The Peck Group, LC
  • Comprehensive Tax Law Representation Since 1995

    We handle every aspect of tax law: preparing tax returns, representing clients during audits, resolving IRS and state tax controversies, and creating tax planning strategies for the future.

  • Problems With The IRS Or State Tax

    Our attorneys are committed to providing efficient and effective tax solutions for individuals and businesses in Georgia and nationwide.

  • Planning For The Future

    Our lawyers help individuals and businesses with all aspects of estate and tax planning. We help our clients use proactive strategies to minimize tax implications in the future

  • Changing The Balance Of Power

    Does it feel like the government has all the power? Taxpayers have rights, too. We use our knowledge of tax law to shift the balance of power and ensure that your rights are protected.

  • Tax Solutions … And Peace Of Mind

Purpose of foreign transactions under scrutiny by IRS

If your company conducts business in the U.S. and at least one other country, you should be aware of the issues with paying foreign taxes. In some cases, you will have to pay both U.S. and foreign taxes, but in the U.S. you can recoup some of this money by seeking foreign tax credits.

These credits can be available to companies that are taxed two times on the same income. However, the Internal Revenue Service will review the requests for these credits and does not always grant them. 

In order for the IRS to grant these tax credits, it will scrutinize the foreign taxes imposed and those that your company has accrued or paid. Should these taxes stem from legitimate transactions and meet other eligibility requirements, you could receive tax credits that decrease your liabilities.

However, the IRS has come up against serious problems with companies abusing these foreign tax credits. Most notably, the agency has found that companies conduct unnecessary or illegitimate transactions in an attempt to then recover more tax credits. Most recently, the U.S. Supreme Court reviewed bids by three companies seeking "hundreds of millions of dollars" in foreign tax credits and ultimately determined that they stemmed from abusive practices.

While there are ways that businesses can minimize tax liabilities and seek exemptions, it is crucial that this be done legitimately and in accordance with U.S. laws. Failure to do so can lead to serious penalties and a damaged reputation in the eyes of consumers. 

Because of all that is at stake when it comes to business and corporate taxes, it is crucial that business owners seek the support and counsel of an attorney familiar with this complex legal environment should questions or concerns arise. Doing so can help employers all across Georgia protect their company, their reputation and their financial bottom line.

Source: CNBC, "U.S. top court rejects challenge to IRS denying foreign tax credits," March 7, 2016

No Comments

Leave a comment
Comment Information
Email us for a Response

Talk to an Attorney

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

The Peck Group, LC
5855 Sandy Springs Circle N.E., Suite 190
Atlanta, GA 30328

Phone: 770-884-6914
Fax: 770-933-2369
Atlanta Law Office Map

Payment Cards