Treasury Hits Pause on Imposing New Foreign Tax Credit Rules (3)

Taxpayers can temporarily go back to following the former rules on the foreign tax credit in most respects, while the IRS considers whether to modify its newer, controversial standards for claiming the credit.

The surprise move, which the IRS announced in a notice Friday, (Notice 2023-55), is a boost for companies that have complained that the IRS’s 2021 rules overhauling the use of the credit are too strict. Many have complained that the new rules would prevent them from crediting some of the foreign taxes toward their US tax bills, even in cases where they’d previously been allowed to ...