IRS to Consider Relief from Double Taxation Related to Transition Tax
On January 17, the IRS announced that it was aware of certain circumstances under which a taxpayer may be subject to double taxation as a result of the so-called transition tax under section 965. For example, where a corporation paid an unusual dividend for business reasons, double taxation may result if the same E&P of the foreign corporation are taxed both as dividends and under section 965. The announcement provides that the IRS will consider relief in cases where the application of foreign tax credits do not significantly reduce the resulting tax, and taxpayers may raise this issue with the IRS by contacting the Office of Associate Chief Counsel (International).
Read more: IRS willing to consider requests for relief from double taxation related to repatriation.