Partner Amanda Varma authored an article titled, "Foreign Tax Credit Considerations After Notice 2023-55" for Bloomberg Tax Management International Journal.
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 remains to be seen whether the government will expand either the applicability date of the notice, the scope, or both. At the same time, the government and taxpayers are confronting new foreign tax credit questions due to global and US developments, including questions about the credibility of foreign taxes likely to be enacted consistent with the OECD's Pillar 2 aspects as well as questions about the foreign tax credit provisions of the corporate alternative minimum tax.
Read the article at Bloomberg Tax Management International Journal
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