IRS Fixes to Foreign Tax Credit Rules Could Boost New Virus Perk

Multinationals want the IRS to adjust foreign tax credit rules so that the benefits of a new stimulus perk aren’t eroded.

The first virus response package restored a net operating loss carry back provision that lets companies generate tax refunds by offsetting taxable income from previous years.

The problem is that proposed foreign tax credit rules, released in December 2019, don’t allow companies to calculate the NOL benefit based on income categories that existed before the 2017 tax law passed.

That means any company that’s benefited from a 2017 tax law deduction for income earned from exports, called the foreign-derived ...