§905 — Applicable rules
12 cases·1 followed·2 distinguished·9 cited—8% support
Statute Text — 26 U.S.C. §905
The credits provided in this subpart may, at the option of the taxpayer and irrespective of the method of accounting employed in keeping his books, be taken in the year in which the taxes of the foreign country or the possession of the United States accrued, subject, however, to the conditions prescribed in subsection (c). If the taxpayer elects to take such credits in the year in which the taxes of the foreign country or the possession of the United States accrued, the credits for all subsequent years shall be taken on the same basis, and no portion of any such taxes shall be allowed as a deduction in the same or any succeeding year.
The credits provided in this subpart shall be allowed only if the taxpayer establishes to the satisfaction of the Secretary—
the total amount of income derived from sources without the United States, determined as provided in part I,
the amount of income derived from each country, the tax paid or accrued to which is claimed as a credit under this subpart, such amount to be determined under regulations prescribed by the Secretary, and
all other information necessary for the verification and computation of such credits.
If—
accrued taxes when paid differ from the amounts claimed as credits by the taxpayer,
accrued taxes are not paid before the date 2 years after the close of the taxable year to which such taxes relate, or
any tax paid is refunded in whole or in part,
the taxpayer shall notify the Secretary, who shall redetermine the amount of the tax for the year or years affected.
Except as provided in subparagraph (B), in making the redetermination under paragraph (1), no credit shall be allowed for accrued taxes not paid before the date referred to in subparagraph (B) of paragraph (1).
Any such taxes if subsequently paid—
shall be taken into account for the taxable year to which such taxes relate, and
shall be translated as provided in section 986(a)(2)(A).
The amount of tax (if any) due on any redetermination under paragraph (1) shall be paid by the taxpayer on notice and demand by the Secretary, and the amount of tax overpaid (if any) shall be credited or refunded to the taxpayer in accordance with subchapter B of chapter 66 (section 6511 et seq.).
In the case of any tax accrued but not paid, the Secretary, as a condition precedent to the allowance of the credit provided in this subpart, may require the taxpayer to give a bond, with sureties satisfactory to and approved by the Secretary, in such sum as the Secretary may require, conditioned on the payment by the taxpayer of any amount of tax found due on any such redetermination. Any such bond shall contain such further conditions as the Secretary may require.
In any redetermination under paragraph (1) by the Secretary of the amount of tax due from the taxpayer for the year or years affected by a refund, the amount of the taxes refunded for which credit has been allowed under this section shall be reduced by the amount of any tax described in section 901 imposed by the foreign country or possession of the United States with respect to such refund; but no credit under this subpart, or deduction under section 164, shall be allowed for any taxable year with respect to any such tax imposed on the refund. No interest shall be assessed or collected on any amount of tax due on any redetermination by the Secretary, resulting from a refund to the taxpayer, for any period before the receipt of such refund, except to the extent interest was paid by the foreign country or possession of the United States on such refund for such period.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.905-1 When credit for foreign income taxes may be taken
- Treas. Reg. §Treas. Reg. §1.905-1(a) Scope.
- Treas. Reg. §Treas. Reg. §1.905-1(b) General rule.
- Treas. Reg. §Treas. Reg. §1.905-1(c) Rules for cash method taxpayers—(1) Credit allowed in year paid.
- Treas. Reg. §Treas. Reg. §1.905-1(d) Rules for accrual method taxpayers—(1) Credit allowed in year accrued—(i) In general.
- Treas. Reg. §Treas. Reg. §1.905-1(e) Election by cash method taxpayer to take credit on the accrual basis—(1) In general.
- Treas. Reg. §Treas. Reg. §1.905-1(f) Rules for creditable foreign tax expenditures of partners, shareholders, or beneficiaries of a pass-through entity—(1) Effect of pass-through entity's method of accounting on when foreign tax credit or deduction can be claimed.
- Treas. Reg. §Treas. Reg. §1.905-1(g) Blocked income.
- Treas. Reg. §Treas. Reg. §1.905-1(h) Applicability dates.
- Treas. Reg. §Treas. Reg. §1.905-1(i) Facts.
- Treas. Reg. §Treas. Reg. §1.905-1(v) Example 5: Improperly accelerated accrual—(A) Facts—(1) Foreign income tax accrued and paid.
- Treas. Reg. §Treas. Reg. §1.905-2 Conditions of allowance of credit
- Treas. Reg. §Treas. Reg. §1.905-2(a) Forms and information.
- Treas. Reg. §Treas. Reg. §1.905-2(b) Secondary evidence.
- Treas. Reg. §Treas. Reg. §1.905-2(c) Credit for taxes accrued but not paid.
- Treas. Reg. §Treas. Reg. §1.905-2(i) §1.905-2(i)
- Treas. Reg. §Treas. Reg. §1.905-2(v) In case a bond is not required, a specific agreement wherein the taxpayer shall recognize its liability to report the correct amount of tax when ascertained, as required by the provisions of section 905 (c).
- Treas. Reg. §Treas. Reg. §1.905-3 Adjustments to U.S. tax liability and to current earnings and profits as a result of a foreign tax redetermination
- Treas. Reg. §Treas. Reg. §1.905-3(a) Foreign tax redetermination.
- Treas. Reg. §Treas. Reg. §1.905-3(b) Redetermination of U.
- Treas. Reg. §Treas. Reg. §1.905-3(c) Foreign income tax imposed on foreign refund.
- Treas. Reg. §Treas. Reg. §1.905-3(d) Applicability dates.
- Treas. Reg. §Treas. Reg. §1.905-3(v) Examples.
- Treas. Reg. §Treas. Reg. §1.905-4 Notification of foreign tax redetermination
- Treas. Reg. §Treas. Reg. §1.905-4(a) Application of this section.
12 Citing Cases
7Petitioner argues that the claim ofright doctrine does not apply here be- cause section 905(c) takes a "transactional approach" to determining the correct foreign tax credit.
We hold that, even under the more flexible standard provided by Cohan, the Larkins failed to present sufficient evidence to substantiate the amounts reported.
At the trial level, however, Goodyearraised a second and distinct legal issue: "whether the payments re- ceived by its foreign subsidiary from the British government during 1975 and 1976 were properly classified and treated as refunds for years 1970 and 1971 under section 905." Goodyear, 14 Cl.
§ 1.905-2. Mr. Clemons failed to meet his burden. He testified that Entity Solutions withheld taxes from his HP Australia compensation and paid them over to the Australian government but provided no documentary evidence. Because he failed to provide sufficient evidence showing that tax was withheld by Entity Solutions or paid ove
905(e) (2012) (exempting nondefense unobligated balances). Petitioner argues that whistleblower awards are self-funded through the targets' payment oftheir taxes. He characterized the targets' 2013 tax payments as the appropriation for his award and argues that the tax payments become - 28 - unobligated balances after 2013 until his award is
humiliation, and embarrassment are not personal physical injuries or physical sickness * * * but are most akin to emotional distress.” Shaltz v. Commissioner, T.C. Memo. 2003-173. Anxiety is also part of emotional distress. 7 Restatement, Torts 2d, sec. 905 (1979). Under the flush language of section 104, damages resulting from emotional distress are not excludable from income. Therefore, if the damages paid to petitioner are to satisfy the second prong of Schleier, they must have been paid sole