Tax News

CCH (cch.taxgroup.com) reports:

The IRS is investigating whether the Mexican single rate business tax (IETU), to be effective beginning January 1, 2008, is a creditable income tax under Article 24 of the Convention Between the Government of the United States of America and the Government of the United Mexican States for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (Treaty). Article 24 of the Treaty allows for a credit for income tax paid to Mexico by or for a U.S. citizen. Pending the outcome of the investigation, the IRS will not challenge a taxpayer's assertion that the Mexican single rate business tax qualifies under Article 24 of the Treaty.
Notice 2008-3, 2007FED ¶46,748
Notice 2008-3, TRET ¶26,282
Other References:
Code Sec. 894
CCH Reference - 2007FED ¶27,642.11
Code Sec. 901
CCH Reference - 2007FED ¶27,826.032
CCH Reference - 2007FED ¶27,826.259
Tax Research Consultant
CCH Reference - TRC INTL: 18,058
CCH Reference - TRC INTL: 18,058.10