A bill to amend the Internal Revenue Code of 1954 to deny treatment as a foreign tax payment to any royalty payment made in connection with the extraction of oil or gas from a foreign country and to provide a means of determining what part of any payment constitutes the payment of a royalty.

States that royalties shall not be included in the definition of income war profits, and excess profits taxes as creditable taxes in the case of taxes paid or accrued to any foreign country with respect to income derived from the extraction, production, or refining of oil or gas in such country.

States in regard to transitional rules for carrybacks and carryovers, relating to income from without the United States, that whenever pre 1974 taxes are deemed to be post-1973 taxes, the pre-1974 taxes shall be redetermined as if those provisions applied to the taxable year in which the pre-1974 taxes were paid or accrued.