Provisional Foreign Tax Credit Agreement

Forms and Documents

Document Name	Status
Supporting Statement for 1.905-1(d)(4).docx Supporting Statement A	2020-11-02

IC Document Collections

IC ID	Document Title	Status
243640	Provisional Foreign Tax Credit Agreement	New

ICR Details

OMB Control No: 1545-2296	ICR Reference No: 202009-1545-007
Status: Historical Inactive	Previous ICR Reference No:
Agency/Subagency: TREAS/IRS	Agency Tracking No:
Title: Provisional Foreign Tax Credit Agreement
Type of Information Collection: New collection (Request for a new OMB Control Number)	Common Form ICR:  No
Type of Review Request: Regular
OIRA Conclusion Action: Comment filed on proposed rule	Conclusion Date: 01/14/2021
	Date Received in OIRA: 11/12/2020
Terms of Clearance: OMB files this comment in accordance with 5 CFR 1320.11(c). This OMB action is not an approval to conduct or sponsor an information collection under the Paperwork Reduction Act of 1995. This action has no effect on any current approvals. If OMB has assigned this ICR a new OMB Control Number, the OMB Control Number will not appear in the active inventory. For future submissions of this information collection, reference the OMB Control Number provided. Pursuant to 5 CFR 1320.11(c), OMB files this comment on this information collection request (ICR). The agency shall examine public comment in response to the NPRM and will describe in the supporting statement of its next collection any public comments received regarding the collection as well as why (or why it did not) incorporate the commenter’s recommendation. The next submission to OMB must include the draft final rule.

	Inventory as of this Action	Requested	Previously Approved
Expiration Date		36 Months From Approved
Responses	0	0	0
Time Burden (Hours)	0	0	0
Cost Burden (Dollars)	0	0	0

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Abstract: Section 901(a) allows a taxpayer to claim a foreign tax credit for foreign income taxes paid or accrued in a taxable year, depending on taxpayer’s method of accounting for such taxes. Section 461(f) (flush language), §1.461-2(a)(2)(i), and proposed §1.905-1(d)(3) provide that a foreign income tax that is contested does not accrue and is not creditable until the contest is resolved. However, proposed §1.905-1(d)(4) allows taxpayers to make an election to claim a provisional foreign tax credit for contested taxes to the extent that the taxpayer has paid the contested tax to the foreign country. As a condition for making this election, the taxpayer must enter into a provisional foreign tax credit agreement, in which the taxpayer gives the IRS information regarding the contested tax and agrees to comply with the conditions of the election, including waiving the statute of limitations on assessment by the IRS with respect to the contested taxes for a period of three years from the year in which taxpayer notifies the IRS of the resolution of the contest. See proposed §1.905-1(d)(4)(ii).

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Authorizing Statute(s): US Code: 26 USC 461 Name of Law: General rule for taxable year of deduction
   US Code: 26 USC 901 Name of Law: Taxes of foreign countries and of possessions of United States
  

Citations for New Statutory Requirements: US Code: 26 USC 1.905-1(d)(4) Name of Law: When credit for taxes may be taken.

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Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
1545-BP70	Proposed rulemaking	85 FR 72078	11/12/2020

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Federal Register Notices & Comments

Did the Agency receive public comments on this ICR? No

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Number of Information Collection (IC) in this ICR: 1

IC Title	Form No.	Form Name
Provisional Foreign Tax Credit Agreement

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Burden increases because of Program Change due to Agency Discretion: No

Burden Increase Due to:

Burden decreases because of Program Change due to Agency Discretion: No

Burden Reduction Due to:

Short Statement: The proposed regulations contain collections of information that are not on existing IRS forms. The IRS is making this submission to request a new OMB approval, therefore there is an increase in burden of 3,000 hours and 1,500 responses/respondents.

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Annual Cost to Federal Government:

Does this IC contain surveys, censuses, or employ statistical methods? No

Does this ICR request any personally identifiable information (see OMB Circular No. A-130 for an explanation of this term)? Please consult with your agency's privacy program when making this determination.     Yes

Does this ICR include a form that requires a Privacy Act Statement (see 5 U.S.C. §552a(e)(3))? Please consult with your agency's privacy program when making this determination.     No

Is this ICR related to the Affordable Care Act [Pub. L. 111-148 & 111-152]? No

Is this ICR related to the Dodd-Frank Wall Street Reform and Consumer Protection Act, [Pub. L. 111-203]? No

Is this ICR related to the American Recovery and Reinvestment Act of 2009 (ARRA)? No

Is this ICR related to the Pandemic Response? No

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Common Form ICR:  No

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On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).

The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:

(a) It is necessary for the proper performance of agency functions;

(b) It avoids unnecessary duplication;

(c) It reduces burden on small entities;

(d) It uses plain, coherent, and unambiguous language that is understandable to respondents;

(e) Its implementation will be consistent and compatible with current reporting and recordkeeping practices;

(f) It indicates the retention periods for recordkeeping requirements;

(g) It informs respondents of the information called for under 5 CFR 1320.8 (b)(3) about:

(i) Why the information is being collected;

(ii) Use of information;

(iii) Burden estimate;

(iv) Nature of response (voluntary, required for a benefit, or mandatory);

(v) Nature and extent of confidentiality; and

(vi) Need to display currently valid OMB control number;

(h) It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to be collected.

(i) It uses effective and efficient statistical survey methodology (if applicable); and

(j) It makes appropriate use of information technology.

If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.

Certification Date: 11/12/2020

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