Foreign Tax Credit
Model Treaty Provisions
U.S. Model
Treaty, Article 23 (Relief from Double Taxation)
Court Decisions
Riggs
National Corporation, et al. v. Commissioner, T.C. Memo. 2004-110 (foreign
tax credits allowed, in part, for Brazilian taxes withheld by Central Bank)
Compaq Computer Corp. v. Commissioner,
277 F.3d 778 (5th Cir. 2001), rev'g 113 T.C. 214 (1999) (ADR
transactions
had both economic substance and business
purpose)
IES Industries, Inc. v. United States,
253 F.3d 350 (8th Cir. 2001), rev'g in part, aff'g in part, and remanding
2001-2 U.S. Tax Cas. (CCH) ¶50470 (N.D. Iowa 1999) (ADR transactions had both
economic substance and business purpose)
Compaq Computer Corp. v. Commissioner,
113 T.C. 363 (1999) (UK advance corporation tax)
Exxon Corp. v. Commissioner, 113 T.C.
338 (1999) (section 901; UK petroleum revenue tax is creditable income tax)
AMP, Inc. v. United States, 99-2 U.S.
Tax Cas. (CCH) ¶50,728 (Fed. Cir. 1999), rev'g 40 Fed. Cl. 172 (1998)
(section 905(c))
First Chicago
Corp. v. Commissioner, 135 F.3d 457 (7th Cir. 1998), aff'g 96 T.C.
421 (1991) (section 902 voting stock ownership requirement)
Fluor Corp. v. United States, 126 F.3d
1397 (Fed. Cir. 1997), rev'g 35 Fed. Cl. 520 (1996) (section 6601;
accrual of underpayment interest in connection with foreign tax credit carryback)
Amoco Corp. v. Commissioner, T.C. Memo.
1996-159, aff'd, 138 F.3d 1139 (7th Cir. 1998) (section 901)
Continental Illinois Corp. v. Commissioner,
998 F.2d 513 (7th Cir. 1993) (section 901; section 905)
Brunswick Corp. v. Commissioner, 100 T.C.
6 (1993) (pre-1987 section 902)
Other Materials
IRS Publication 514 -
Foreign Tax Credit for Individuals
Notice
2004-20, 2004-11 I.R.B. 608 (Abusive Foreign Tax Credit Intermediary
Transaction)
Notice
2004-19, 2004-11 I.R.B. 606 (Foreign Tax Credit Abuse)
Notice
98-5, 1998-1 C.B. 334 (Treatment of Abusive Tax-Motivated Foreign Tax Credit
Transactions) (Withdrawn by Notice 2004-19)
Illustrations
Foreign Tax Credit Formula
Foreign Tax Credit
Limitation
Effect of Section 904(d)
Baskets
Comparison of Direct and
DPCs
Deemed Paid Tax Formula
Deemed Paid Tax Example
Foreign Tax Credit Example
Rev. Rul. 71-141 Look
Through (See section 901(c)(7), enacted by the AJCA of
2004)
Relevant IRS Forms
Form 1116
Foreign Tax Credit (Individual, Estate, or Trust) (2004)
Form 1118
Foreign Tax Credit - Corporations (Rev. December 2004)
Form 1118
(Schedule
I) Reduction of Oil and Gas Extraction Taxes (Rev. December 2004)
Form 1118
(Schedule
J) Adjustments to Separate Limitation Income (Loss) Categories for
Determining Numerators of Limitation Fractions, Year-End Recharacterization
Balances, and Overall Foreign Loss Account Balances (Rev. December 2004)
Form 1118
Instructions (Rev. December
2004)
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