The IRS today posted a joint directive from the Large Business and International (LB&I) and Small Business/Self-Employed (SBSE) divisions as guidance for IRS examiners on the creditability of two French social taxes—the “contribution sociale généralisée” (CSG) and the "contribution pour le remboursement de la dette sociale" (CRDS)—for U.S. federal income tax purposes.
The directive—LB&I-04-0819-007 (dated August 6, 2019, and posted August 19, 2019)—states a change in IRS policy, specifically that the IRS no longer maintains a position that the CSG and CRDS are ineligible for a foreign tax credit under section 901.
IRS examiners are thus directed not to challenge taxpayer claims for foreign tax credit for CSG and CRDS payments (including claims for tax refunds) and are not to assert that the CSG and CRDS are not creditable income taxes for U.S. tax purposes.
According to the directive:
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