i7204--dft

Note: The draft you are looking for begins on the next page.

Caution: DRAFT—NOT FOR FILING

This is an early release draft of an IRS tax form, instructions, or publication,
which the IRS is providing for your information. Do not file draft forms and do
not rely on draft forms, instructions, and publications for filing. We do not
release draft forms until we believe we have incorporated all changes (except
when explicitly stated on this coversheet). However, unexpected issues
occasionally arise, or legislation is passed—in this case, we will post a new draft
of the form to alert users that changes were made to the previously posted draft.
Thus, there are never any changes to the last posted draft of a form and the
final revision of the form. Forms and instructions generally are subject to OMB
approval before they can be officially released, so we post only drafts of them
until they are approved. Drafts of instructions and publications usually have
some changes before their final release.
Early release drafts are at IRS.gov/DraftForms and remain there after the
final release is posted at IRS.gov/LatestForms. All information about all forms,
instructions, and pubs is at IRS.gov/Forms.
Almost every form and publication has a page on IRS.gov with a friendly
shortcut. For example, the Form 1040 page is at IRS.gov/Form1040; the Pub.
501 page is at IRS.gov/Pub501; the Form W-4 page is at IRS.gov/W4; and the
Schedule A (Form 1040/SR) page is at IRS.gov/ScheduleA. If typing in a link
above instead of clicking on it, be sure to type the link into the address bar of
your browser, not a Search box.
If you wish, you can submit comments to the IRS about draft or final forms,
instructions, or publications at IRS.gov/FormsComments. Include “NTF”
followed by the form number (for example, “NTF1040” or “NTFW4”, etc.) in the
body of the message to route your message properly. We cannot respond to all
comments due to the high volume we receive and may not be able to consider
many suggestions until the subsequent revision of the product, but we will
review each routed message.
If you have comments on reducing paperwork and respondent (filer) burden,
with respect to draft or final forms, please respond to the relevant information
collection through the Federal Register process; for more info, click here.

Instructions for Form 7204

Department of the Treasury
Internal Revenue Service

(December 2022)

Consent To Extend the Time To Assess Tax Related to Contested Foreign Income
Taxes—Provisional Foreign Tax Credit Agreement

DRAFT AS OF
January 4, 2023

Section references are to the Internal
Revenue Code unless otherwise noted.

complete a separate Form 7204 for
each contest.

Future Developments

Specific Instructions

For the latest information about
developments related to Form 7204
and its instructions, such as
legislation enacted after they were
published, go to IRS.gov/Form1118.

General Instructions
Purpose of Form

Form 7204 must be used for elections
to claim a provisional credit for
contested foreign income taxes as
provided in Regulations sections
1.905-1(c)(3) and 1.905-1(d)(4).

Who Must File

Any taxpayer that elects to claim a
provisional credit under Regulations
section 1.905-1(c)(3) or 1.905-1(d)(4).

How To File

For taxpayers claiming credits on the
accrual basis, file Form 7204 together
with an original or amended Form
1116 or Form 1118, together with an
original or amended return, for the tax
year to which the contested foreign
income tax relates. For taxpayers
claiming credits on the cash basis, file
Form 7204 together with the Form
1116 or Form 1118 for the tax year in
which the contested foreign income
tax is remitted to the foreign country.

Note. Taxpayers that make the
provisional credit election must, for
each subsequent tax year up to and
including the tax year in which the
contest is resolved, file annually
Schedule C (Form 1116) or
Schedule L (Form 1118), as
applicable, to comply with the annual
notice requirement in Regulations
section 1.905-1(d)(4)(iv).
Important. If you have more than
one contest with respect to the tax
year described in item 1 of the form,

Jan 4, 2023

Identifying number. The identifying
number of an individual is the social
security number. For all other
taxpayers, it is the employer
identification number.
Address. Include the suite, room, or
other unit number after the street
address. If the Post Office does not
deliver mail to the street address and
the transferor has a P.O. box, show
the box number instead.

Reason for filing Form 7204.
Check the box to indicate whether the
taxpayer claimed the foreign tax credit
on the accrual basis or on the cash
basis. See Regulations sections
1.905-1(c)(3) and 1.905-1(d)(4).
Line 1. For taxpayers claiming
credits on the accrual basis, enter on
line 1 the U.S. tax year to which the
contested foreign income tax relates.
For taxpayers claiming the credit
on the cash basis, enter the U.S. tax
year in which the contested foreign
income tax was remitted.
Note. If the same contest covers
foreign taxes that relate to multiple
U.S. tax years, a separate Form 7204
must be filed for each tax year.
Line 6a. Enter on line 6a the
description of the contest, the
contested foreign income tax, and the
income to which the contested foreign
income tax is related. The description
should include the nature of the
contest (for example, foreign initiated
transfer pricing audit), the type of
foreign tax at issue (for example,
nonresident corporate income tax),
and the venue in which the contest is
being pursued (for example, appeals,
court, or competent authority).
Line 6b. Enter on line 6b the payor’s
name and the payor’s EIN or
reference ID number. In this context,
Cat. No. 93056O

the payor is the taxpayer or a qualified
business unit (QBU) or controlled
foreign corporation (CFC) of the
taxpayer, or QBU of such CFC, for
example, that remits the contested
foreign income tax to the foreign
country. For more information about
reference ID numbers for foreign
entities, see the Instructions for Form
1118.
Line 6c. Enter on line 6c the
reference ID number for the
contested foreign income tax. The
taxpayer must create and use a
reference ID number that uniquely
identifies each contested foreign
income tax, using the following rules.
This reference ID number
does not refer to the taxpayer
CAUTION or a payor entity; rather it
refers to the contested foreign income
tax.

