PPL Corp. v. Comm'r of Internal Revenue

In 1997, the United Kingdom (U.K.) imposed a one-time "windfall tax" on 32 U.K. companies privatized between 1984 and 1996. This case addresses whether that tax is creditable for U.S. tax purposes. Internal Revenue Code § 901(b)(1) states that any "income, war profits, and excess profits taxes" paid overseas are creditable against U.S. income taxes. 26 U.S.C. § 901(b)(1). Treasury Regulations interpret this section to mean that a foreign tax is creditable if its "predominant character" "is that of an income tax in the U.S. sense." Treas. Reg. § 1.901-2(a)(1)(ii), 26 C.F.R. § 1.901-2(a)(1)…