The American Institute of CPAs has written to the Internal Revenue Service and the Treasury Department requesting them to revise their proposed regulations on foreign tax credits.

On March 29, 2007, the IRS and the Treasury issued proposed regulations that provided guidance on whether a payment is compulsory for an increase in a foreign subsidiary’s foreign tax liability due to the sharing of losses or because of a combined settlement with a foreign taxing authority. Section 901 of the Tax Code permits taxpayers to claim a credit for income taxes paid or accrued (or deemed paid under Section 902) during the tax year to any foreign country or to any possession of the United States. The tax is defined as a “compulsory payment pursuant to the authority of a foreign country to levy taxes.”

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access