Federal Register #2026-18645

IRS Proposed Rule on Allocation and Apportionment of Deductions to Foreign Source Section 951A Category Income

This opportunity involves a proposed rule issued by the Internal Revenue Service (IRS) under the Treasury Department, focusing on the allocation and apportionment of deductions to foreign source section 951A category income. - Government Buyer: - Internal Revenue Service (IRS), Department of the Treasury - OEMs and Vendors: - No OEMs or vendors are mentioned; this is a regulatory action, not a procurement - Products/Services Requested: - No products or services are requested - Notable Requirements: - Guidance provided for allocation and apportionment of interest expense, research and experimental expenditures, and other deductions related to foreign source income - Requirements for recordkeeping and compliance with new allocation methods - Public comments and requests for a hearing are invited - No contract vehicles, procurement procedures, or acquisition details are included, as this is not a solicitation for goods or services.

Description

This proposed rule addresses the allocation and apportionment of deductions to foreign source section 951A category income for foreign tax credit limitation purposes and for calculating deduction eligible income. It affects taxpayers operating in foreign countries through foreign corporations and domestic corporations claiming deductions for foreign-derived deduction eligible income. The rule provides guidance on how to allocate and apportion interest expense, research and experimental expenditures, and other deductions related to foreign source income. Comments and requests for a public hearing must be received by November 10, 2026.

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