Determining Amount of Taxes Paid for Purposes of Foreign Tax Credits:

Federal Register Volume 76, Number 168 (Tuesday, August 30, 2011)

Rules and Regulations

Page 53819

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

FR Doc No: 2011-22065

DEPARTMENT OF THE TREASURY

Internal Revenue Service 26 CFR Part 1

TD 9536

RIN 1545-BK40

Determining the Amount of Taxes Paid for Purposes of the Foreign

Tax Credit

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

SUMMARY: 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.

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

FOR FURTHER INFORMATION CONTACT: Jeffery Cowan, (202) 622-3850 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

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.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

Correction of Publication

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

PART 1--INCOME TAXES 0

Paragraph 1. The authority citation for part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * * 0

Par. 2. Section 1.901-2 is amended by adding paragraphs

(e)(5)(iv)(B)(1)(iii) and (h)(3) to read as follows:

Sec. 1.901-2 Income, war profits, or excess profits tax paid or accrued.

* * * * *

(e) * * *

(5) * * *

(iv) * * *

(B) * * *

(1) * * *

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

* * * * *

(h) * * *

(3) [Reserved]. For further guidance, see Sec. 1.901-2T(h)(3). 0

Par. 3. Section 1.901-2T is added to read as follows:

Sec. 1.901-2T Income, war profits, or excess profits tax paid or accrued.

(a) through (e)(5)(iv)(B)(1)(ii) [Reserved]. For further guidance, see Sec. 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 Sec. 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 Sec. 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 Sec. 1.901-2(f) on or after

July 14, 2011.

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

Treena V. Garrett,

Federal Register Liaison, Publication and Regulations Branch, Legal

Processing Division, Associate Chief Counsel, (Procedure and

Administration).

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

BILLING CODE 4830-01-P

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