I 
117TH CONGRESS 
1ST SESSION H. R. 3623 
To amend the Internal Revenue Code of 1986 to provide for advance refunds 
of certain net operating losses and research expenditures, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 28, 2021 
Mr. PHILLIPS (for himself and Mrs. WALORSKI) 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 provide 
for advance refunds of certain net operating losses and 
research expenditures, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Innovation and Growth 
Now by Investing in Tomorrow’s Enterprises Act’’ or the 
‘‘IGNITE American Innovation Act’’. 
SEC. 2. ADVANCE REFUNDS OF NET OPERATING LOSSES 
FOR C CORPORATION TAXPAYERS. 
(a) IN GENERAL.— 
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(1) NET OPERATING LOSS CARRYOVERS.—Sec-
tion 172 of the Internal Revenue Code of 1986 is 
amended by redesignating subsection (g) as sub-
section (h) and by inserting after subsection (f) the 
following: 
‘‘(g) ADVANCE REFUND FOR C CORPORATIONS RE-
LATING TO CERTAIN CARRYOVERS ARISING DURING 2015 
THROUGH 2021.— 
‘‘(1) IN GENERAL.—A taxpayer to whom this 
subsection applies may, in lieu of an election with re-
spect to a net operating loss carryback under sub-
section (b)(1)(D), elect an advance refund of net op-
erating loss carryovers in the amount equal to— 
‘‘(A) the rate set forth in section 11 (as in 
effect on the date of the enactment of this para-
graph), multiplied by 
‘‘(B) any net operating loss carryovers that 
arose— 
‘‘(i) in a taxable year beginning on or 
after January 1, 2015, and before January 
1, 2020, or 
‘‘(ii) in a taxable year beginning on or 
after January 1, 2019, and before January 
1, 2022. 
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‘‘(2) TAXPAYER DESCRIBED.—For purposes of 
paragraph (1), this subsection applies to a taxpayer 
if— 
‘‘(A) the taxpayer is a C corporation, 
‘‘(B) the average number of full-time em-
ployees (as determined for purposes of deter-
mining whether an employer is an applicable 
large 
employer 
for 
purposes 
of 
section 
4980H(c)(2)) employed by the taxpayer during 
calendar year 2019 or 2020, whichever is great-
er, is greater than five and did not exceed 
1,500, and 
‘‘(C) the taxpayer has complied to date 
with filing of all forms or return requirements 
under section 3102, 3111, 3301, and 3402 with 
respect to calendar years 2019 and 2020. 
‘‘(3) SPECIAL
RULES.—For purposes of this 
subsection— 
‘‘(A) CERTAIN
CONTRIBUTIONS
OF
CAP-
ITAL
NOT
TAKEN
INTO
ACCOUNT
IN
DETER-
MINING OWNERSHIP CHANGE UNDER SECTION 
382.—For purposes of determining whether an 
ownership change has occurred with respect to 
the loss corporation under section 382(g) in 
computing the amount of any advance refund 
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under this section, a transfer of stock in ex-
change for a capital contribution to such loss 
corporation shall not be taken into account if— 
‘‘(i) the value of the stock transferred 
is commensurate with the amount of cap-
ital being contributed, and 
‘‘(ii) such exchange is not part of a 
plan to redeem other shareholders. 
‘‘(B) AGGREGATE
LIMITATION.—The ag-
gregate amount of net operating loss or net op-
erating loss carryover for which an advance re-
fund is elected pursuant to this subsection shall 
not exceed $100,000,000. 
‘‘(C) REDUCTION
OF
NET
OPERATING 
LOSS.—The net operating losses of the taxpayer 
determined under subsection (c) shall be re-
duced by the amount of any net operating loss 
or net operating loss carryover for which an ad-
vance refund is elected pursuant to this sub-
section. 
‘‘(D) AGGREGATION
RULE.—All corpora-
tions treated as a single employer under sub-
section (a) of section 52 or subsection (m) or 
(o) under section 414 shall be treated as a sin-
gle taxpayer for purposes of this section. 
