A study by Grant Thornton found that only 843 U.S. corporations out of nearly 10,000 took advantage of a one-time dividend deduction that rewarded them for repatriating their foreign profits, giving them deductions totaling $265 billion.
As part of the American Jobs Creation Act of 2004, Congress tried to encourage U.S. corporations to repatriate foreign earnings by allowing them to deduct 85 percent of the qualifying dividends received from the foreign corporations they controlled. Foreign earnings are generally not taxed until they are repatriated, but can be taxed as high as the top corporate rate of 35 percent when paid as dividends to U.S. corporations.
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