PRIA Logo™
Title 26, Internal Revenue CodeRelease 119-110

§908 Reduction of Credit for Participation in or Cooperation with an International Boycott

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

Last updated Sep 22, 2026|Official source

Summary

If a person (or a member of a related-business group that includes that person) takes part in or helps with an international boycott in a tax year, the foreign tax credit they would otherwise get is cut. The cut is found by multiplying the full credit by the "international boycott factor" set under the other rule. The result is the amount of credit lost. Two other tax rules named in the code do not apply to any part of the credit that gets denied. Definitions: "controlled group" — related businesses (defined elsewhere); "international boycott" — taking part in or helping a boycott (defined elsewhere); "international boycott factor" — the multiplier set under the other rule.

Full Legal Text

Title 26, §908

Internal Revenue Code, Source: USLM XML via OLRC

(a)In general
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)
(2)the international boycott factor (determined under section 999).
(b)Application with section 275(a)(4) and 78
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

Sep 22, 2026

Release point: 119-110