The Supreme Court has declined to review a decision of the Court of Appeals for the Federal Circuit that denied, as time-barred, a corporation's refund claim for disputed foreign tax credits (FTCs).
The Federal Circuit concluded that the 10-year statute of limitation period in Code Sec. 6511(d)(3)(A) for filing such claims began with date for filing the return for the year in which the foreign taxes originated, and not for the year in which the amount of the contested foreign taxes was finally settled. Albemarle Corp v. U.S., (CA Fed Cir 8/13/2015) 116 AFTR 2d 2015-5609, rehearing denied (CA Fed Cir 10/22/2015) 116 AFTR 2d 2015-6563, cert denied 4/18/2016.
On May 15, 2009, seven years after the Belgian withholding taxes were paid by Albemarle S.A., plaintiff filed with the United States IRS "an administrative refund claim in the form of an amended consolidated income tax return (Form 1120-X) for the 2002 tax year." Although the settlement with the Belgian tax authorities was finalized, and the taxes were paid, in 2002, plaintiff did not file protective refund claims for the tax years at issue.
The U.S. Court of Federal Claims had previously ruled that Louisiana-based chemical manufacturer Albemarle couldn't claim $825,846 in foreign tax credits for taxes a foreign subsidiary paid to Belgium because the 10-year statute of limitations under tax code Section 6511(d)(3)(A) related back to the tax years of the income at issue and not the year the company settled the liability with Belgian tax authorities.
Judge Marian Blank Horn originally ruled that Albemarle's claims accrued in 1997 and 1998, when its subsidiary received debenture payments that it believed weren't subject to Belgian tax, instead of 2002, when the company reached an agreement with the Belgian tax authorities as to the existence and amount of the tax liability.
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