Keeping CPAs Up to Date on Tax Matters

A site devoted to articles on current developments in federal taxes geared toward CPAs in tax practice.

Fact that Taxpayer Might Have to Repay Taxes Received Back From UK Did Not Make the Payment Not a Refund

May 02, 2017 by Ed Zollars, CPA

In the case of Sotiropoulos v. Commissioner, TC Memo 2017-75 argued that amounts she received from the United Kingdom for claims she submitted related to what the UK government was claiming in UK courts as tax shelters were not tax refunds. She noted that the UK government was challenging those shelters in court and she believed it was likely she would need to repay those funds.

When a taxpayer claims a foreign tax credit under IRC §905(c)(1), she is required to notify the IRS of any later refund of some or all of the taxes used to compute the credit pursuant to IRC §905(c)(3), normally by filing an amended return.

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Cash Basis Taxpayer Who Has Not Elected Accrual Option for Foreign Tax Credit Reports Later Assessment for Credit Purposes in Year Paid

August 28, 2015 by Ed Zollars, CPA

How taxpayers should deal with changes in the determination of foreign taxes due for purposes of the foreign tax credit was discussed in Chief Counsel Email 201534013. Specifically, the question arose regarding a taxpayer on the cash basis of accounting who has not elected to report the foreign tax credit on the accrual basis that faced an additional assessment of foreign tax related to a prior year.