INTERNAL REVENUE SERVICE

SHELDON S. COHEN Commissioner

WILLIAM H. SMITH Deputy Commissioner

ALBERT W. BRISBIN Assistant Commissioner (Planning and Research)

This report was prepared under the direction of Norman Adler, Supervisory Statistician in the Income, Finance, and Wealth Branch, assisted by Joseph A. Schifrin and other members of the staff.

Other branches of the Statistics Division assisted in development of the sample design and the computer systems design, the preparation of processing procedures, and the post-tabulation review of the data. Statistical and computer processing of the data were conducted by the service centers at Ogden, Utah; Kansas City, Missouri; Lawrence, Massachusetts; and Chamblee, Georgia.

For sale by the Superintendent of Documents, U.S. Government Printing Office

CANITED STATER OF AMERICA

I am transmitting Statistics of Income--1961, Supplemental Report on Foreign Tax Credit Claimed on Corporation Income Tax Returns. This report also includes data on the Western Hemisphere trade corporation deduction. It is submitted in partial fulfillment of the requirements of section 6108 of the Internal Revenue Code of 1954, which provides that statistics be published with respect to the operation of the income tax laws.

The statistics in this report were obtained from the returns and schedules filed by corporations for accounting periods ended July 1961 through June 1962. The report contains summary information for the 4,427 returns on which corporation taxpayers claimed a foreign tax credit for income year 1961 as well as the more detailed statistics for the 3,821 returns for which supporting statements, Form 1118, were also filed. It contains information on the foreign taxable income, foreign taxes paid, and foreign tax credit claimed by United States corporations. Statistics are furnished for the geographic areas and countries in which foreign income was earned and to which taxes were paid. Classifications of the statistics show the industries and various size measures of the corporations claiming the foreign tax credit as well as the limitation method under which the credit was computed.

This report also includes summary information for the 608 Western Hemisphere trade corporation returns, and foreign tax credit data for those Western Hemisphere trade corporations that claimed a foreign tax credit. The Western Hemisphere trade corporation deduction data were obtained from the taxpayer's Form 1120, schedule I. The statistics are also classified to show the industries and various size measures of the firms taking the deduction.

Since the data were obtained from returns submitted for 1961, they do not reflect the extensive changes pertaining to the taxation of foreign income in the Revenue Act of 1962.

Sheldon Sloten

Commissioner of Internal Revenue.

Hon. Henry F. Fowler,

Secretary of the Treasury.