DOCUMENTS REQUIRED TO CLAIM A U.S. FOREIGN TAX CREDIT

04 Jan DOCUMENTS REQUIRED TO CLAIM A U.S. FOREIGN TAX CREDIT

Prior to the summer of 2015, CRA often accepted copies of the U.S. tax returns, as support to claim a U.S. Foreign Tax Credit (FTC). The “Federal Account Transcript” was selected as alternative evidence the return provided to CRA was filed and assessed as filed.

Some practitioners report that obtaining “transcripts” from the Federal Government, and State Governments in particular, can be onerous, often requiring a request from the client rather than a representative.

Form T2209 Federal Foreign Tax Credits sets out the documents required to support foreign tax credit claims, including federal, state and municipal tax returns with all associated schedules and forms, a copy of the federal account transcript and an account statement or similar document from state and/or municipal tax authorities.

CRA recently changed its requirements, to accept proof of payments made or refunds received in lieu of a notice of assessment, transcript, statement or other document from the applicable foreign tax authority (FTA), provided all of the following information is clearly indicated:

• that the paymentwas made to or received from the FTA;
• the amountof the payment or refund;
• the tax yearto which the payment or refund relates; and
• the date of paymentof receipt.

Action Item: Request these documents before a CRA pre- or post-assessing review letter is received to expedite the FTC Claim.

To get a Federal transcript from the IRS, go to: www.irs.gov/individuals/get-transcript

This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.