Code §6511(d)(3)(A) provides that if the claim for credit or refund relates to an overpayment attributable to any taxes paid or accrued to any foreign country for which credit is allowed under Code §901, in lieu of the 3-year period of limitation prescribed in Code §6511(a), the period is 10 years “from the date prescribed by law for filing the return for the year in which such taxes were actually paid or accrued.” (the language was slightly different prior to 1997).
“Congress provided a special 10-year limitations period for filing a refund claim for foreign taxes * * * out of concern that a taxpayer may be barred from asserting a claim if foreign governments adjust the foreign tax liabilities after the initial three-year period.”
Albemarle Corp. v. U.S., 797 F.3d 1011 (Fed. Cir. 2015)
Rev. Rul. 84-125 provides a comprehensive example of the mechanics of accruing foreign income taxes that are asserted by a foreign government but are contested by the taxpayer. The revenue ruling also discusses the 10 year limitations period under Code §6511(d)(3)(A).
We have created a situational chart of Rev. Rul. 84-125. An image of the chart is shown below and a link to a PDF of the chart is at Rev. Rul. 84-125 (PDF).