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Department of the Treasury
Internal Revenue Service
Instructions for Schedule C

(Form 1116)

(Rev. December 2022)
Foreign Tax Redeterminations

Section references are to the Internal Revenue Code Use Part III to report foreign tax redeterminations that
unless otherwise noted. resulted in a change in the amount of foreign income
taxes paid or accrued in any relation back year.
Future Developments Use Part IV to report foreign tax redeterminations that
resulted in a change in the U.S. tax liability for any relation
For the latest information about developments related to back year or other affected tax year(s) (for example, by
Schedule C (Form 1116) and its instructions, such as reason of a change in allowable foreign tax credit
legislation enacted after they were published, go to carryovers).
IRS.gov/Form1116. Use Part V, beginning with the 2023 tax year, to satisfy
the annual reporting requirement under Regulations
What’s New
section 1.905-1(d)(4)(iv) for contested foreign income
Schedule C has been revised. Part I, column 13, now taxes for which the taxpayer claimed a provisional foreign
requests "Reference ID Number for Contested Tax, if tax credit.
applicable" to reflect Regulations section 1.905-1(d)(4)
and new Form 7204, Consent To Extend the Time To Who Must File
Assess Tax Related to Contested Foreign Income Any taxpayer that has a foreign tax redetermination under
Taxes—Provisional Foreign Tax Credit Agreement. section 905(c) must complete this schedule and attach it
We added new Part V, Annual Reporting for Contested to the U.S. income tax return for the tax year in which the
Taxes, to be used by taxpayers beginning with the 2023 foreign tax redetermination occurs. This schedule must be
tax year to comply with the annual notice requirement filed irrespective of whether the foreign tax
described in Regulations section 1.905-1(d)(4)(iv). For redetermination changed your U.S. tax liability.
each tax year following the year in which a provisional Note. If your U.S. tax liability for any year changes by
foreign tax credit election is made on Form 7204, up to reason of the foreign tax redetermination, you must file an
and including the tax year in which the contest is resolved, amended return for the tax year with respect to which the
the taxpayer must provide the information requested in U.S. tax liability is adjusted, in addition to filing
Part V. Schedule C for the year in which the foreign tax
redetermination occurs. See Foreign Tax
Redeterminations in the Instructions for Form 1116 for
General Instructions
additional information regarding foreign tax
Purpose of Schedule redeterminations that result in a change in U.S. tax liability
and the related reporting requirements.
Schedule C (Form 1116) is used to identify foreign tax
redeterminations that occur in the current tax year in each If a foreign tax redetermination doesn’t change the
separate category, the years to which they relate, and amount of U.S. tax due for any tax year, you don’t need to
other information that satisfies your obligation to notify the file an amended return. You satisfy your reporting
IRS of foreign tax redeterminations that occurred in the requirements under Regulations section 1.905-4(b)(1)(v)
current year that relate to prior years. with respect to the foreign tax redetermination by filing a
Schedule C with the return for the tax year in which the
Use Part I to report foreign income tax redeterminations foreign tax redetermination occurs.
that resulted in an increase in the amount of foreign
income taxes accrued and paid by the taxpayer. Definitions
Note. If you claim credit for foreign income taxes on the Foreign tax redetermination. A foreign tax
cash basis method of accounting (you checked the box redetermination means a change in the liability for foreign
for “Paid” on Form 1116, Part II), and you pay additional income taxes including if:
foreign income taxes that relate to a prior tax year, that • Accrued foreign income taxes when paid or later
isn’t a foreign tax redetermination. You don’t report those adjusted differ from the amounts claimed as credits
additional foreign income taxes paid in Part I of (including corrections to accrued amounts to reflect final
Schedule C. You report those as foreign income taxes foreign income tax liability and additional payments of tax
paid on Form 1116, Part II, filed for the tax year in which that accrue after the close of the tax year to which the tax
you paid the additional foreign income taxes. relates);
Use Part II to report foreign tax redeterminations that • Accrued foreign income taxes aren’t paid within 24
resulted in a decrease in the amount of foreign income months after the close of the tax year to which they relate;
taxes paid or accrued by the taxpayer. or

