Foreign Tax Credit: Notification of Foreign Tax Redeterminations

Section 905(c) requires that a taxpayer notify the Internal Revenue Service of a change in the taxpayer's foreign income tax liability that may affect its foreign tax credit. Regulation section 1.905-4 provides rules concerning the time, manner, and contents of such notification. Should the taxpayer fail to notify the IRS, penalties under section 6689 may be imposed. Respondents are U.S. taxpayers that claim a foreign tax credit under section 901, 902, or 960. New regulations at §§1.905-1(c)(3) and 1.905-1(d)(4), issued under TD 9959, allow taxpayers to make an election to claim a provisional foreign tax credit for a contested foreign income tax liability to the extent that the taxpayer has paid the contested tax to the foreign country. These new final regulations require taxpayers who make the election to file an annual notification with the IRS notifying the IRS whether the contest is ongoing or whether it’s been resolved.

The latest form for Foreign Tax Credit: Notification of Foreign Tax Redeterminations expires 2027-05-31 and can be found here.

Foreign Tax Redeterminations

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