Curriculum Guide · Courses

Professors Anne Devereaux and Rebecca Rosenberg

LL.M Course 975 (cross-listed) | 2 credit hours

This course will cover the basics and the finer points of the foreign tax credit, an important issue for virtually all multinational taxpayers. In the current global economy, knowledge about the foreign tax credit is essential for any tax lawyer and particularly helpful for those who represent large corporations or whose practice involves cross-border transactions of any kind. The course will address the mechanics of the Code and Regulations, as well as bigger-picture concepts arising in case law and elsewhere. Students will learn the rules that govern who is entitled to a credit; for what taxes a credit may be claimed; and how large a credit may be taken; and in what year the credit properly accrues. We will also discuss current tax planning issues regarding foreign tax credits.

Students will gain an understanding of the basic foreign tax credit principles of section 901 of the Code, including the criteria used to determine the creditability of foreign taxes, as well as the principles governing “in lieu of” taxes creditable under section 903. The course will address the limitations on the foreign tax credit under section 904; the rules governing the sourcing and “basketing” of income; base and timing differences; and required adjustments to the amount of foreign taxes paid. Students will also learn the fundamentals of the section 861 rules whereby taxpayers’ deductions are allocated and apportioned to their foreign-source income for purposes of credit computation. The course will cover the deemed paid credit under section 902 for taxes paid by foreign subsidiaries of U.S. taxpayers; the rules for maintaining pools and layers of earnings and profits and related foreign taxes; the impact of corporate transactions on E&P and the amount of the credit; and the interaction with the subpart F regime. Reading materials will focus on the relevant Code provisions and Regulations and on the evolution of the foreign tax credit through case law.

Prerequisites: Taxation I, Corporate Tax, and International Tax.

JD students who have not taken Taxation I and Taxation II should consult Ellis Duncan (ged5@law.georgetown.edu) before enrolling in this course.