To amend the Internal Revenue Code of 1986 to make the credit for prior year minimum tax liability refundable for individuals after a period of years, to require returns with respect to certain stock options, and for other purposes.

July 21, 2005

Mr. SAM JOHNSON of Texas (for himself, Mr. NEAL of Massachusetts, Mr. MCCRERY, Mr. JEFFERSON, Mr. RAMSTAD, Mr. SHAW, Mrs. JOHNSON of Connecticut, Mr. ENGLISH of Pennsylvania, Ms. ZOE LOFGREN of California, Mr. SIMMONS, Mr. HONDA, Mr. MCCAUL of Texas, Mr. PAUL, and Mr. GERLACH) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to make the credit for prior year minimum tax liability refundable for individuals after a period of years, to require returns with respect to certain stock options, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `AMT Credit Fairness Act of 2005'.

SEC. 2. CREDIT FOR PRIOR YEAR MINIMUM TAX LIABILITY MADE REFUNDABLE AFTER PERIOD OF YEARS.

(a) In General- Section 53 of the Internal Revenue Code of 1986 (relating to credit for prior year minimum tax liability) is amended by adding at the end the following new subsection:

`(e) Special Rule for Individuals With Long-Term Unused Credits-

`(1) IN GENERAL- If an individual has a long-term unused minimum tax credit for any taxable year, the amount determined under subsection (c) for such taxable year shall not be less than an amount equal to the greater of--

`(A) the lesser of--

`(i) $5,000, or

`(ii) the amount of such credit, or

`(B) 20 percent of the amount of such credit.

`(2) LONG-TERM UNUSED MINIMUM TAX CREDIT-

`(A) IN GENERAL- For purposes of this subsection, the term `long-term unused minimum tax credit' means, with respect to any taxable year, the portion of the minimum tax credit determined under subsection (b) attributable to the adjusted net minimum tax for taxable years before the 3rd taxable year immediately preceeding such taxable year.

`(B) FIRST-IN, FIRST-OUT ORDERING RULE- For purposes of subparagraph (A), credits shall be treated as allowed under subsection (a) on a first-in, first-out basis.

`(3) CREDIT REFUNDABLE- For purposes of this title (other than this section), the credit allowed by reason of this subsection shall be treated as if it were allowed under subpart C.'.

(b) Conforming Amendment- Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting `or 53(e)' after `section 35'.

(c) Effective Date- The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.

SEC. 3. RETURNS REQUIRED IN CONNECTION WITH CERTAIN OPTIONS.

(a) In General- So much of section 6039(a) of the Internal Revenue Code of 1986 as follows paragraph (2) is amended to read as follows:

`shall, for such calendar year, make a return at such time and in such manner, and setting forth such information, as the Secretary may by regulations prescribe.'.

(b) Statements to Persons With Respect to Whom Information Is Furnished- Section 6039 of such Code is amended by redesignating subsections (b) and (c) as subsection (c) and (d), respectively, and by inserting after subsection (a) the following new subsection:

`(b) Statements to Be Furnished to Persons With Respect to Whom Information Is Reported- Every corporation making a return under subsection (a) shall furnish to each person whose name is set forth in such return a written statement setting forth such information as the Secretary may by regulations prescribe. The written statement required under the preceding sentence shall be furnished to such person on or before January 31 of the year following the calendar year for which the return under subsection (a) was made.'.

(c) Conforming Amendments-

(1) Section 6724(d)(1)(B) of such Code is amended by striking `or' at the end of clause (xvii), by striking `and' at the end of clause (xviii) and inserting `or', and by adding at the end the following new clause:

`(xix) section 6039(a) (relating to returns required with respect to certain options), and'.

(2) Section 6724(d)(2)(B) of such Code is amended by striking `section 6039(a)' and inserting `section 6039(b)'.

(3) The heading of section 6039 of such Code and the item relating to such section in the table of sections of subpart A of part III of subchapter A of chapter 61 of such Code are each amended by striking `Information' and inserting `Returns'.

(4) The heading of subsection (a) of section 6039 of such Code is amended by striking `Furnishing of Information' and inserting `Requirement of Reporting'.

(d) Effective Date- The amendments made by this section shall apply to calendar years beginning after the date of the enactment of this Act.

END