(b) If any taxes paid to another state or country for which a taxpayer has been allowed a credit under this section are at any time credited or refunded to the taxpayer, a tax equal to that portion of the credit allowed for the taxes so credited or refunded is due and payable from the taxpayer and is subject to the penalties and interest provided in Subchapter I of this Chapter.
Seems pretty clear to me. No credit for a credit.
In reviewing many of those returns, the credit was taken on the NC return as well as the federal return.
You reduce the amount of foreign taxes paid by any ANY credits or refunds given for those foreign taxes. This includes foreign tax credits on the federal return.
NC is not going to give credit for tax paid, even indirectly, to a foreign jurisdiction simply because the taxpayer chooses not to file a claim for refund in the foreign country.
Well, at least they don't give the credit officially.
We filed it as one number.
.Ask them if the amount used for the credit should be reduced by any amounts taken as a credit on the federal return
Jeff-Ohio wrote:
It is obviously talking about “credited or refunded” by the foreign jurisdiction. It is not talking about the U.S. Federal government. And it is not talking about a “credit” as in having a federal foreign tax “credit” allowed. Your argument makes zero sense. Wake up guys. The Large Firm, like the one referenced in Post #8, isn’t stupid.
I would not say that is wrong.
Does it make it right?
Will it pass in an audit?
I don't recall saying that the large firm was stupid.
Says who? Based upon what? A clear reading of the statute? If fed allows a credit, the NC credit needs to be reduced by that amount.
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