Damn. I waited on hold for an eternity to talk to the IRS (actually, only about 15 minutes, but it makes the story sound better to start off bitching about the wait).
I’ve got a couple of questions concerning Form 1116 Foreign Tax Credit and example of how the carryover for foreign tax credit is calculated.
I file my US taxes every year, although I don’t owe anything (as I live in a foreign country, I get a really high foreign earned income exclusion, and then am able to get credit for a percentage of my relatively high Japanese taxes).
However, in 2010, because of (long explanation here), my Japanese taxes weren’t enough to offset the US ones so I’m looking at how to calculate the carryover from previous years. I read through the example on Publication 514 Foreign Tax Credit for Individuals and think I understand. I will make a significant difference for me.
However, since it’s a fairly good amount of money, I call the IRS to confirm if my understanding is correct. First, I try one of the branches overseas, and the guy clearly is wrong.
So I call the center in Philadelphia, which is when I get put on hold.
I ask and the guy says he don’t know! I walk through the example in P514 and he says it seems to be correct, but that “seems to be” bothers the hell out of me. There isn’t anyone he can ask, so he advises me to use a professional!
These are their rules, and they don’t know how it works?