OMB’s Office of Information and Regulatory Affairs (OIRA) has completed its review of proposed regulations from the U.S. Treasury Department concerning the net operating loss (NOL) deduction.
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.
OIRA reported its review of the proposed regulations was completed on March 11, 2020. OIRA has identified and briefly described the regulations, as follows:
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.
Treasury regulations that are identified as “major” regulations are subject to review by OMB’s OIRA before being issued, pursuant to Executive Order 13771. Now that OIRA review has been completed, Treasury and the IRS can be expected to release these proposed regulations for publication in the Federal Register—the exact date of publication not being known.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.