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Determining the Amount of Taxes Paid for Purposes of the Foreign Tax Credit

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Internal Revenue Service (IRS), Treasury.


Correcting amendment.


This document contains amendments to correct errors in final and temporary regulations (TD 9536) that were published in the Federal Register on Monday, July 18, 2011, providing guidance relating to the determination of the amount of taxes paid for purposes of the foreign tax credit. These regulations address certain highly structured arrangements that produce inappropriate foreign tax credit results. The regulations affect individuals and corporations that claim direct and indirect foreign tax credits.


This correction is effective on August 30, 2011 and is applicable beginning July 18, 2011.

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Jeffery Cowan, (202) 622-3850 (not a toll-free number).

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The temporary and final regulation (TD 9536) that is the subject of this correction is under section 901 of the Internal Revenue Code.

Need for Correction

As published July 18, 2011 (76 FR 42036), TD 9536 contains errors that may prove to be misleading and is in need of clarification.

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List of Subjects in 26 CFR Part 1

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Correction of Publication

Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:

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Authority: 26 U.S.C. 7805 * * *

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Income, war profits, or excess profits tax paid or accrued.
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(e) * * *

(5) * * *

(iv) * * *

(B) * * *

(1) * * *

(iii) [Reserved]. For further guidance, see § 1.901-2T(e)(5)(iv)(B)(1)(iii).

* * * * *

(h) * * *

(3) [Reserved]. For further guidance, see § 1.901-2T(h)(3).

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Income, war profits, or excess profits tax paid or accrued.

(a) through (e)(5)(iv)(B)(1)(ii) [Reserved]. For further guidance, see § 1.901-2(a) through (e)(5)(iv)(B)(1)(ii).

(iii) A foreign payment attributable to income of the entity, within the meaning of § 1.901-2(e)(5)(iv)(B)(1)(ii), also includes a withholding tax (within the meaning of section 901(k)(1)(B)) imposed on a dividend or other distribution (including distributions made by a pass-through entity or an entity that is disregarded as an entity separate from its owner for U.S. tax purposes) with respect to the equity of the entity.

(2) through (h)(2) [Reserved]. For further guidance, see § 1.901-2(e)(5)(iv)(B)(2) through (h)(2).

(h)(3) Effective/applicability date. This section applies to foreign payments that, if such payments were an amount of tax paid, would be considered paid or accrued under § 1.901-2(f) on or after July 14, 2011.

(h)(4) Expiration date. The applicability of this section expires on July 14, 2014.

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Treena V. Garrett,

Federal Register Liaison, Publication and Regulations Branch, Legal Processing Division, Associate Chief Counsel, (Procedure and Administration).

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[FR Doc. 2011-22065 Filed 8-29-11; 8:45 am]