FEDERAL CIRCUIT: REDETERMINED FOREIGN TAXES RELATE BACK TO YEAR INCURRED, NOT WHEN FINAL

On Aug 13, 2015, the US Court of Appeals for the Federal Circuit held in Albemarle Corp., 797 F.3d 1011, that the ten-year statute of limitations that Section 6511(d)(3)(A) prescribes for filing a foreign tax credit (FTC) refund claim begins in the year to which the foreign taxes relate, rather than...

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Bibliographic Details
Published in:Journal of International Taxation 2016-01, Vol.27 (1), p.21
Main Authors: Fischl, Alan, Rosenberg, Rebecca, Harter, Chip, Collins, Marty, Anson, Tim, Sotos, David
Format: Article
Language:English
Subjects:
Federal court decisions
Foreign tax credits
Income tax returns
Income taxes
International taxation
Liability
State court decisions
Statutes of limitations
Tax credits
Tax refunds
Withholding taxes
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Summary:On Aug 13, 2015, the US Court of Appeals for the Federal Circuit held in Albemarle Corp., 797 F.3d 1011, that the ten-year statute of limitations that Section 6511(d)(3)(A) prescribes for filing a foreign tax credit (FTC) refund claim begins in the year to which the foreign taxes relate, rather than the year in which the foreign taxes are finally paid. Albemarle is significant for taxpayers that may have paid (or may be required to pay) additional foreign taxes as a result of a foreign tax audit and want to claim FTCs for those taxes on their US federal income tax return. The key issue in the case has been whether FTCs for redetermined taxes relate back to the year for which they are paid. The government cited Rev. Rul. 84-125, 1984-2 CB 125, arguing that a contested foreign tax accrues in the tax year to which the tax relates, not in the year when the contest is resolved and the foreign tax is paid.
ISSN:1049-6378