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I. Introduction Throughout the 1990s, taxpayers were very dissatisfied with the Internal Revenue Service's ("IRS'") poor quality of service, and "Congress grew increasingly frustrated with the IRS due to its [...], In 2022, two Tax Court decisions in Code Sec. 6751(b)(1) cases were reversed by the Circuit Courts, which caused consternation among some tax professionals, practitioners, and the Tax Court. One was the Tax Court decision in Laidlaw's Harley Davidson Sales Inc. v. Commissioner, (1) which was reversed by the Ninth Circuit Court of Appeals for the IRS in March 2022. The Eleventh Circuit Court of Appeals followed suit and reversed the Tax Court decision in Kroner v. Commissioner (2) in September 2022 in favor of the IRS. Code Sec. 6751(b)(1) states that "No penalty under this title shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination or such higher level official as the Secretary may designate." (3) The statute indicates who must approve and how that approval must be made, but the statute does not specify when that approval must be obtained, nor does the statute define what "the initial determination of such assessment" means. This ambiguity in Statute language has been the crux of disputes in Code Sec. 6751(b) cases because taxpayers, the IRS, and judges have different interpretations of Code Sec. 6751(b)(1). These two circuit courts' interpretations of Code Sec. 6751(b)(1) are a sharp departure from the Code Sec. 6751(b) jurisprudence that the Tax Court has developed in the past few years and have created chaos at the Tax Court. The focus of this article is to discuss the purpose of Code Sec. 6751(b)(1), examine how courts interpret and apply Code Sec. 6751(b)(1) in various cases, and analyze the controversies among the interpretations and judgments.

I. Introduction Prior to 1962, U.S. tax regime generally allowed multinational corporations to defer tax on the income earned by their foreign subsidiaries until the income was repatriated to the [...], There are several categories of income under the umbrella of Subpart F that is subject to U.S taxes in the year in which it is earned by a controlled foreign corporation ("CFC"). One of the categories is Foreign Base Company Sales Income ("FBCSI"). Code Sec. 954(d)(1) sets forth the general rule defining FBCSI and identifies four types of personal property transactions that a CFC derives FBCSI involving related persons outside the CFC's country of organization. Code Sec. 954(d)(2) provides a special branch rule that applies in situations where the carrying on of activities by a CFC through a branch outside the country of incorporation of the CFC has substantially the same tax effect as if such branch were a wholly owned subsidiary corporation deriving such income} The branch rule prevents a U.S. shareholder from avoiding Code Sec. 954(d)(1) by having its CFC conduct activity through a branch rather than a related person. Reg. [section]1.954-3 further defines FBCSI and provides exceptions where a CFC can exclude its sales income from FBCSI. The focus of this article is to discuss the purpose of Code Sec. 954(d)(1) and (d)(2) and Reg. [section]1.954-3 and examine how the courts applied these statutes and regulations in making judgment in Whirlpool Financial Corporation v. Commissioner (2) and analyze why this case is so controversial.

I Introduction The United States generally imposes tax on worldwide source income of U.S. citizens, residents, and domestic corporations except for the participation exemption provided by the Tax Cuts and [...], For a foreign levy to be creditable, it must meet certain requirements imposed by statutes and Treasury Regulations. One of the requirements is that the foreign levy must be a tax. For a foreign levy to qualify as a tax, the levy must be imposed upon a taxpayer by the foreign law and is compulsory in nature. The other requirement is that a tax must have "the predominant character of an income tax in the U.S. sense" (1) or be a tax in lieu of an income tax. The predominant character requirement is met if a foreign tax is "likely to reach net gain in the normal circumstances in which it applies." (2) A foreign tax is likely to reach net gain if and only if the tax satisfies each of the realization, gross receipts, and net income requirement. (3) The focus of this article is to discuss these requirements for a foreign tax to be creditable and examine how the courts apply the statutes and regulations in making judgments in various foreign tax credit cases.