IRS Chief Counsel determines that ten-year period of limitations does not apply to refund claims based on foreign tax deductions

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In a Chief Counsel Advice (CCA) memorandum, dated October 21, 2011 and released January 27, 2012, Chief Counsel of the Internal Revenue Service (IRS) rejected as untimely the claim of a US consolidated return group parent corporation for a refund based on an election to deduct, rather than credit, foreign taxes paid by a subsidiary in a past tax year. The CCA concluded that the refund claim was untimely because the special ten-year period of limitations provided by section 6511(d)(3)(A) only applied if the refund claim related to an overpayment attributable to any taxes paid or accrued for which credit, and only a credit, is claimed against US income tax under section 901. The ten-year period was not applicable to the taxpayer's refund claim based on a deduction of foreign income taxes paid.


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