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‘‘(4) REGULATIONS AND GUIDANCE.—The Sec-
retary shall issue such regulations and other guid-
ance as may be necessary to carry out the purposes 
of this section, including regulations and other guid-
ance— 
‘‘(A) to allow for the making of an election 
for the application of this subsection in such 
manner as the Secretary may prescribe, 
‘‘(B) to allow the payment of the advance 
refund in accordance with section 6429 based 
on such information as the Secretary shall re-
quire, 
‘‘(C) to allow advance refunds permitted 
under this subsection to be claimed on such 
forms as the Secretary shall prescribe, and 
‘‘(D) to provide for the application of this 
subsection to taxpayers that file consolidated 
returns. 
‘‘(5) ADVANCE REFUND.—See section 6429 for 
rules for claiming the advance refund.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
172(c) of such Code is amended by inserting before 
the period at the end the following: ‘‘and with the 
reduction required by subsection (g)’’. 
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(b) ADVANCE REFUND OF RESEARCH CREDITS AND 
ORPHAN DRUG CREDITS
FOR C CORPORATION TAX-
PAYERS.—Section 39 of such Code is amended by adding 
at the end the following: 
‘‘(e) ADVANCE REFUND OF RESEARCH AND ORPHAN 
DRUG CREDITS.— 
‘‘(1) IN GENERAL.—An eligible taxpayer may 
elect an advance refund of the portion of any unused 
business credit carryforward under section 39 that— 
‘‘(A) is attributable to the credit deter-
mined under section 41 or the credit deter-
mined under section 45C, and 
‘‘(B) 
is 
an 
unused 
business 
credit 
carryforward carried to a taxable year begin-
ning on or after January 1, 2020, and before 
January 1, 2022, and that arose in taxable 
years beginning after January 1, 2015. 
‘‘(2) LIMITATION.—The amount elected under 
paragraph (1) for a taxable year may not exceed the 
excess of $25,000,000 reduced by the amount elect-
ed for the taxable year as an advance refund of net 
operating loss carryovers under section 172(g). 
‘‘(3) ELIGIBLE
TAXPAYER.—For purposes of 
this subsection, a taxpayer is an eligible taxpayer 
if— 
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‘‘(A) the taxpayer is a C corporation, and 
‘‘(B) the taxpayer does not have an out-
standing loan made or guaranteed pursuant to 
section 7(a)(37) of the Small Business Act (15 
U.S.C. 636(a)(37)). 
‘‘(4) INAPPLICABILITY OF SECTIONS 38(C) AND 
383.—For purposes of this subsection, the amount of 
any advance refund shall be computed without re-
spect to the limitations under sections 38(c) and 
383(a). 
‘‘(5) REGULATIONS AND GUIDANCE.—The Sec-
retary shall issue such regulations and other guid-
ance as may be necessary— 
‘‘(A) to allow for the making of an election 
under paragraph (1) in such manner as the 
Secretary may by regulations prescribe, 
‘‘(B) to allow the advance refund under 
this subsection and section 6429 based on such 
information as the Secretary shall require, and 
‘‘(C) to allow advance refunds under this 
section to be claimed on such forms as the Sec-
retary shall prescribe.’’. 
(c) ADVANCE REFUND OF CERTAIN NET OPERATING 
LOSSES, RESEARCH CREDIT, AND ORPHAN DRUG CRED-
IT.— 
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(1) IN GENERAL.—Subchapter B of chapter 65 
of such Code is amended by inserting after section 
6428 the following new section: 
‘‘SEC. 6429. ADVANCE REFUND OF CERTAIN NET OPER-
ATING LOSSES, RESEARCH CREDIT, AND OR-
PHAN DRUG CREDIT. 
‘‘(a) IN GENERAL.—In the case of a C corporation, 
the advance refund sum may be claimed by the taxpayer 
as follows: 
‘‘(1) PAYROLL TAXES.—First, by reducing de-
posits or payments of— 
‘‘(A) the applicable employment taxes im-
posed 
under 
sections 
3101(a), 
3101(b), 
3111(a), and 3111(b) (reduced by any credits 
allowed under subsections (e) and (f) of section 
3111, sections 7001 and 7003 of the Families 
First Coronavirus Response Act and section 
2301 of the Coronavirus, Aid, Relief, and Eco-
nomic Security Act) on the wages paid with re-
spect to the employment of all the employees of 
the taxpayer for a calendar quarter, and 
‘‘(B) the withholding taxes required to be 
paid by an employer pursuant to section 3403, 
with the balance of the advance refund payable 
to the taxpayer. 
