PUBLIC LAW 100-647—NOV. 10, 1988
102 STAT. 3707
SEC. 6077. SPECIAL ESTIMATED TAX PAYMENTS.
(a) GENERAL RULE.—Part III of subchapter L of chapter 1 of the 1986 Code (relating to provisions of general application) is amended by adding at the end thereof the following new section: "SEC. 847. SPECIAL ESTIMATED TAX PAYMENTS.
"In the case of taxable years beginning after December 31, 1987, of an insurance compeuiy required to discount unpaid losses (as defined in section 846)— "(1) ADDITIONAL DEDUCTION.—There shall be allowed as a
deduction for the taxable year, if separate estimated tax payments are made as required by paragraph (2), an amount not to exceed the excess of— "(A) the amount of the undiscounted, unpaid losses (as defined in section 846(b)) attributable to losses incurred after December 31, 1986, over "(B) the amount of the related discounted, unpaid losses determined under section 846, to the extent such amount was not deducted under this paragraph in a preceding taxable year. Section 6655 shall be applied to any taxable year without regard to the deduction allowed under the preceding sentence. "(2) SPECIAL ESTIMATED TAX PAYMENTS.—The deduction under paragraph (1) shall be allowed only to the extent that special estimated tax payments are made in an simount equal to the tax benefit attributable to such deduction, on or before the date that any taxes (determined without regard to this section) for the taxable year for which the deduction is allowed are due to be paid. If a deduction would be allowed but for the fact that special estimated tax pa3nnents were not timely made, such deduction shall be allowed to the extent such payments are made within a reasonable time, as determined by the Secretary, if all interest and penalties, computed as if this sentence did not apply, are paid. If amounts are included in gross income under paragraph (5) or (6) for any taxable year and an additional tax is due for such year (or any other year) as a result of such inclusion, an amount of special estimated tax payments equal to such additional tax shall be applied against such additional tax. If, after any such payment is so applied, there is an adjustment reducing the amount of such additional tax, in lieu of any credit or refund for such reduction, a special estimated tax payment shall be treated as made in an amount equal to the amount otherwise allowable as a credit or refund. To the extent that a special estimated tax payment is not used to offset additional tax due for any of the first 15 taxable years beginning after the year for which the payment was made, such special estimated tax payment shall be treated as an estimated tax payment made under section 6655 for the 16th year after the year for which the payment was made. (3) SPECIAL LOSS DISCOUNT ACCOUNT.—Each company which is allowed a deduction under paragraph (1) shall, for purposes of this part, establish and maintain a special loss discount account. "(4) ADDinoNS T SPECIAL LOSS DISCOUNT ACCOUNT.—There O shall be added to the special loss discount account for each taxable year an amount equal to the amount allowed as a deduction for the taxable year under paragraph (1).
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