer for any 
income, war profits, or excess profits taxes paid or 
accrued (or deemed paid under section 902 or 960) 
to any country if such taxes are with respect to in-
come attributable to a period any part of which oc-
curs during such taxable year. 
‘‘(2) BUSINESS
ACTIVITY.—For purposes of 
paragraph (1)— 
‘‘(A) IN
GENERAL.—The term ‘business 
activity’ means any of the following: 
‘‘(i) An entity described in subpara-
graph (D) that— 
‘‘(I) has in effect a contract that 
includes the responsibility for the de-
velopment of petroleum resources, pe-
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troleum refining capacity, or liquefied 
natural gas located in Iran or (as the 
case may be), or 
‘‘(II) has in effect a contract pro-
viding for the general supervision and 
guarantee of another person’s per-
formance of a contract described in 
subclause (I). 
‘‘(ii) The purchase of a share of own-
ership, including an equity interest, in the 
development described in clause (i). 
‘‘(iii) Having in effect a contract pro-
viding for the participation in royalties, 
earnings, or profits in the development de-
scribed in clause (i), without regard to the 
form of the participation. 
‘‘(B) 
GOODS, 
SERVICES, 
AND
TECH-
NOLOGY.—The term ‘business activity’ includes 
the entry into, performance, or financing of a 
contract to sell or purchase goods, services, or 
technology. 
‘‘(C) SPECIAL RULE.—For purposes of this 
paragraph, an amendment or other modification 
that is made, on or the date of the enactment 
of this subsection to an agreement or contract 
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shall be treated as the entry of an agreement 
or contract. 
‘‘(D) ENTITIES
DESCRIBED.—For pur-
poses of subparagraph (A), an entity described 
in this subparagraph is— 
‘‘(i) a natural person; 
‘‘(ii) a corporation, business associa-
tion, partnership, society, trust, financial 
institution, insurer, underwriter, guar-
antor, and any other business organization; 
‘‘(iii) any foreign subsidiary of any en-
tity described in clause (ii); 
‘‘(iv) any governmental entity oper-
ating as a business enterprise, such as an 
export credit agency; and 
‘‘(v) any successor to any entity de-
scribed in clause (ii), (iii), or (iv). 
‘‘(3) TAXES ALLOWED AS A DEDUCTION, ETC.— 
Sections 275 and 78 shall not apply to any tax 
which is not allowable as a credit under subsection 
(a) by reason of this subsection. 
‘‘(4) EXPANDED AFFILIATED GROUP.—For pur-
poses of paragraph (1), the term ‘expanded affiliated 
group’ means an affiliated group (as defined in sub-
section (a) of section 1504 (without regard to sub-
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sections (b)(2), (b)(4), and (c) thereof)); except that 
section 1504(a) shall be applied by substituting 
‘more than 50 percent’ for ‘at least 80 percent’ each 
place it appears. 
‘‘(5) REGULATIONS.—The Secretary shall pre-
scribe such regulations as may be necessary or ap-
propriate to carry out the purposes of this sub-
section, including regulations which impose appro-
priate reporting requirements.’’. 
(b) INCOME INCLUDED AS SUBPART F INCOME.— 
Subsection (a) of section 952 is amended by striking 
‘‘and’’ at the end of paragraph (4), by striking the period 
at the end of paragraph (5) and inserting ‘‘, and’’, and 
by inserting after paragraph (5) the following new para-
graph: 
‘‘(6) all income of such corporation derived 
from all foreign countries during any period during 
which section 901(m) applies to such corporation.’’. 
(c) REPORTING.— 
(1) IN GENERAL.—Part II of subchapter B of 
chapter 68 of the Internal Revenue Code of 1986 
(relating to failure to comply with certain informa-
tion reporting requirements) is amended by adding 
at the end the following new section: 
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