IRS Practice Unit: Calculating Foreign Tax Redetermination of Foreign Tax Credit (IRC §905)

Understanding key concepts in order to properly calculate of the foreign tax credit (FTC) redeterminations, the IRS Large Business and International Concept Unit outlined in a practice unit released June 30. A foreign tax redetermination occurs when there is a change in a taxpayer’s foreign tax liability that affects the taxpayer’s FTC previously, the IRS noted. Taxpayers are responsible to report a foreign tax redetermination within the time frame to report such an event. Under tax code Section 905(c)(1) three main types of foreign tax changes that result in a foreign tax redetermination (1) taxes when paid or later ...