IRS Issues Notice on Application of Section 909 to Foreign Taxes

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IRS and the Treasury Department issue Notice 2010–92, addressing the application of tax code Section 909 to foreign income taxes paid or accrued in taxable years of a Section 902 corporation beginning on or before Dec. 31, 2010. In general, the splitter language provides that foreign taxes are suspended for purposes of getting the credit until the income is brought up to match them. Enacted in legislation signed by the president Aug. 10, the provision takes effect after Dec. 31, 2010, but it can be considered retroactive for taxes paid before that date and brought forward to match up income afterward.