The US IRS today announced that it has suspended Rev. Rul. 71-533, 1971-2 C.B. 413 which concerns the availability to taxpayers of special tax rules that extend the statute of limitations to ten years in cases where a refund relates to overpayments relating to foreign taxes.
In Rev. Ruling 71-533, a taxpayer incurred a net operating loss that it carried back three years, eliminating the taxpayer’s income in the earlier year. This, in turn, created an extra foreign tax credit in the earlier year, which the taxpayer attempted to carryback two more years. The ruling held, however, that the taxpayer could not claim a refund under section 6511(d)(3)(A), which extends the statute of limitations from 3 years to 10 years.
The Service said it was reconsidering whether the ten-year statute of limitations period provided by section 6511(d)(3)(A) applies to claims for refund or credit of an overpayment resulting from a foreign tax credit carryback arising as a result of a net operating loss carryback from a subsequent year and thus suspended the revenued ruling.
The Service said that Rev. Rul. 68-150, 1968-1 C.B. 564 would also be suspended until it has completed its assessment.
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