Most tax professionals are aware of the limitations imposed on the utilization of foreign tax credits
Court of Appeals for the Second Circuit upholding the disallowance of foreign tax credits
claimed by other corporate entities not affiliated with the company.
tax return claimed $50 billion in foreign tax credits
, an all-time high for this credit and increase of over $7.
taxpayers with foreign counterparts to generate foreign tax credits
The IRS has released proposed regulations that would disallow foreign tax credits
for foreign taxes purportedly paid in connection with certain artificially engineered, highly structured transactions.
profits in this structure), the foreign tax credits
applicable to such foreign dividends paid into the United States are likely to be reduced, potentially resulting in an additional U.
The purpose of this FTCL is to prevent foreign tax credits
from reducing U.
Finally, new tax-based opportunities exist to maximize the dollar value of foreign tax credits
and repatriated earnings.
The current foreign tax credit
rules often result in double taxation and leave many taxpayers with excess foreign tax credits
The notice provides guidance on the application of the new look-through rules and the transition from the previous treatment The transition issues addressed include the carryover and carry-back of excess foreign tax credits
and the treatment of separate limitation losses and overall foreign losses.
In January and March of 1998 the IRS issued temporary regulations (TD 8751 and 8766) changing the SRLY provisions for general business credits, minimum tax credits, foreign tax credits
and overall foreign losses.
As previously disclosed, the company determined during fiscal 2006 that it was necessary to establish a valuation allowance related to deferred tax assets for its foreign tax credits