The Tax Act created two new foreign tax credit limitation baskets – one for foreign branch income (new section 904(d)(1)(B)) and one for any amount includible in gross income under section 951A (i.e., GILTI) – however, it failed to amend section 904(d)(2)(H)(i) to reflect these changes to section 904(d)(1). As a result of this oversight, section 904(d)(2)(H)(i) currently instructs the taxpayer to treat foreign taxes imposed on amounts that do not constitute income under US principles as imposed on income described in the foreign branch income basket. In light of legislative history and Treasury regulations, such a failure to amend the Code appears to be a drafting error. This article addresses the relevant case law that, on balance, supports applying section 904(d)(2)(H)(i) as if its language and cross-reference had been properly amended.
Deference Provided to Regulations When There’s a Drafting Error
By Britt Haxton and K. Christy Vouri-Misso on April 4, 2018
Posted In Tax Reform, Uncategorized

Britt Haxton focuses her practice on US and international tax matters for US and non-US multinationals. Britt regularly advises clients on tax-free and taxable acquisitions, dispositions, restructurings and liquidations. In addition, she has experience in providing advice on the Foreign Account Tax Compliance Act (FATCA) compliance and reporting. Britt also advises clients on international tax issues, including foreign tax credit, subpart F and application of bilateral income tax treaties. Read Britt Haxton's full bio.

K. Christy Vouri-Misso focuses her practice on all stages of complex federal tax controversies including Internal Revenue Service (IRS) examinations, administrative appeals, voluntary disclosures, and litigation. She has settled multiple tax disputes with IRS legal counsel avoiding costly litigation in court. Read K. Christy Vouri-Misso's full bio.
Related Posts
- Second Circuit Weighs in on Tax Court’s Refund Jurisdiction
- Bring That CFC on Home: Domesticating Individually-Owned CFCs After Tax Reform
- Senate Confirms Rettig as Next IRS Commissioner; Desmond Next?
- News of Wayfair Decision Breaks during Tax in the City® New York
- Tax in the City® Seattle Proves to be the Largest Turnout to Date
BLOG EDITORS
STAY CONNECTED
TOPICS
ARCHIVES


