Status of TCJA Technical Correction - NOL Carryback

When Congress passed the TCJA and repealed the 2-year NOL carryback, the law was incorrectly written. It repealed the carryback for tax years ending after Dec. 31, 2017. However, the conference committee provided an effective date for tax years beginning after Dec. 31, 2017.

I have a fiscal year 1/31/18 C-Corp with an NOL. This was a planned NOL to recover some prior year's taxes. We submitted the Form 1139 and the IRS sent it back with a letter, saying "No Way, Jose."

Are we going to see the technical correction? Anybody "in the know" on this.

I haven't been following what's happening in the House Ways and Means Committee or Senate Finance Committee, and so I can't answer your question, unfortunately.

This is another example of what happens when they try to rush things through Congress. Here are some of the details.

According to the Conference Report, report number 115-466 (Dec. 15, 2017), the text of the Senate amendment -- modifying the NOL carryback rule -- was supposedly worded to be effective for tax years that begin after December 31, 2017. The Report implies that the Conference Agreement version of the text supposedly followed the Senate version on that point.

As you noted, regardless of where (or why) the foul-up occurred, the actual text passed by both houses (and, on December 22, 2017, signed into law by the President) provides that the modification of the carryback rule (eliminating the NOL carryback in most cases) applies to tax years that end after December 31, 2017. That's Public Law no. 115-97, sec. 13302(b)(1)(A) and sec. 13302(e)(2), 131 Stat. 2054, at 2122 and 2123, respectively (Dec. 22, 2017).

OK, I checked. It does appear that the U.S. House of Representatives has a proposal for an amendment to House of Representatives Bill 88 (H.R. 88) in the form of a proposed House amendment to the Senate amendment to H.R. 88, which would consist of two "Divisions," the first of which would be Division A, the proposed "Retirement, Savings and Other Tax Relief Act of 2018".

Section 501 of Division A is entitled "TECHNICAL AMENDMENTS RELATING TO PUBLIC LAW 115-97."

Subsection (c) of section 501, if enacted, would amend section 13302(e)(2) of Public Law 115-97 by striking the word "ending" and inserting the word "beginning".

This proposal came on Monday, November 26. The fact that this proposal is supported by Congressman Brady, the Chairman of the House Ways and Means Committee, gives it at least some measure of possibility for passage.

Very much appreciated, LW25!!

Coincidentally, I just read my daily Checkpoint Newsstand e-mail.

HOUSE CANCELS TAX BILL VOTE THIS WEEK

House leadership on December 3 decided not to hold any votes on the Retirement, Savings, and Other Tax Relief Act of 2018 (H.R. 88; see "House postpones tax bill vote"), following the death of former President George H.W. Bush on November 30. The bill includes tax extenders, retirement savings provisions, disaster tax relief, IRS reform legislation, and several technical corrections to the Tax Cuts and Jobs Act (P.L. 115-97).

This week, the Congressional schedule was upended by the death of the senior Bush. President Trump has declared a day of mourning on December 5, with the closure of federal offices. The delay on a vote on the tax bill may also be due to Republican leaders looking for time to rally GOP members around the tax package. Numerous lawmakers were absent for a scheduled vote on the measure on November 30. However, it remains unknown if there is even enough support for the bill among House GOP rank and file members.

There is no word on when a vote on the package might be held.

In addition, leadership reached agreement on a 2-week continuing resolution to keep the government funded when the current budget expires on December 7. Several lawmakers have suggested that the major spending bill, which is still under negotiation, could serve as a vehicle for a drastically watered down version of the tax bill, which appears to have little support in the Senate, even among Republicans.

[ . . . ] drastically watered down version of the tax bill, which appears to have little support in the Senate, even among Republicans.

Hmmm...

..........Oh well......