!

The reference ID number must be
alphanumeric (defined below) and no
special characters or spaces are
permitted. The reference ID number
should have 12 characters and be
formatted as follows:
• The first six characters pertain to
the tax year end of the payor identified
on line 6b. The first four characters
denote the year and the next two
characters denote the month. For
taxpayers claiming credits on the
accrual basis, use the tax year to
which the contested foreign income
tax relates. For taxpayers claiming
credits on the cash basis, use the tax
year in which the contested foreign
income tax was remitted.
• The next two characters should be
the code of the country or U.S.
territory to which the contested foreign
income tax was remitted using the
two-letter codes provided at IRS.gov/
CountryCodes.
• The next four characters should be
a counting number in sequential order
starting with "0001," to differentiate
multiple contested foreign income

taxes under the same tax year, month,
and country.
For these purposes, the term
"alphanumeric" means the entry can
be alphabetical, numeric, or any
combination of the two.
The same reference ID number
must be used consistently from tax
year to tax year with respect to a given
contested foreign income tax. If for
any reason a reference ID number
falls out of use (for example, the
contest is settled), the reference ID
number used for that contested
foreign income tax cannot be used
again for another contested foreign
income tax for purposes of filing
Schedule C (Form 1116), Schedule L
(Form 1118), or Form 7204.

Signature

Note. If the same contest covers
more than one foreign income tax, a
separate Form 7204 should be filed
for each tax. In addition, if the contest
covers a foreign income tax that
relates to multiple tax years, a
separate reference ID number must
be selected for the separate amounts
of contested foreign income taxes that
relate to each tax year.

Attorney or agent. If you are an
attorney or agent of the taxpayer(s),
you may sign this consent if that
action is specifically authorized by a
power of attorney. Form 2848, Power
of Attorney and Declaration of
Representative, provides the authority
on line 5, Acts authorized. Attach a
copy of Form 2848 with Form 7204.

Joint returns. If this consent is made
for any year for which a joint income
tax return is filed, both spouses must
sign Form 7204 unless one, acting
under a power of attorney, signs as an
agent for the other.

all of the property or business of a
corporation.

Paperwork Reduction Act
Notice

We ask for the information on this
form to carry out the Internal Revenue
laws of the United States. You are
required to give us the information.
We need it to ensure that you are
complying with these laws and to
allow us to figure and collect the right
amount of tax.

DRAFT AS OF
January 4, 2023

Line 6d. Enter on line 6d the code of
the country or U.S. territory to which
tax was remitted using the two-letter
codes provided at IRS.gov/
CountryCodes.
Line 6e. Enter on line 6e the amount
of contested foreign income tax
remitted, in local currency, and the
date(s) of the remittance(s). For
taxpayers claiming credits on the
accrual basis, if the same contest
covers foreign taxes that relate to
multiple U.S. tax years, only include
on line 6e the amount of the contested
foreign income tax remitted that
relates to the U.S. tax year identified
on line 1.

Corporation. If the taxpayer is a
corporation, a responsible officer of
the corporation must sign the return
and show his or her title. Affiliated
groups filing a consolidated income
tax return should see Regulations
section 1.1502-77 for rules about a
common parent signing as an agent
for subsidiaries and alternative agents
for affiliated groups. Also see
Regulations sections 1.905-1(c)(3)
and 1.905-1(d)(4).

Fiduciaries. If you are acting as a
trustee and you sign this consent, you
must attach a copy of Form 56, Notice
Concerning Fiduciary Relationship,
and the trust instrument. If you are
acting as an executor, administrator,
or other fiduciary of an estate, you
must attach a copy of Form 56, and
the certified copy of letters of
testamentary or court certificate
certifying as to the present status of
the estate, including the name of the
present fiduciary and capacity.
Bankruptcy case under Title 11,
United States Code. The trustee
must sign the consent in a case under
Title 11 if the trustee has possession
of, or holds title to, all or substantially

-2-

You are not required to provide the
information requested on a form that
is subject to the Paperwork Reduction
Act unless the form displays a valid
OMB control number. Books or
records relating to a form or its
instructions must be retained as long
as their contents may become
material in the administration of any
Internal Revenue law. Generally, tax
returns and return information are
confidential, as required by Code
section 6103.
The time needed to complete and
file this form will vary depending on
individual circumstances. The
estimated burden for taxpayers filing
this form is approved under OMB
control number 1545-2296. The
estimated burden for taxpayers
learning, sending, and recordkeeping
is 2 hours.

If you have comments concerning
the accuracy of these time estimates
or suggestions for making this form
simpler, we would be happy to hear
from you. You can send us comments
from IRS.gov/FormComments. Or you
can write to Internal Revenue Service,
Tax Forms and Publications Division,
1111 Constitution Ave. NW, IR-6526,
Washington, DC 20224. Do not send
the form to this address. Instead, see
How To File, earlier.

Instructions for Form 7204 (2022)