A bill to amend the Internal Revenue Code of 1954 by repealing the present provisions with respect to income averaging and readopting the provisions in effect prior to 1964.

Provides that if an individual engages in an employment covering a period of 36 months or more, and the gross compensation in the taxable year is not less than 80 percent of the total compensation from such employment, then the tax attributable to any part of the individual's gross income shall not be greater than the aggregate of the taxes attributable to such part had it been included in the individual's gross income ratably over that part of the period which precedes the date of such receipt of compensation. Makes provisions for income tax averaging by a partnership. Permits similar income tax averaging with respect to the income from an invention or artistic work where the work involved covered a period of 24 months or more.

States that if the amount of back pay received by an individual during the taxable exceeds 15 percent of individual's gross income, the part of the tax attributable to the inclusion of such back pay in gross income shall not be greater than the aggregate of the increases in the taxes which would have resulted from the inclusion of the respective portions of such back pay in gross income for the taxable years to which such portions are respectively attributable.

Allows similar income tax averaging over the period of years involved with respect to compensatory damages received for patent infringement, damages for injuries under the antitrust laws.

Sets forth rules and regulations to govern and clarify the provisions of this Act. (Amends 26 U.S.C. 1301-07)