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We have over 60 years of direct work experience at the IRS and over 205 years of professional tax experience.

You can call us anytime for a free tax consult and speak directly to  Tax Attorneys, Lawyers, CPAs or former IRS agents. 1-866-700-1040.

The IRS is seriously cracking down on overseas taxpayers, FBAR and EX-PATS.

The IRS found a whopping $4.4 Billion in the FBAR Program alone. US Citizens who live abroad who file and pay correctly have nothing at all to worry about.

One of the best save to minimize to minimize your tax debt is know and understand the Foreign Tax Credits and the laws that surrounding tax credits.

Because of our extensive background with the IRS we can really help minimize your IRS taxes or tax debt.

Trends and Facts

U.S. taxpayers claimed over $90 billion of foreign tax credits on US individual and corporate tax returns in 2005.

Foreign tax credits allow US taxpayers to avoid or reduce double taxation. You may choose to take a deduction for foreign taxes paid instead of choosing a credit. In most cases, it is to your advantage to take foreign income taxes as a tax credit.

How to Qualify for Foreign Taxes
You can claim a credit only for foreign taxes that are imposed on you by a foreign country or US possession. Generally, only income, war profits and excess profits taxes qualify for the credit.

What  Foreign Taxes Qualify For The Foreign Tax Credit?

Generally, the following four tests must be met for any foreign tax to qualify for the credit:

1. The tax must be imposed on you
2. You must have paid or accrued the tax
3. The tax must be the legal and actual foreign tax liability
4. The tax must be an income tax (or a tax in lieu of an income tax)

How you can claim the Foreign Tax Credit
File Form 1116 Foreign Tax Credit to claim the foreign tax credit if you are an individual, estate or trust, and you paid or accrued certain foreign taxes to a foreign country or U.S. possession. Corporations file Form 1118 to claim a foreign tax credit.

Tax Compliance Issues with the Internal Revenue Service

The amount of foreign tax that qualifies is not necessarily the amount of tax withheld by the foreign country.

If you are entitled to a reduced rate of foreign tax based on an income tax treaty between the United States and a foreign country, only that reduced tax qualifies for the credit.
If a foreign tax re-determination occurs, a re-determination of your US tax liability is required in most situations.

You must file a Form 1040X or Form 1120X. Failure to notify the IRS of a foreign tax re-determination can result in a failure to notify penalty.
A foreign tax credit may not be claimed for taxes on excluded income.

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