Guidance Related to the Foreign Tax Credit

Forms and Documents

Forms and supporting documents for this ICR

Document	Type	Status	Availability
REG-112096-22 _Supporting Statement_1545-NEW_ (CC additions)-11-15-22.docx	Supporting Statement A	Uploaded 2022-11-22	Repair queued

IC Document Collections

Information collection document groups

IC ID	Collection	Type	Status	Form
256924	Guidance Related to the Foreign Tax Credit		New

ICR Details

OMB Control No: 1545-2305	ICR Reference No: 202211-1545-003
Status: Historical Inactive	Previous ICR Reference No:
Agency/Subagency: TREAS/IRS	Agency Tracking No:
Title: Guidance Related to the Foreign Tax Credit
Type of Information Collection: New collection (Request for a new OMB Control Number)	Common Form ICR:  No
Type of Review Request: Regular
OIRA Conclusion Action: Comment filed on proposed rule	Conclusion Date: 01/30/2023
Retrieve Notice of Action (NOA)	Date Received in OIRA: 11/28/2022
Terms of Clearance: Pursuant to 5 CFR 1320.11(c), OMB files this comment on this information collection request (ICR). This OMB action is not an approval to conduct or sponsor an information collection under the Paperwork Reduction Act of 1995. This action has no effect on any current approvals. If OMB has assigned this ICR a new OMB Control Number, the OMB Control Number will not appear in the active inventory. For future submissions of this information collection, reference the OMB Control Number provided. The agency shall examine public comment in response to the NPRM and will describe in the supporting statement of its next collection any public comments received regarding the collection as well as why (or why it did not) incorporate the commenter’s recommendation. The next submission to OMB must include the draft final rule.

table that charts list comparision

	Inventory as of this Action	Requested	Previously Approved
Expiration Date		36 Months From Approved
Responses	0	0	0
Time Burden (Hours)	0	0	0
Cost Burden (Dollars)	0	0	0

---

Abstract: The IRS is proposing regulations that provide an exception (the “single-country exception”) to the source-based attribution requirement in §1.901-2(b)(5) for certain withholding taxes on royalties if a taxpayer can substantiate that the payment on which the royalty withholding tax is imposed was made pursuant to an agreement that limits the right to use intangible property to the jurisdiction imposing the tax. The exception applies only where the taxpayer has a written license agreement that provides for the payment of the royalty and that limits the use of the intangible property giving rise to the royalty payment to the territory of the foreign country imposing the tax. A payment may also qualify for the single-country exception if the agreement separately states the portion (whether as a specified amount or as a formula) of the payment subject to the tested foreign tax that is characterized as a royalty and that is with respect to the portion of the territory of the license that is solely within the foreign country imposing the tax. Proposed §1.903-1(c)(2)(iv)(D) requires taxpayers who claim eligibility for the exception to provide an agreement described in proposed §1.903-1(c)(2)(iv)(A) or (B), as applicable, (the “required agreement”) within 30 days of a request by the Commissioner or another period as agreed between the Commissioner and the taxpayer. Proposed §1.903-1(c)(2)(iv)(D) also provides a transition rule in the case of a royalty paid on or before 180 days after the proposed regulations are filed in the Federal Register that requires the required agreement to be executed as of 180 days after the proposed regulations are filed in the Federal Register. The Treasury Department and the IRS intend that the information collection requirement in proposed §1.903-1(c)(2)(iv)(D) will affect U.S. corporations, s corporations, individuals, partnerships, trusts and estates that pay withholding taxes on royalties to a foreign country and that claim (or whose partners or shareholders claim) a foreign tax credit. The information collection requirement may be attached to Form 1116 and Form 1118.

---

Authorizing Statute(s): US Code: 26 USC 1.903 Name of Law: Taxes in lieu of income taxes
  

Citations for New Statutory Requirements: None

---

Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
1545-BQ46	Proposed rulemaking	87 FR 71271	11/22/2022

---

Federal Register Notices & Comments

Did the Agency receive public comments on this ICR? No

---

Number of Information Collection (IC) in this ICR: 1

table that charts list of burden

IC Title	Form No.	Form Name
Guidance Related to the Foreign Tax Credit

---

Burden increases because of Program Change due to Agency Discretion: Yes

Burden Increase Due to: Changing Regulations

Burden decreases because of Program Change due to Agency Discretion: No

Burden Reduction Due to:

Short Statement: The increase in burden is due to this information collection being a new proposed regulation.

---

Annual Cost to Federal Government: $0

Does this IC contain surveys, censuses, or employ statistical methods? No

Does this ICR request any personally identifiable information (see OMB Circular No. A-130 for an explanation of this term)? Please consult with your agency's privacy program when making this determination.     No

Does this ICR include a form that requires a Privacy Act Statement (see 5 U.S.C. §552a(e)(3))? Please consult with your agency's privacy program when making this determination.     No

Is this ICR related to the Affordable Care Act [Pub. L. 111-148 & 111-152]? No

Is this ICR related to the Dodd-Frank Wall Street Reform and Consumer Protection Act, [Pub. L. 111-203]? No

Is this ICR related to the American Recovery and Reinvestment Act of 2009 (ARRA)? No

Is this ICR related to the Pandemic Response? No

---

Common Form ICR:  No

---

On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).

The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:

(a) It is necessary for the proper performance of agency functions;

(b) It avoids unnecessary duplication;

(c) It reduces burden on small entities;

(d) It uses plain, coherent, and unambiguous language that is understandable to respondents;

(e) Its implementation will be consistent and compatible with current reporting and recordkeeping practices;

(f) It indicates the retention periods for recordkeeping requirements;

(g) It informs respondents of the information called for under 5 CFR 1320.8 (b)(3) about:

(i) Why the information is being collected;

(ii) Use of information;

(iii) Burden estimate;

(iv) Nature of response (voluntary, required for a benefit, or mandatory);

(v) Nature and extent of confidentiality; and

(vi) Need to display currently valid OMB control number;

(h) It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to be collected.

(i) It uses effective and efficient statistical survey methodology (if applicable); and

(j) It makes appropriate use of information technology.

If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.

Certification Date: 11/28/2022

---