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Foreign Tax Credit Arbitrage, Eric Silver

eric silver

Within the sophisticated world of international finance, there exists an inherent tension in characterizing particular tax strategies as either savvy investments or imprudent tax avoidance. At the center of this struggle are the proposed amendments to regulation section 901 of the Internal Revenue Code. Both the Internal Revenue Service (the IRS) and the Treasury Department claim that the proposed regulations will guide tax strategists in determining the appropriate amount of domestic and foreign taxes paid and the claiming of foreign tax credits. More specifically, the updates to the legislation concern transactions involving U.S.-owned foreign entities and certain structured passive investment …