The US IRS, in a technical advice memorandum released April 24, ruled that a refund claim filed in year 13 is not timely for taxes paid for year 2 if the claim for refund results from a net operating loss (NOL) in year 4 that was generated when the taxpayer made a timely election to deduct foreign taxes paid in lieu of the previously claimed foreign tax credit.
The Service determined that the timeliness of the claim for refund is governed by section 6511(d)(2) because it is attributable to an NOL carryback and the applicable period thus expired three years after the due date of the return for year 4.
Even if the claim for refund is viewed as attributable to foreign taxes paid, the ten-year period under section 6511(d)(3) is only available for refunds attributable to foreign tax credits; it does not apply to refunds attributable to deductions for creditable foreign taxes, the Service said.
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