foreign tax credit

.A tax credit against U.S. income taxes for a taxpayer who earns income overseas and has paid foreign taxes on that income. See FOREIGN-EARNED-INCOME EXCLUSIONN. [Cases: Internal Revenue 4098. C.J.S. Internal Revenue § 481.] “Since direct foreign investments and business operations of United States persons often attract foreign income taxes along with the baseline U.S. tax, the specter of double taxation is bound to haunt the pursuit of foreign income. The principal accommodation of the U.S. tax system to the possibility of source-based taxation by other countries is the foreign tax credit. From a simple idea — a dollar-for-dollar reduction of U.S. tax for income taxes paid to foreign countries — the foreign tax credit has evolved into an elaborate statutory structure capable of engulfing an
entire professional career.” Joseph Isenbergh, International Taxation 14 (2000).
[Blacks Law 8th]