Foreign Tax Credit Compliance Tips
United States residents are taxed on their worldwide income. In an effort to alleviate such taxpayers from being subjected to double taxation, the Internal Revenue Code provides taxpayers with a foreign tax credit. However, the foreign tax credit does not apply to all foreign taxes and the rules can be quite complicated. Consequently, in an effort to assist taxpayers with properly determining the appropriate credit, the IRS released Tips today to assist in compliance.
Also see Publication 514 for additional reference: http://www.irs.gov/publications/p514/index.html