spect to any underpayment of an installment re-
quired to be paid with respect to the taxable year 
described in subsection (a) to the extent such under-
payment was created or increased by this section. 
(d) APPLICABLE INTEGRATED OIL COMPANY.—For 
purposes of this section, the term ‘‘applicable integrated 
oil company’’ means an integrated oil company (as defined 
in section 291(b)(4) of the Internal Revenue Code of 
1986) which has an average daily worldwide production 
of crude oil of at least 500,000 barrels for the taxable 
year and which had gross receipts in excess of 
$1,000,000,000 for its last taxable year ending during cal-
endar year 2005. For purposes of this subsection all per-
sons treated as a single employer under subsections (a) 
and (b) of section 52 of the Internal Revenue Code of 
1986 shall be treated as 1 person and, in the case of a 
short taxable year, the rule under section 448(c)(3)(B) 
shall apply. 
SEC. 5. ELIMINATION OF AMORTIZATION OF GEOLOGICAL 
AND 
GEOPHYSICAL 
EXPENDITURES 
FOR 
MAJOR INTEGRATED OIL COMPANIES. 
(a) IN GENERAL.—Section 167(h) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new paragraph: 
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‘‘(5) NONAPPLICATION TO MAJOR INTEGRATED 
OIL
COMPANIES.—This subsection shall not apply 
with respect to any expenses paid or incurred for 
any taxable year by any integrated oil company (as 
defined in section 291(b)(4)) which has an average 
daily worldwide production of crude oil of at least 
500,000 barrels for such taxable year.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect as if included in the amend-
ment made by section 1329(a) of the Energy Policy Act 
of 2005. 
SEC. 6. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 
APPLICABLE TO LARGE INTEGRATED OIL 
COMPANIES WHICH ARE DUAL CAPACITY 
TAXPAYERS. 
(a) IN GENERAL.—Section 901 of the Internal Rev-
enue Code of 1986 (relating to credit for taxes of foreign 
countries and of possessions of the United States) is 
amended by redesignating subsection (m) as subsection 
(n) and by inserting after subsection (l) the following new 
subsection: 
‘‘(m) SPECIAL RULES RELATING TO LARGE INTE-
GRATED OIL COMPANIES WHICH ARE DUAL CAPACITY 
TAXPAYERS.— 
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‘‘(1) GENERAL
RULE.—Notwithstanding any 
other provision of this chapter, any amount paid or 
accrued by a dual capacity taxpayer which is a large 
integrated oil company to a foreign country or pos-
session of the United States for any period shall not 
be considered a tax— 
‘‘(A) if, for such period, the foreign coun-
try or possession does not impose a generally 
applicable income tax, or 
‘‘(B) to the extent such amount exceeds 
the amount (determined in accordance with reg-
ulations) which— 
‘‘(i) is paid by such dual capacity tax-
payer pursuant to the generally applicable 
income tax imposed by the country or pos-
session, or 
‘‘(ii) would be paid if the generally ap-
plicable income tax imposed by the country 
or possession were applicable to such dual 
capacity taxpayer. 
Nothing in this paragraph shall be construed to 
imply the proper treatment of any such amount 
not in excess of the amount determined under 
subparagraph (B). 
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‘‘(2) DUAL
CAPACITY
TAXPAYER.—For pur-
poses of this subsection, the term ‘dual capacity tax-
payer’ means, with respect to any foreign country or 
possession of the United States, a person who— 
‘‘(A) is subject to a levy of such country or 
possession, and 
‘‘(B) receives (or will receive) directly or 
indirectly a specific economic benefit (as deter-
mined in accordance with regulations) from 
such country or possession. 
‘‘(3) GENERALLY APPLICABLE INCOME TAX.— 
For purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘generally 
applicable income tax’ means an income tax (or 
a series of income taxes) which is generally im-
posed under the laws of a foreign country or 
possession on income derived from the conduct 
of a trade or business within such country or 
possession. 
‘‘(B) EXCEPTIONS.—Such term shall not 
include a tax unless it has substantial applica-
tion, by its terms and in practice, to— 
‘‘(i) persons who are not dual capacity 
taxpayers, and 
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