The Internal Revenue Service released its summer 2008 Statistics of Income Bulletin, featuring tax year 2005 data on the growth of profits and tax liability at foreign-controlled domestic corporations.

There were 61,820 foreign-controlled domestic corporations as of 2005, accounting for 1.1 percent of the total of all U.S. corporations. However, FCDCs generated $3.5 trillion of total receipts with $9.2 trillion of total assets, accounting for 13.7 percent of receipts and 13.9 percent of assets reported on all U.S. corporation income tax returns.

Profits, or net income less deficit, reported by FCDCs for tax purposes were $165.2 billion, an 81.9 percent increase from the $90.8 billion reported in 2004. The U.S. tax liability for FCDCs, total income tax after credits, was $42.4 billion for 2005, a 41.7 percent increase since 2004.

For tax year 2004, foreign corporations controlled by U.S. multinational corporations held $9.2 trillion in assets and reported $3.8 trillion in receipts. That same year, corporations claimed foreign tax credits worth $56.6 billion, representing an all-time high and a 13.2 percent increase over the previous high amount in 2003. Use of this credit reduced their U.S. tax on worldwide income by 30.2 percent, from $187.5 billion to $130.9 billion.

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