J. Allen Sullivan, Jr. (Meadows, Collier, Reed, Cousins & Blau, Dallas) has published The Tax Credit Three-Step: Partnerships Liable for Foreign Taxes and Allocations of the Attendant Foreign Tax Credits, 41 Int’l Law. 923 (2007). Here is the abstract:

In recent years, the U.S. Department of the Treasury has begun a campaign to combat perceived abuses in the international tax arena. As a part of this campaign, the Treasury promulgated regulations attempting to bring clarity to allocations of foreign tax credits by entities treated as partnerships for U.S. tax purposes that are taxed at the entity level in a foreign jurisdiction. One set of regulations was issued in 2004 in temporary and proposed form, and, after a fairly brief comment period, the much improved finalized version of the regulations was issued in 2006. This article analyzes and compares the two sets of regulations. The regulations are a part of the distributive share rules of Section 704(b) of the Internal Revenue Code that govern whether a partnership’s allocations of income, loss, expense, etc. will be respected for federal tax purposes. Therefore, the article offers the reader a brief journey through the Section 704(b) rules before illustrating the role played by the new regulations within such rules. This brief journey is followed by a discussion of the new regulations including an example of the application of the safe harbor afforded by the new regulations.