[Federal Register Volume 88, Number 22 (Thursday, February 2, 2023)]
[Notices]
[Pages 7129-7130]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-02187]


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DEPARTMENT OF THE TREASURY


Agency Information Collection Activities; Submission for OMB 
Review; Comment Request; Provisional Foreign Tax Credit Agreement

AGENCY: Departmental Offices, U.S. Department of the Treasury.

ACTION: Notice of information collection; request for comment.

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SUMMARY: The Department of the Treasury will submit the following 
information collection request to the Office of Management and Budget 
(OMB) for review and clearance in accordance with the Paperwork 
Reduction Act of 1995, on or after the date of publication of this 
notice. The public is invited to submit comments on this request.

DATES: Comments should be received on or before March 6, 2023 to be 
assured of consideration.

ADDRESSES: Written comments and recommendations for the proposed 
information collection should be sent within 30 days of publication of 
this notice to www.reginfo.gov/public/do/PRAMain. Find this particular 
information collection by selecting ``Currently under 30-day Review--
Open for Public Comments'' or by using the search function.

FOR FURTHER INFORMATION CONTACT: Copies of the submissions may be 
obtained from Spencer W. Clark by emailing [email protected], calling 
(202) 927-5331, or viewing the entire information collection request at 
www.reginfo.gov.

SUPPLEMENTARY INFORMATION: 

Internal Revenue Service (IRS)

    Title: Provisional Foreign Tax Credit Agreement.
    OMB Control Number: 1545-2296.
    Type of Review: Revision of a currently approved collection.
    Description: 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), section 1.461-2(a)(2)(i), 
and section 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 section 
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, sections 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

[[Page 7130]]

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 section 
1.905-1(d)(4)(ii). The IRS is adding a new Form 7204 for respondents to 
report this information.
    Form: 7204.
    Affected Public: U.S. persons who pay or accrue foreign income 
taxes.
    Estimated Number of Respondents: 11,400.
    Frequency of Response: Annually, On Occasion.
    Estimated Total Number of Annual Responses: 11,400.
    Estimated Time per Response: 2 hours.
    Estimated Total Annual Burden Hours: 22,800.
    Authority: 44 U.S.C. 3501 et seq.

Spencer W. Clark,
Treasury PRA Clearance Officer.
[FR Doc. 2023-02187 Filed 2-1-23; 8:45 am]
BILLING CODE 4830-01-P