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intended only to designate the taxpayer as the foreign
corporation paying the dividend, as opposed to the domestic
corporation receiving the dividend.
In Xerox Corp. v. United States, 14 Cl. Ct. 455 (1988), the
U.S. Claims Court was presented with the same issue presented in
the instant case. In Xerox, a first-tier U.K. subsidiary
corporation paid a dividend to its U.S. parent corporation and
allocated the corporate offset to second-tier U.K. subsidiary
corporations. See id. at 460-461. The U.S. parent corporation
claimed a foreign tax credit for the unrefunded portion of the
ACT paid by the first-tier subsidiary. See id. The Claims Court
found that the language of the U.S.-U.K. Convention did not
support the taxpayer’s contentions that the ACT paid by the
first-tier subsidiary was creditable to the parent corporation
without regard to the subsequent allocation of the corporate
offset. See id. at 462. Rather, the Claims Court looked to the
Technical Explanation of the U.S.-U.K. Convention (Technical
Explanation), 1980-1 C.B. 455, Rev. Proc. 80-18, 1980-1 C.B. 623,
and the Competent Authority Agreement which resulted from the
exchange of correspondence between Mr. P.W. Fawcett and Mr. P.E.
Coates pursuant to Article 25 of the U.S.-U.K. Convention to
determine the intent of the parties negotiating the U.S.-U.K.
Convention. See id. at 463-466. The Claims Court found that the
intention of the parties negotiating the U.S.-U.K. Convention was
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