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Title 26 — Internal Revenue CodeRelease 119-73

§908 Reduction of credit for participation in or cooperation with an international boycott

Title 26 › Subtitle Subtitle A— - Income Taxes › Chapter CHAPTER 1— - NORMAL TAXES AND SURTAXES › Subchapter Subchapter N— - Tax Based on Income From Sources Within or Without the United States › Part PART III— - INCOME FROM SOURCES WITHOUT THE UNITED STATES › Subpart Subpart A— - Foreign Tax Credit › § 908

Last updated Apr 6, 2026|Official source

Summary

If a person, or a member of a controlled group (see section 993(a)(3)), takes part in or helps an international boycott (see section 999(b)) in a taxable year, the foreign tax credit they would get under section 901 (or under section 960 for U.S. shareholders) is reduced. The cut equals the credit they would have had multiplied by the international boycott factor (set under section 999). Sections 275(a)(4) and 78 do not apply to the taxes for which the credit is denied.

Full Legal Text

Title 26, §908

Internal Revenue Code — Source: USLM XML via OLRC

(a)If a person, or a member of a controlled group (within the meaning of section 993(a)(3)) which includes such person, participates in or cooperates with an international boycott during the taxable year (within the meaning of section 999(b)), the amount of the credit allowable under section 901 to such person, or under section 960 to United States shareholders of such person, for foreign taxes paid during the taxable year shall be reduced by an amount equal to the product of—
(1)the amount of the credit which, but for this section, would be allowed under section 901 for the taxable year, multiplied by
(2)the international boycott factor (determined under section 999).
(b)section 275(a)(4) and section 78 shall not apply to any amount of taxes denied credit under subsection (a).

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

2017—Subsec. (a). Pub. L. 115–97 struck out “902 or” after “or under section” in introductory provisions.

Statutory Notes and Related Subsidiaries

Effective Date

of 2017 AmendmentAmendment by Pub. L. 115–97 applicable to taxable years of foreign corporations beginning after Dec. 31, 2017, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see section 14301(d) of Pub. L. 115–97, set out as a note under section 78 of this title.

Effective Date

Pub. L. 94–455, title X, § 1066(a), Oct. 4, 1976, 90 Stat. 1654, provided that: “(1) General rule.—The

Amendments

made by this part (other than by section 1065) [enacting this section and section 999 of this title and amending section 952 and 995 of this title] apply to participation in or cooperation with an international boycott more than 30 days after the date of enactment of this Act [Oct. 4, 1976]. “(2) Existing contracts.—In the case of operations which constitute participation in or cooperation with an international boycott and which are carried out in accordance with the terms of a binding contract entered into before September 2, 1976, the

Amendments

made by this part (other than by section 1065) apply to such participation or cooperation after December 31, 1977.”

Reference

Citations & Metadata

Citation

26 U.S.C. § 908

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73