Over a year ago, we made a prediction that some changes in the foreign tax credit rules made by the Tax Cuts and Jobs Act were likely to elevate the importance of the relation-back doctrine (RBD). In particular, we suggested that the RBD, which deals with the timing for recognizing FTCs, can and should be applied when U.S. taxpayers or controlled foreign corporations have different foreign and U.S. tax years. We are pleased to report that the IRS has now fulfilled, at least in part, our prediction. Perhaps the IRS can be persuaded to go all the way toward adapting this 86-year-old judicial doctrine to properly align with today’s statutory framework for the FTC mechanism. Ken Brewer and Nick McBee share their insights with Tax Notes.

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