IRS may offer Section 965 double taxation relief

Tax Hot Topics newsletterIn a news release (IR 2020-16) issued on Jan. 17, the IRS announced that it is willing to consider requests for relief from double taxation resulting from unique circumstances. These unique circumstances include, for example, where the same earnings and profits of a foreign corporation are taxed both as dividends and under Section 965, as amended by the Tax Cuts and Jobs Act. 

The IRS did not provide a listing of fact patterns where double taxation may occur, but one possibility may include situations where a taxpayer with a Section 965 inclusion year of Nov. 30, 2018, paid a dividend between Nov. 2, 2017, and Nov. 30, 2017. The IRS provided that it is open to considering relief from such double taxation where there is no significant reduction in the resulting tax by application of foreign tax credits, such that the taxpayer would be required to pay more tax than if the dividend had not been paid. Taxpayers that believe they have a fact pattern that fits the general circumstances described in the press release have been asked to raise the issue with the IRS by contacting the Associate Chief Council (International). 
David Sites
Washington National Tax Office 
T +1 202 861 4104

David Zaiken
Managing Director
Washington National Tax Office 
T +1 202 521 1543

Cory Perry
Senior Manager
Washington National Tax Office 
T +1 202 521 1509

Yasmin Dirks
Washington National Tax Office 
T +1 202 521 1506

Mike Del Medico
Washington National Tax Office 
T +1 202 521 1522
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