- 28 -
even if another party to a transaction agrees, as part of the
transaction, to assume the taxpayer’s foreign tax liability on the
taxpayer’s behalf. See sec. 1.901-2(f)(2), Income Tax Regs.
Issue 1. The Payment Issue
Petitioner bears the burden of proving that the Brazilian
income taxes for which it claims a credit were paid. See secs.
901(b)(1), 905(b);13 see also Continental Ill. Corp. v.
Commissioner, 998 F.2d 513, 516-517 (7th Cir. 1993) (the taxpayer
must establish foreign taxes for which it claims credit were not
only withheld, but paid), affg. on this point T.C. Memo. 1991-66;
Lederman v. Commissioner, 6 T.C. 991, 998-999 (1946) (holding that
pursuant to Treasury regulations, proof of the amount of the foreign
income tax withheld at the source will support a taxpayer’s claim
13 Sec. 905(b) provides:
SEC. 905(b). Proof of Credits.–-The credits
provided in this subpart shall be allowed only if the
taxpayer establishes to the satisfaction of the
Secretary --
(1) the total amount of income derived
from sources without the United States,
determined as provided in part I,
(2) the amount of income derived from
each country, the tax paid or accrued to
which is claimed as a credit under this
subpart, such amount to be determined under
regulations prescribed by the Secretary, and
(3) all other information necessary for
the verification and computation of such
credits.
Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 NextLast modified: May 25, 2011