# 2026-15614: Treasury rejigs foreign tax deferral drama for corps

2026-15614, Section 898(c) Transition Rule for Allocating Foreign Taxes and Section 960(d)(4) Foreign Tax Credit Disallowance, is a Federal Register proposed rule from Treasury Department, Internal Revenue Service published 2026-08-03, effective 2025-11-30; PRIA reads it as touching household money (as of 2026-08-10).

- Canonical: https://policyrisk.com/federal-register/2026-15614
- As of: 2026-08-10
- Plain-text twin of the page above; the HTML and this file carry the same facts.

## Facts
- Document number: 2026-15614
- Title: Section 898(c) Transition Rule for Allocating Foreign Taxes and Section 960(d)(4) Foreign Tax Credit Disallowance
- Type: Proposed Rule
- Agencies: Treasury Department; Internal Revenue Service
- Citation: 91 FR 48794
- Published: 2026-08-03
- Effective: 2025-11-30
- Comments close: 2026-09-17
- Significant: no
- Touches household money: yes
- Regulation identifier numbers: 1545-BR76
- Last updated: 2026-08-10

## In one line

Treasury rejigs foreign tax deferral drama for corps

## Summary

This document contains proposed regulations that relate to allocating foreign taxes of foreign corporations affected by the repeal of the one-month deferral election and to the disallowance of foreign tax credits on certain distributions of previously taxed earnings and profits. The proposed regulations would affect taxpayers that operate in foreign countries through certain foreign corporations and taxpayers that claim the foreign tax credit.

## Effects PRIA read

- Allocate foreign taxes after year change: benefit, medium. If you are a U.S. shareholder of a foreign corporation required to change its taxable year because the one-month deferral election was repealed, the proposed rules allocate certain foreign net income taxes between the corporation's "first required year" and its succeeding taxable year. The allocati…
- 10% foreign tax credit disallowance: cost, high. The proposed rules implement section 960(d)(4) to disallow 10 percent of any foreign income taxes paid or accrued (or deemed paid) with respect to distributions of previously taxed earnings and profits (PTEP) that result from a section 951A inclusion occurring in a U.S. shareholder's taxable year e…
- Elections and paperwork for affected shareholders: cost, low. Controlling domestic shareholders must make elections (for example, to not allocate taxes, to treat certain partnership tax shares as allocable, or to use income-group specific allocation) by attaching a statement to their timely filed federal income tax returns for the years in which (or with whic…

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## Sources
- [2026-15614 on federalregister.gov](https://www.federalregister.gov/documents/2026/08/03/2026-15614/section-898c-transition-rule-for-allocating-foreign-taxes-and-section-960d4-foreign-tax-credit)
- [2026-15614 as published (PDF)](https://www.govinfo.gov/content/pkg/FR-2026-08-03/pdf/2026-15614.pdf)

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- [All Federal Register documents](https://policyrisk.com/federal-register)

Source: PRIA, https://policyrisk.com/federal-register/2026-15614 (as of 2026-08-10).