The U.S. Internal Revenue Service (IRS) proposed rules (PDF) for the allocation and apportionment of expenses for purposes of determining the limitation on the foreign tax credit to reflect changes to the law made by the Tax Cuts and Jobs Act (TCJA). The Sec. 901 foreign tax credit allows U.S. taxpayers to offset their taxes by the amount of foreign income taxes paid or accrued. The IRS noted that the TCJA made a number of changes to the tax law that affected the Sec. 904 limitation on the foreign tax credit, not the least of which was the reduction in the corporate tax rate to 21 percent, which made it more likely that corporate taxpayers would be subject to the limitation on the foreign tax credit. The TCJA also added a dividends-received deduction for domestic corporate shareholders equal to the foreign-source portion of dividends received from certain foreign corporations under Sec. 245A (subject to limitations in Sec. 246).