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‘‘(2) ADVANCE
REFUNDABILITY
OF
EXCESS 
LOSSES.—Second, any remaining amount to be re-
funded to the taxpayer after the application of para-
graph (1) shall be treated as an overpayment and 
shall be refunded in a manner similar to that pre-
scribed in subsection 2301(b)(3) of the Coronavirus, 
Aid, Relief, and Economic Security Act. 
‘‘(b) ADVANCE REFUND SUM.—For purposes of sub-
section (a), the term ‘advance refund sum’ means the sum 
of— 
‘‘(1) the amount elected by the taxpayer as an 
advance refund of net operating loss carryovers 
under section 172(g), and 
‘‘(2) the amount of any unused business credit 
carryforward elected under section 39(e) that is at-
tributable to the research credit determined under 
section 41 or the orphan drug credit determined 
under section 45C. 
‘‘(c) RECAPTURE.— 
‘‘(1) IN
GENERAL.—The Secretary shall, by 
regulations, provide for recapturing the benefit of 
any advance refund allowable under this section in 
the amount that the advance refund exceeds the sum 
of— 
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‘‘(A) the aggregate amount spent by the 
corporation on payroll, research expenses, and 
property, plant and equipment during the re-
capture period, plus 
‘‘(B) in the case of a sale or full or partial 
liquidation of the corporation during the recap-
ture period, the amount of any proceeds or dis-
tributions received by shareholders of the cor-
poration attributable to such sale or liquidation. 
‘‘(2) RECAPTURE
PERIOD.—For purposes of 
paragraph (1), the term ‘recapture period’ means 
the three-year period beginning on the date of the 
advance refund.’’. 
(2) TRANSFERS
TO
FEDERAL
OLD-AGE
AND 
SURVIVORS
INSURANCE
TRUST
FUND.—There are 
hereby appropriated to the Federal Old-Age and 
Survivors Insurance Trust Fund and the Federal 
Disability Insurance Trust Fund established under 
section 201 of the Social Security Act (42 U.S.C. 
401), the Federal Hospital Insurance Trust Fund 
established under section 1817(a) of the Social Se-
curity Act (42 U.S.C. 1395i(a)), and the Social Se-
curity Equivalent Benefit Account established under 
section 15A(a) of the Railroad Retirement Act of 
1974 (45 U.S.C. 14 231n–1(a)) amounts equal to 
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the reduction in revenues to the Treasury by reason 
of this section (without regard to this subsection). 
Amounts appropriated by the preceding sentence 
shall be transferred from the general fund at such 
times and in such manner as to replicate to the ex-
tent possible the transfers which would have oc-
curred to such Trust Fund or Account had this sec-
tion not been enacted. 
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter B of chapter 65 of such Code 
is amended by inserting after the item relating to 
section 6428 the following new item: 
‘‘Sec. 6429. Advance refund of certain net operating losses, research credit, and 
orphan drug credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2020. 
SEC. 3. ENHANCED RESEARCH CREDIT FOR CERTAIN PAN-
DEMIC RESEARCH EXPENDITURES. 
(a) IN GENERAL.—Section 41 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following: 
‘‘(i) ENHANCED CREDIT FOR CERTAIN PANDEMIC 
RESEARCH EXPENDITURES.— 
‘‘(1) IN
GENERAL.—For purposes of deter-
mining the amount of qualified research expenses 
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under subsection (b) for the taxable year, the 
amount of any qualified pandemic research expendi-
tures paid or incurred by a taxpayer on or after 
February 15, 2020, and before January 1, 2022, 
shall be equal to 200 percent of the amount paid or 
incurred. 
‘‘(2) QUALIFIED
PANDEMIC
RESEARCH
EX-
PENDITURES.—The term ‘qualified pandemic re-
search expenditures’ means expenditures paid or in-
curred in connection with the research and develop-
ment of products regulated by the Food and Drug 
Administration (including biological products, drugs, 
and devices) that are intended to be used in the di-
agnosis, prevention and treatment of diseases arising 
from a virus (or other pathogen) with pandemic po-
tential, and such other similar expenditures as pre-
scribed by the Secretary in regulations.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2020. 
Æ 
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