Treasury Tries to Calm Fears Over Foreign Tax Credit Rules (2)

The Treasury Department tweaked its foreign tax credit regulations Tuesday, in what tax practitioners said was a helpful step toward addressing concerns over how the controversial new rules will be applied.

Treasury issued two sets of technical corrections Tuesday to the foreign tax credit rules it released in December (RIN 1545-BP70). The department’s aim was to alleviate some companies’ fears that a key “cost recovery” provision of the rules was too restrictive and could render some of their foreign taxes ineligible for the credit—thus making them pay taxes twice on the same income. (Read technical corrections here and here ...