To provide for income tax treatment relating to certain losses arising from, and grants made as a result of, the September 11, 2001, terrorist attacks on New York City.

February 9, 2005

Mr. NADLER introduced the following bill; which was referred to the Committee on Ways and Means

To provide for income tax treatment relating to certain losses arising from, and grants made as a result of, the September 11, 2001, terrorist attacks on New York City.

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 `September 11th Tax Correction Act'.

SEC. 2. TREATMENT OF RETENTION GRANTS AND CERTAIN LOSSES ARISING FROM SEPTEMBER 11, 2001, TERRORIST ATTACKS ON NEW YORK CITY.

(a) Retention Grants- Retention grants paid from Federal community development block grant funds for assistance for properties or businesses damaged by, or for economic revitalization related to, the September 11, 2001, terrorist attacks on New York City shall, to the extent not otherwise excluded from income tax under the internal revenue laws of the United States--

(1) not be includible in gross income under the Internal Revenue Code of 1986, and

(2) not be subject to information reporting under such Code.

(b) Deductions- Section 265 of the Internal Revenue Code of 1986 shall not apply with respect to grants described in subsection (a).

(c) Waiver of Limitations- If the credit or refund of any overpayment of tax resulting from the application of subsections (a) and (b) is prevented at any time by the operation of any law or rule of law (including res judicata), such credit or refund may nevertheless be allowed or made if the claim therefor is filed before the close of the 1-year period beginning on the date of the enactment of this Act.

END