IRS targets foreign tax credit generators.

The Joint International Tax Shelter Information Centre--an organization of tax administrators from Australia, Canada, the United Kingdom and the United States--recently focused on transactions by U.S. taxpayers with foreign counterparts to generate foreign tax credits. The IRS in response proposed amendments to regulations section 1.901-2, which targets transactions involving U.S. borrowers and lenders and asset-holding transactions intentionally structured to create a foreign tax liability. The IRS also has identified foreign tax credit generators as a top-tier compliance issue within its Large and Mid-Size Business Division.

Section 901 of the Internal Revenue Code …