Title 26: Internal Revenue
PART 301—PROCEDURE AND ADMINISTRATION
Collection
General Provisions
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§ 301.6316-6 Declarations of estimated tax.
(a) Filing of declaration. A declaration of estimated tax in respect of amounts on which the tax is to be paid in foreign currency under the provisions of §301.6316–1 shall be filed with the Director of International Operations, Internal Revenue Service, Washington, D.C. 20225, and shall have attached thereto the statements required by paragraph (b) (1) and (2)(i) of §301.6316–4 in respect of the tax return except that the statement certified by the foundation, commission, or other person having control of the payments to the taxpayer in nonconvertible foreign currency may be based upon amounts expected to be received by the taxpayer during the taxable year if they are not in fact known at the time of certification. A copy of this certified statement shall be retained by the taxpayer for the purpose of exhibiting it to the disbursing officer when making installment deposits of foreign currency under the provisions of paragraph (c) of this section. For the time for filing declarations of estimated tax, see sections 6073 and 6081 and §§1.6073–1 to 1.6073–4, inclusive, and §§1.6081–1 and 1.6081–2 of this chapter (Income Tax Regulations).
(b) Determination of estimated tax—(1) Allocation of tax attributable to foreign currency. In determining the amount of estimated tax for purposes of this section, all items of income, deduction, and credit, whether or not attributable to amounts received in nonconvertible foreign currency, shall be taken into account. The portion of the estimated tax which is attributable to amounts to be received during the taxable year in nonconvertible foreign currency shall be determined consistently with the manner prescribed by §301.6316–3.
(2) Example. (i) For the calendar year 1955 Mr. Jones and his wife filed a joint declaration of estimated tax in the determination of which the adjusted gross income was estimated to be as follows, after amounts to be received in foreign currency had been properly translated into U.S. dollars for tax computation purposes:
Fulbright grant to be received by Mr. Jones in nonconvertible $8,000 foreign currency..............................................Dividends to be received by Mr. Jones entitled to dividends- 875 received credit...............................................Compensation to be received by Mrs. Jones for personal services 3,000Net profit to be derived from business carried on by Mrs. Jones 1,625 -------- Total estimated adjusted gross income....................... 13,000
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(ii) The following amounts were determined to be allowable as properly deductible from estimated adjusted gross income, no determination being made as to whether or not any part of them was properly allocable to the Fulbright grant:
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Deduction for personal exemptions.............................. $3,000Charitable contributions....................................... 300Interest expense............................................... 400Taxes.......................................................... 300 -------- Total allowable deductions.................................. 4,000
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(iii) The following estimated amounts were determined to be allowable as credits against the tax for the taxable year:
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Foreign tax credit for foreign taxes to be paid on $300.00 Fulbright grant...........................................Credit for income tax expected to be withheld upon 304.80 compensation of Mrs. Jones................................Dividends-received credit.................................. 15.00 ------------ Total allowable estimated credits....................... 619.80
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(iv) The portion of the estimated tax which is attributable to amounts to be received during the taxable year in nonconvertible foreign currency is $893.88, determined as follows:
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Estimated adjusted gross income............................ $13,000.00Less: Allowable deductions................................. 4,000.00 ------------ Estimated taxable income................................ 9,000.00Tax computed under section 2............................... 1,940.00Ratio of estimated adjusted gross income to be received in 61.54 nonconvertible foreign currency to entire estimated adjusted gross income ($8,000÷$13,000) (percent).....Portion of above tax attributable to nonconvertible foreign 1,193.88 currency ($1,940x61.54 percent)...........................Less: Credit for foreign taxes expected to be paid on 300.00 Fulbright grant........................................... ------------ Portion of estimated tax which is attributable to 893.88 amounts to be received during the taxable year in nonconvertible foreign currency.........................
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(v) The portion of the estimated tax which is payable in U.S. dollars is $426.32, determined as follows:
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Tax computed under section 2............................... $1,940.00Less: Total allowable estimated credits.................... 619.80 ------------ Total estimated tax..................................... 1,320.20Less: Portion of estimated tax payable in foreign currency. 893.88 ------------ Portion of estimated tax payable in U.S. dollars........ 426.32
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(c) Payment of estimated tax. (1) The provisions of §301.6316–5 relating to the certified statement, determination of the tax, and the depositing of the foreign currency shall apply for purposes of this section. The full amount of estimated tax payable in foreign currency, as determined under paragraph (b) of this section, may be deposited before the date prescribed for the payment thereof.
(2) Every taxpayer making a deposit of foreign currency in accordance with this paragraph shall tender to the Director of International Operations, Internal Revenue Service, Washington, D.C. 20225, the original of the receipt from the disbursing officer as payment, to the extent of the amount represented thereby in U.S. dollars, of the estimated tax. For the dates prescribed for the payment of estimated tax, see sections 6153 and 6161 and §§1.6153–1 to 1.6153–4, inclusive, and §1.6161–1 of this chapter (Income Tax Regulations). A taxpayer should make the deposit required by this paragraph in ample time to permit him to tender such receipt by the date prescribed for payment of the estimated tax.
(d) Credit on return for the taxable year. The receipt given by the disbursing officer of the Department of State and tendered in payment of estimated tax under this section shall, for purposes of paragraph (a)(2) of §301.6316–3, be considered as payment on account of the tax for the taxable year. The amount so considered to be paid shall be the amount in U.S. dollars represented by the receipt.
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