Ways and Means Republicans renew push to delay implementation of foreign tax credit regs

Republicans on the House Ways and Means Committee sent a letter to Treasury Secretary Janet Yellen on June 16 renewing their call for a delay in implementing foreign tax credit final regulations that were issued late last December and took effect on March 7 of this year.

Business organizations have raised numerous concerns with the final regulations since January and have requested a one-year delay in their implementation. (For prior coverage, see Tax News & Views, Vol. 23, No. 16, May 6, 2022.) Under questioning from members of the House Ways and Means Committee and the Senate Finance Committee during two recent hearings to examine the Biden administration’s FY 2023 budget blueprint, Yellen said she does not expect that Treasury will extend the implementation date; however, she said that some changes to the final regulations could be applied retroactively—a response that left some taxwriters dissatisfied. (For prior coverage, see Tax News & Views, Vol. 23, No. 20, June 10, 2022.)

In their letter, Ways and Means Republicans requested that implementation date be pushed to January 1, 2023, explaining that unresolved questions about the new rules continue to present challenges for taxpayers.

“Treasury’s delay in providing necessary clarifying guidance has levied undue burdens on taxpayers attempting to comply with the final regulations. Lack of clarity in the final regulations has undermined the integrity of public financial reporting and affected investment decisions. These problems are compounded each fiscal quarter that guidance is delayed and businesses and financial auditors try to guess Treasury’s final landing spot,” the letter said.

Back to top