TD 9959: Guidance Related to the Foreign Tax Credit; Clarification of Foreign-Derived Intangible Income

Date: 2022-01-04
Links to Federal Register: HTML, PDF (Proposed Regulation: REG-101657-20 HTML, PDF)
Document Number: 2021-27887, RIN: 1545-BP70
Action: final regulation

Abstract: This document contains final regulations relating to the foreign tax credit, including the disallowance of a credit or deduction for foreign income taxes with respect to dividends eligible for a dividends-received deduction; the allocation and apportionment of interest expense, foreign income tax expense, and certain deductions of life insurance companies; the definition of a foreign income tax and a tax in lieu of an income tax; the definition of foreign branch category income; and the time at which foreign taxes accrue and can be claimed as a credit. This document also contains final regulations clarifying rules relating to foreign-derived intangible income (FDII). The final regulations affect taxpayers that claim credits or deductions for foreign income taxes, or that claim a deduction for FDII.

Notable phrases	Frequency
foreign tax credit(s)	238
net income tax	202
foreign gross income	132
foreign tax law	115
foreign income tax(es) paid	96
statutory (and|or) residual (groupings)	82
section 245A(d) income	80
tested foreign tax	72
allocat(ed|ion) and apportion(ed|ment)	72
generally-imposed net income tax	66
jurisdictional nexus requirement	66
tax book value	46
income tax in the U.S. sense	40
attribution requirement	26
tax in lieu of an income tax	22
treasury department and the irs disagree	21
treasury department and the irs agree	12

Reg. Cites	Frequency
1.861-20	43
1.905-3	26
1.901-2	22
1.903-1	17
1.861-9	16
1.901-1(d)(2)	13
1.905-3(a)	13
1.861-20(b)	12
1.245A(d)-1	12
1.905-1(d)(5)	11
1.905-1(c)(3)	10
1.861-20(d)(3)(i)	10
1.901-2(a)(3)	10
1.905-4	9
1.901-2(a)	9
1.903-1(b)	9
1.905-1(d)(4)(iv)	9
1.901-2(b)(5)(i)(B)	8
1.960-2	8
1.960-1	8

Sec. Cites	Frequency
245A(d)	111
901	84
245A	37
904	30
245A(a)	20
903	18
960	13
960(a)	11
250	11
901(a)	11
905(c)	11
905(a)	11
818(f)	10
818(f)(1)	9
951(a)(1)(A)	9
78	7
905(c)(2)	7
959(c)(3)	7
864(c)	6

Authorities Referenced:

• Bank of America Nat. Trust & Sav. Ass'n v. U.S., 459 F.2d 513 (Ct. Cl. 1972)
• Biddle v. Commr., 302 U.S. 573 (1938)
• Bowring v. Commr., 27 B.T.A. 449 (1932)
• Cohan v. Commr., 39 F.2d 540 (2d Cir. 1930)
• Commr. v. American Metal Co., 221 F.2d 134 (1955)
• Dixie Pine Products Co. v. Commr., 320 U.S. 516 (1944)
• Dougherty v. Commr., 60 T.C. 917 (1973)
• Exxon Corp. v. Commr., 113 T.C. 338 (1999)
• Heiner v. Mellon, 304 U.S. 271 (1937)
• Helvering v. Campbell, 139 F.2d 865 (4th Cir. 1944)
• Helvering v. Reynolds, 313 U.S. 428 (1941)
• Helvering v. Wilshire Oil Co., 308 U.S. 90 (1939)
• Keasbey & Mattison Co. v. Rothensies, 133 F.2d 894 (3rd Cir. 1943)
• McCoy v. U.S., 802 F.2d 762 (4th Cir. 1986)
• Metropolitan Life Ins. Co. v. United States, 375 F. 2d 835 (Ct. Cl. 1967)
• Oklahoma Tax Com. v. Texas Co., 336 U.S. 342 (1949)
• PPL Corp. v. Commr., 569 U.S. 329 (2013)
• Santa Eulalia Mining Co. v. Commr., 2 T.C. 241 (1943)
• Schering Corp. v. Commr., 69 T.C. 579 (1978)
• Seatrain Lines, Inc. v. Commr., 46 B.T.A. 1076 (1942)
• Strong v. Willcuts, 17 AFTR 1027 (D. Minn. 1935)
• Texasgulf Inc. v. Commr., 172 F.3d 209 (2d Cir. 1999)
• United States v. Goodyear Tire & Rubber Co., 493 U.S. 132 (1989)
• W.K. Buckley, Inc., v. Commr., 158 F.2d 158 (2d Cir. 1946)
• Rev. Rul. 61-93
• Rev. Rul. 72-490
• Rev. Rul. 86-134
• Notice 2011-29

Statistics

Number of pages: 101, words: 119,083, sentences: 3,594
Average words per sentence: 33