Tax Tuesday

Its no secret I enjoy income tax. And here's a quick example of why.
Section 172(a) provides for the carryover and carryback of net operating losses. Net operating losses are defined in 172(b) the excess of deductions over gross income. It gets interesting (or more interesting) in the second sentence of 172(b) which says:

"Such excess shall be computed with the modifications specified in subsection (d)."

So naturally we read 172(d). The first modification under subsection (d) says (and I'm not joking here):

"No net operating loss deduction shall be allowed." (172(d)(1))

Wow. I'll just let that sink in for a minute....
To the untrained eye, this seems out of place in a section devoted to allowing taxpayers to reap the benefit of deductions for net operating losses in years when they have taxable income which to offset. But right in the middle of the section we have a rather straight-forward statement that no operating loss deduction shall be allowed. And when the IRS says "shall," they mean business.
My explanation is that 172(d)(1) as applied to the defintion of net operating losses simply says that no deduction will be allowed for the year in which the net operating loss deductions would exceed taxable income. This seems to work, but my copy of The Statute doesn't have any Treasury Regulations relating to 172 (none may exist) with which I might check my answer.
Regardless of what 172(d)(1) actually means, it adds to the overall aesthetic of The Statute, a tome without peer.