Jan 10, 2023 Cat. No. 37575M

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• Any foreign income tax paid is fully or partially tax directly, enter your name. If the tax was paid by a
refunded. pass-through entity, such as a partnership, in which you
have an ownership interest, enter the information for that
Relation back year. Relation back year means the U.S.
entity.
tax year in which the foreign income taxes being
redetermined were originally taken into account. For additional information on EINs and reference IDs,
Example. In U.S. tax year 1, you took into account $2 see Reference ID numbers in the Instructions for Form
million of Country X foreign income taxes accrued with 1118.
respect to the foreign tax year that ended within U.S. tax Parts I and II, column 3. Enter the code for the
year 1. In year 3, Country X assessed an additional $1 country or U.S. possession to which tax is paid using the
million of foreign income taxes with respect to the foreign country codes provided at IRS.gov/CountryCodes.
tax year that ended within U.S. tax year 1. The relation Parts I and II, column 6. Enter the payor’s income
back year is U.S. tax year 1. subject to tax in the foreign jurisdiction, as reported on the
foreign tax return.
Affected tax year. Affected tax year means any tax year
Parts I and II, column 9. Enter the exchange rate
for which the U.S. tax liability is changed as a result of a
originally used to convert the local currency (in which the
foreign tax redetermination. This includes tax years in
redetermined foreign tax was paid) to U.S. dollars.
which the U.S. tax liability is changed as a result of a
change in a carryover of a tax attribute, such as a foreign Parts I and II, column 11. Enter the U.S. dollar
tax credit carryover or a net operating loss carryover, from amount of foreign income tax of each payor that was
a relation back year. reported by the taxpayer on its original or amended return
(not taking into account the foreign tax redetermination).
Functional currency. Functional currency means the
dollar, or in the case of a qualified business unit (QBU), Part I
the currency of the economic environment in which a
Columns 4 and 5. Enter the date(s) the additional
significant part of such unit’s activities are conducted and
foreign income taxes were paid and the ending date of the
which is used by such unit in keeping its books and
foreign tax year to which such taxes relate.
records. See section 985(b).
Column 7. Enter the amounts of additional foreign
Reference ID number for contested tax. See the
income tax accrued in the local currency in which the tax
Instructions for Form 7204 for the definition of and
is payable.
requirements for the reference ID number for contested
foreign income tax. Column 8. Enter the amounts of the additional foreign
income tax denominated in the functional currency of the
payor that accrued the additional foreign income tax.
Specific Instructions
Column 13. Enter the reference ID number for the
Important: All information reported on Schedule C must contested foreign income tax, if applicable, using the
be in English. All amounts must be stated in U.S. dollars, reference ID number reported on Form 7204 filed with
unless otherwise specified on the schedule. respect to the contested foreign income tax.
If there are more than three payor entities for a relation
Part II
back year, attach a statement that lists all information
requested on Schedule C for those payor entities Columns 4 and 5. Enter the date(s) the foreign income
following the format of Schedule C. If there are more than taxes were refunded or deemed refunded and the ending
2 relation back years (Parts I, II, III, or IV), there are other date of the foreign tax year to which such taxes relate. If
affected years in addition to the relation back years (Part the foreign income taxes are deemed refunded by reason
IV), or more than 5 relation back years (Part V), attach a of the section 905(c)(2) two-year rule described in the
statement that lists all information requested on Note in the instructions for column 13, enter in column 4
Schedule C for those years following the format of the date that is 24 months after the close of the tax year to
Schedule C. which the foreign income taxes relate.
Checkboxes at top of page 1. Use a separate Column 7. Enter the amount of the foreign income tax
Schedule C for each applicable category of income and refunded or deemed refunded in the local currency in
check the corresponding box. Check only one box for which the foreign income tax is payable.
each completed Schedule C. Column 8. Enter the amount refunded or deemed
See Categories of Income in the Instructions for Form refunded denominated in the functional currency of the
1116 for additional information regarding separate payor that paid or accrued the refunded amount.
categories. For country codes on lines (h) and (i), see
IRS.gov/CountryCodes for the code to use. Column 13. Check the box if the foreign tax
redetermination is a result of the application of the section
Parts I, II, III, and IV, column 1. In this column, enter the 905(c)(2) two-year rule.
ending date of the relation back year or affected year (Part
IV). Note. Under section 905(c)(2), if accrued foreign income
taxes aren’t paid on or before the date that is 24 months
Parts I and II, columns 2a and 2b. In columns 2a and
after the close of the tax year to which they relate
2b, enter the name and the employer identification
(two-year rule), there is a resulting foreign tax
number (EIN) or reference ID of the payor. If you paid the
redetermination that is accounted for as if the unpaid

