Monday, August 6, 2018
Bloomberg, IRS Blocks Refund for Companies Overpaying Offshore Profits Tax:
There’s bad news for companies that may have accidentally overpaid this year’s "repatriation" taxes on foreign profits: they won’t be getting a refund.
The Internal Revenue Service said in a legal memorandum dated Thursday that it won’t rebate any such overpayments or credit them toward tax bills not tied to repatriation, such as annual bills for corporate income.
“A lot of taxpayers” who had expected reimbursement “are going to be disappointed,” Robert Willens, an independent tax and accounting expert, wrote in a client note Friday. "No such refund will be forthcoming.”
Multinationals that likely overpaid include those in the pharmaceutical and technology sectors, such as Pfizer and Apple, because they have the largest stockpiles of foreign profits, Willens said. ...
Clinton Wallace, a law professor at the University of South Carolina, said the “overpaid” money isn’t gone, though the use of it is limited to paying the rest of the installments. "Any extra amounts paid for 2017 by taxpayers electing to pay in installments can only be applied to the next installment," he said. "It cannot be applied to offset other tax payments."
Still, companies that overpaid would prefer a refund or a credit against their 2018 overall corporate tax bills. “The last thing you want” is credit against future repatriation installments, because they’re interest-free, Willens said. “You don’t want to pre-pay an interest-free loan."