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July 27, 2022

IRS makes substantive corrections to foreign tax credit regs, retroactively changing analysis on certain key issues of credibility

The IRS has corrected the foreign tax credit regulations (TD 9959) that were published on January 4, 2022 (see Tax Alert 2022-0040). The corrected regulations (i) provide relief from the "cost recovery" requirement; (ii) change the rules for allocating and apportioning foreign tax imposed on disregarded sales of property; and (iii) make several other technical changes to the foreign tax credit and GILTI high-tax exception regulations. The text of the corrections is available here and here. A Tax Alert is forthcoming.