Tax Reform Act

Tax Reform Act - Terminates the special tax treatment accorded Domestic International Sales Corporations under the Internal Revenue Code for any taxable year after December 31, 1974.

Repeals the allowance for percentage depletion in the case of foreign oil and gas wells. Authorizes a taxpayer to revoke his election to deduct as expenses intangible drilling and development costs in the case of foreign oil and gas wells for taxable years after December 31, 1973.

Provides a formula for the reduction of the allowable credit for foreign taxes attributable to foreign oil and gas extraction income.

Defines the terms "foreign oil and gas extraction income" and "foreign oil related income" for the purposes of this Act.

Revises the formula for the recapture of foreign oil-related loss.

Provides for the phasing out of the percentage depletion allowance by reducing the present 22 percent rate to 8 percent for taxable year 1975 and to 0 percent for the taxable years thereafter, except that the taxpayer may elect a 15 percent depletion allowance with respect to that part of his average daily production of domestic crude oil as does not exceed 3,000 barrels. Provides that only one such allowance shall be available to related (parent-subsidiary or brother-sister) corporations. Excepts domestic stripper wells from the depletion allowance phaseout, providing that the depletion allowance for such wells shall be 15 percent. Exempts regulated natural gas and natural gas sold under fixed contract from the percentage depletion phaseout, except when the price of such gas equals or exceeds specified average prices.

Provides that the sum of the items of tax preference on which is imposed the 10 percent minimum shall be reduced to that amount of tax preference items exceeding $10,000 (present ceiling is $30,000).

Provides that the depletion allowance for geothermal energy deposits shall be 22 percent.