In 2019, the United States and the French Republic memorialized through diplomatic communications an understanding that the French CSG (Contribution Sociale Generalisee) and CRDS (Contribution au Remboursement de la Dette Sociate) taxes are not social taxes covered by the Agreement on Social Security between the two countries.

Accordingly, the IRS will not challenge foreign tax credits for CSG and CRDS payments on the basis that the Agreement on Social Security applies to those taxes.

The IRS’s change in policy means individual taxpayers, who paid or accrued these taxes but did not claim them, can file amended returns to claim a foreign tax credit.

Generally individual taxpayers have ten (10) years to file a claim for refund of U.S. income taxes paid if they find they paid or accrued more creditable foreign taxes than what they previously claimed. The 10-year period begins the day after the regular due date for filing the return (without extensions) for the year in which the foreign taxes were paid or accrued.  This means that amended returns may be filed, using Form 1040-X to include accompanying Form 1116, going back to tax year 2009.

Individual taxpayers should write “French CSG/CRDS Taxes” in red at the top of Forms 1040-X, file them with accompanying Forms 1116 in accordance with the instructions for these forms. U.S. employers may not file for refunds claiming a foreign tax credit for CSG/CRDS withheld or otherwise paid on behalf of their employees.

                                                                                                                                            Source IRS

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