Action prompted by concerns that settlements of EU State Aid tax investigations may result in inappropriate foreign tax credit splitter structures.

On September 15, 2016, the US Internal Revenue Service (the IRS) issued Notice 2016-52 (the Notice), stating that it intends to issue regulations under Section 9091 to broaden the scope of existing foreign tax credit (FTC) splitter rules. In the Notice, the IRS made clear its concern that payments of foreign taxes attributable to the recent high profile EU State Aid investigations could allow taxpayers to separate a large tax payment from the income to which it relates for FTC purposes, thus apparently violating the policy Congress set forth in enacting Section 909 as part of the Education, Jobs and Medicaid Assistance Act of 2010.