IRS PLR: Refund Interest from Foreign Tax Refund Considered Not Interest (IRC §165)

The IRS has published a private letter ruling on I.R.C. §165, determining that: 1) the refund interest that a foreign subsidiary received from a foreign agency, with respect to a foreign tax refund, is not “interest” for purposes of §165(g)(3)(B); and 2) despite never generating gross receipts from its intended business activity, the foreign subsidiary meet the gross receipts test for activity related to certain leases in Foreign Region A, because the foreign subsidiary was an operating company. [PLR 202551026]

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