Provisional Foreign Tax Credit Agreement

Forms and Documents

Forms and supporting documents for this ICR

Document	Type	Status	Availability
Form 7204 Consent To Extend the Time To Assess Tax Related to Contested Foreign Income Taxes— Provisional Foreign Tax Credit Agreement	Form	Modified	Available
Form 7204 Provisional Foreign Tax Credit Agreement	Form	Modified	Repair queued
Supporting Statement 1545-2296.docx	Supporting Statement A	Uploaded 2023-01-12	Repair queued

IC Document Collections

Information collection document groups

IC ID	Collection	Type	Status	Form
243640	Provisional Foreign Tax Credit Agreement	Form	Modified	Consent To Extend the Time To Assess Tax Related to Contested Foreign Income Taxes— Provisional Foreign Tax Credit Agreement
243640	Provisional Foreign Tax Credit Agreement	Form	Modified
243640	Provisional Foreign Tax Credit Agreement	Instruction	Modified

ICR Details

OMB Control No: 1545-2296	ICR Reference No: 202301-1545-013
Status: Historical Active	Previous ICR Reference No: 202110-1545-003
Agency/Subagency: TREAS/IRS	Agency Tracking No:
Title: Provisional Foreign Tax Credit Agreement
Type of Information Collection: Revision of a currently approved collection	Common Form ICR:  No
Type of Review Request: Regular
OIRA Conclusion Action: Approved without change	Conclusion Date: 03/30/2023
Retrieve Notice of Action (NOA)	Date Received in OIRA: 02/02/2023
Terms of Clearance:

table that charts list comparision

	Inventory as of this Action	Requested	Previously Approved
Expiration Date	03/31/2026	36 Months From Approved	02/28/2025
Responses	11,400	0	11,400
Time Burden (Hours)	22,800	0	22,800
Cost Burden (Dollars)	0	0	0

---

Abstract: Sections 901 and 905 allow a taxpayer to claim a foreign tax credit for foreign income taxes paid or accrued in a taxable year, depending on taxpayer’s method of accounting for such taxes. However, regardless of the year in which the credit is allowed based on taxpayer’s method of accounting, the foreign tax credit is allowed only to the extent the foreign income taxes are ultimately both owed and actually remitted to the foreign country. For accrual method taxpayers, section 461(f) (flush language), §1.461-2(a)(2)(i), and §1.905-1(d)(3) provide that a foreign income tax liability that is contested does not accrue and is not creditable until the contest is resolved. For cash method taxpayers, a foreign income tax liability that is contested is not a reasonable approximation of the taxpayer’s final foreign income tax liability and, thus, under §1.901-2(e)(2)(i), is not considered an amount of tax paid for purposes of section 901 until the contest is resolved. However, §§1.905-1(c)(3) and 1.905-1(d)(4) allow taxpayers to make an election to claim a provisional foreign tax credit for a contested foreign income tax liability to the extent that the taxpayer has remitted the contested tax to the foreign country. As a condition for making this election, the taxpayer must enter into a provisional foreign tax credit agreement, in which the taxpayer gives the IRS information regarding the contested foreign income tax liability and agrees to comply with the conditions of the election, including agreeing to not to assert the statute of limitations on assessment as a defense to assessment of taxes and interest by the IRS with respect to the contested tax for a period of three years from the year in which taxpayer notifies the IRS of the resolution of the contest. See §1.905-1(d)(4)(ii). The likely respondents are: U.S. persons who pay or accrue foreign income taxes.

---

Authorizing Statute(s): US Code: 26 USC 901 Name of Law: Taxes of foreign countries and of possessions of United States
   US Code: 26 USC 461 Name of Law: General rule for taxable year of deduction
   US Code: 26 USC 905 Name of Law: Applicable rules
  

Citations for New Statutory Requirements: None

---

Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
	Not associated with rulemaking

---

Federal Register Notices & Comments
60-day Notice:	Federal Register Citation:	Citation Date:
	87 FR 276	01/04/2022
30-day Notice:	Federal Register Citation:	Citation Date:
	88 FR 7129	02/02/2023
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
Provisional Foreign Tax Credit Agreement	7204	Consent To Extend the Time To Assess Tax Related to Contested Foreign Income Taxes— Provisional Foreign Tax Credit Agreement

---

ICR Summary of Burden

table that charts list of burden

	Total Approved	Previously Approved	Change Due to New Statute	Change Due to Agency Discretion	Change Due to Adjustment in Estimate	Change Due to Potential Violation of the PRA
Annual Number of Responses	11,400	11,400	0	0	0	0
Annual Time Burden (Hours)	22,800	22,800	0	0	0	0
Annual Cost Burden (Dollars)	0	0	0	0	0	0

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

Burden Increase Due to:

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

Burden Reduction Due to:

Short Statement:

---

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.     Yes

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: 02/02/2023

---