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B-331704 1 (2020-01-02)

handle is hein.gao/gaobaeamn0001 and id is 1 raw text is: cAO U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 B-331704 January 2, 2020 The Honorable Chuck Grassley Chairman The Honorable Ron Wyden Ranking Member Committee on Finance United States Senate The Honorable Richard Neal Chairman The Honorable Kevin Brady Ranking Member Committee on Ways and Means House of Representatives Subject: Department of the Treasury, Internal Revenue Service: Foreign Tax Credit Guidance Related to the Tax Cuts and Jobs Act, Overall Foreign Loss Recapture, and Foreign Tax Redeterminations Pursuant to section 801 (a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Department of the Treasury, Internal Revenue Service (IRS) entitled Foreign Tax Credit Guidance Related to the Tax Cuts and Jobs Act, Overall Foreign Loss Recapture, and Foreign Tax Redeterminations (RINs: 1545-BP19, 1545-BK55, 1545-AC09). We received the rule on December 17, 2019. It was published in the Federal Register as final and temporary regulations, and removal of temporary regulations on December 17, 2019. 84 Fed. Reg. 69022. The effective date of the rule is December 17, 2019. The final rule specifies the methodologies and approaches necessary to conform the existing regulations to changes specified in the Tax Cuts and Jobs Act (TCJA). IRS stated that the final rule provides guidance for taxpayers to determine the amount of their foreign tax credits (FTC) and how to compute their FTC limitation. In addition, IRS stated that the final rule addresses how FTC carryovers are allocated across the new separate categories created by TCJA. According to IRS, the final rule also addresses certain potentially abusive borrowing arrangements and clarifies the regulatory environment by updating inoperative language in parts of the regulations that have not previously been updated to reflect changes made in 1978. IRS stated that the final rule eases transitional administrative burdens associated with the implementation of TCJA. In addition, this rule finalizes proposed regulations on overall foreign losses and a U.S. taxpayer's obligation to notify IRS of a foreign tax redetermination. The Congressional Review Act (CRA) requires a 60-day delay in the effective date of a major rule from the date of publication in the Federal Register or receipt of the rule by Congress, whichever is later. 5 U.S.C. § 801(a)(3)(A). The 60-day delay in effective date can be waived, however, if the agency finds for good cause that delay is impracticable, unnecessary, or

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