IRS Foreign Tax Credit Regulations and Recent Guidance: New Income-Sourcing Standard, Digital Service Taxes, FDII

Recording of a 90-minute premium CLE/CPE video webinar with Q&A

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Conducted on Wednesday, March 23, 2022

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Course Materials

This CLE/CPE webinar will provide tax professionals with an in-depth analysis of IRS final foreign tax credit regulations and recently issued guidance. The panel will discuss new income-sourcing standards, the impact on digital services taxes, rules relating to foreign-derived intangible income (FDII), determination of foreign income taxes subject to the provisions of Section 245A(d), sourcing of inclusions under Sections 951, 951A, and 1293, and other critical issues.

Description

On Jan. 4, 2022, the U.S. Treasury Department and the IRS released final regulations and guidance concerning determining allowable foreign tax credits, allocating those tax credits, new income-sourcing standards, and clarification on other vital issues. These regulations and recent guidance are critical to foreign tax planning and compliance, requiring tax practitioners to align planning methods with the new rules.

The final regulations guide practitioners on many technical issues for applying for the foreign tax credit. The final rules provide clarity on critical issues. Others need further guidance, such as (1) ensuring that the newly modified income-sourcing standards align with taxpayer's current tax compliance and planning methods, (2) rules relating to FDII and how these new regulations are applied, (3) determination of foreign income taxes subject to the provisions of Section 245A(d), (4) sourcing of inclusions under Sections 951, 951A, and 129, and (5) rules for the allocation and apportionment of certain expenses and for assigning foreign income taxes to different income groups for various purposes.

These final regulations are critical to U.S. taxpayers applying the foreign tax credit and resolving foreign tax audits.

Listen as our panel discusses the final regulations and recent guidance for the foreign tax credit, tax planning for foreign income, the allocation of expenses, assigning foreign taxes to baskets and income groups, rules relating to FDII, sourcing of inclusions under Sections 951, 951A, and 1293, and other essential issues.

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Outline

  1. Key provisions of the IRS final FTC regulations and guidance
  2. Challenges in allocating and assigning foreign taxes to baskets and income groups
  3. Sourcing of inclusions under Sections 951, 951A, and 1293
  4. FDII rules and clarifications from recent FTC guidance
  5. Applicability of Section 245A(d)
  6. Pitfalls to avoid and effective tax planning tactics in light of final regulations

Benefits

The panel will review these and other key issues:

  • What are the critical provisions of the IRS final regulations impacting foreign tax planning?
  • What are the key provisions of recent IRS guidance?
  • What are the key provisions clarifying rules relating to FDII?
  • What issues do the final regulations leave unresolved?
  • What are the challenges of allocating and assigning foreign taxes to baskets and income groups?
  • What are the issues associated with foreign tax redeterminations and methods to overcome them?
  • What are the issues associated with sourcing inclusions under Sections 951, 951A, and 1293?
  • What are the issues associated with foreign income taxes subject to Section 245A(d)?

Faculty

Acosta, Rolando
Rolando J. (RJ) Acosta
Senior Manager
Ernst & Young

Mr. Acosta is an international tax specialist focused on the cross-border activities of private companies, investors,...  |  Read More

Asali, Layla
Layla J. Asali
Member
Miller & Chevalier

Ms. Asali practices in a broad range of federal income tax matters, including domestic and cross-border corporate...  |  Read More

Masciangelo, Michael
Michael Masciangelo
Senior Client Executive
BDO USA

Mr. Masciangelo is responsible for international tax strategy development, including working with the firm’s U.S....  |  Read More

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