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portion of the foreign income taxes were refunded on that of contested foreign income tax that was provisionally
date. Credit may be claimed for those taxes if and when claimed as credit.
they are ultimately paid. Foreign income taxes that first
Columns 6 and 7. Check the box in column 6 if the
accrue after the date 24 months after the close of the tax
contest is still ongoing and check the box in column 7 if
year to which the taxes relate may not be claimed as a
the contest was resolved.
credit until paid.
Columns 8 and 9. Enter the date the contest was
Part III resolved and the amount of foreign income tax refunded
Columns 2 and 3. Enter the redetermined foreign or additional foreign income tax paid, if any. Any portion of
income taxes paid or accrued and the foreign income a contested foreign income tax for which a provisional
taxes paid or accrued per your original or previously credit is claimed that is subsequently refunded results in a
amended return. foreign tax redetermination that must be reported on
Schedule C and, if applicable, an amended return for the
Columns 4 and 5. Enter the total amount of foreign tax tax year(s) for which the U.S. tax liability changes as a
credit claimed in the separate category on your original or result of such foreign tax redetermination.
previously amended return and the total amount of foreign
tax credit claimed after the foreign tax redetermination. Additional Information
For more information, see section 905(c) and Regulations
Part IV sections 1.905-1, 1.905-3, 1.905-4, and 1.905-5.
Columns 2 through 4. Enter the total redetermined U.S.
tax liability, the total U.S. tax liability reported on your Paperwork Reduction Act Notice.
original or previously amended return, and the difference We ask for the information on Schedule C to carry out the
(subtracting column 3 from column 2) for each affected Internal Revenue laws of the United States. You're
tax year. required to give us the information. We need it to ensure
Part V that you're complying with these laws and to allow us to
figure and collect the right amount of tax.
Don't complete Part V for the 2022 tax year.
You're not required to provide the information
CAUTION enter the information requested on Schedule C,
! Beginning with the 2023 tax year, taxpayers will requested on a form that is subject to the Paperwork
Part V, using the instructions provided next. Reduction Act unless the form displays a valid OMB
control number. Books or records relating to a form or its
Column 1. For taxpayers that claim credits on the instructions must be retained as long as their contents
accrual basis, enter the relation back year. For taxpayers may become material in the administration of any Internal
that claim credits on the cash basis, enter the year in Revenue law. Generally, tax returns and return
which the contested foreign income tax was remitted to information are confidential, as required by section 6103.
the foreign country. The tax year entered on column 1
should correspond with the tax year entered on line 1 on The time needed to complete and file Schedule C will
Form 7204 that was filed in order to claim a provisional vary depending on individual circumstances. The
credit for the contested foreign income tax. estimated burden for individual taxpayers filing this form is
approved under OMB control number 1545-0074 and is
Column 2. Enter the name of the payor. If you paid the included in the estimates shown in the instructions for
tax directly, enter your name. If the tax was paid by a their individual income tax return. The estimated burden
pass-through entity, such as a partnership, in which you for all other taxpayers who file this form is
have an ownership interest, enter the name of that entity. Recordkeeping, 13 min.; Learning about the law or
Column 3. Enter the reference ID number for the the form, 14 min.; Preparing the form, 38 min.
contested foreign income tax that was used on Form
If you have comments concerning the accuracy of
7204.
these time estimates or suggestions for making this form
Columns 4 and 5. Enter the code of the country or U.S. simpler, we would be happy to hear from you. You can
possession to which the tax was paid using the country write to the IRS at the address listed in the instructions of
codes provided at IRS.gov/CountryCode and the amount the tax return with which this form is filed.

Instructions for Schedule C (Form 1116) (Rev. 12-2022) -3-

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