Proposed regulations pending OIRA review: Net operating loss (NOL) deduction

Net operating loss (NOL) deduction

OMB’s Office of Information and Regulatory Affairs (OIRA) reports that it has received for review from the U.S. Treasury Department proposed regulations concerning the net operating loss (NOL) deduction.


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The 2017 tax law (Pub. L. No. 115-97, the law that is often referred to as the “Tax Cuts and Jobs Act” (TCJA)) made amendments to Code section 172(a) and section 172(b)(2) that in part limit the NOL deduction for a given year to 80% of taxable income, effective with respect to losses arising in tax years beginning after December 31, 2017. The 2017 tax law also included provisions revising the NOL carryback rules.

Treasury regulations that are identified as “major” regulations are subject to review by OMB’s OIRA before being issued, pursuant to Executive Order 13771. According to OIRA, the regulations received for review on February 18, 2020, are identified as:

These regulations are further described on the OIRA website as follows:

The regulation will provide guidance on amendments made to section 172(a) and section 172(b)(2) of the Internal Revenue Code by section 13302 of the Tax Cuts and Jobs Act, Pub. L. 115-97. The regulation will impact taxpayers that incur net operating losses after the effective date of the regulation.

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