IRS Stresses Amended Returns Need Consistency on Foreign Taxes

Consistency is the key when a taxpayer amends its returns to change how it treats foreign taxes, even when the statute of limitations might work in its favor, the IRS indicated Friday.

The ruling from the IRS Office of Chief Counsel involves a taxpayer that wanted to amend its tax returns to claim foreign tax credits instead of deductions for foreign taxes paid. The amended returns led to the taxpayer owing taxes in some years and due refunds in other years. But the taxes-due years were past the statute of limitations for the IRS to collect, and the agency refused ...