Foreign Tax Credit Considerations After Notice 2023-55

Notice 2023-55 provides taxpayers with temporary relief from applying certain provisions of the final regulations that overhauled longstanding rules for determining whether a foreign tax is creditable (the “2022 Final Regulations”). The notice is the latest, and most significant, acknowledgment by Treasury and the IRS that the final regulations raise major issues. For the many taxpayers grappling with the new rules, the relief in the notice is very welcome. The relief is not, however, a panacea—it is temporary and leaves certain major issues unresolved. Treasury and the IRS have said they are considering extending the relief, though it ...