Sponsors (2)
The bill strengthens U.S. sanctions policy by denying tax benefits for Russian-government taxes and streamlining enforcement, but it raises U.S. tax burdens for firms with Russian ties and risks treaty friction and economic spillovers to consumers.
U.S. taxpayers and the American public: Stops U.S. tax benefits that effectively subsidize Russian-government taxes, aligning tax treatment with sanctions and reducing indirect support for Russia.
Taxpayers and financial institutions: Makes enforcement immediate and simpler by directing Treasury/IRS to apply the rule on enactment and without regard to treaties, reducing administrative delay and compliance ambiguity.
U.S. businesses with Russian operations: Loses foreign tax credits for taxes paid to Russia, increasing U.S. tax liabilities for affected companies and reducing post-tax profits.
Taxpayers and consumers: Creates a risk of double taxation or higher effective tax rates for amounts paid or deemed paid to Russia during the covered period, which could raise costs for firms and lead to higher prices for consumers or lower wages.
Multinational taxpayers and the U.S. Government: Requiring application 'without regard to any U.S. treaty' could provoke reciprocal actions, legal challenges, and increased uncertainty for cross-border tax arrangements.
Based on analysis of 2 sections of legislative text.
Denies the foreign tax credit for taxes paid to the Russian Federation for a specified period, excludes those taxes from a deduction limit, and overrides treaty protections.
Denies U.S. taxpayers the foreign tax credit for taxes paid to the Russian Federation for a defined period tied to U.S. trade-suspension policy, and excludes those Russian taxes from a deduction-limitation rule. The denial period begins 30 days after enactment and ends when U.S. normal-duty rates for Russian products are resumed; the rule overriding treaty claims and most changes take effect on enactment, while the denial of deductions phases in for taxes paid or accrued more than 90 days after enactment.
Official title: Amend the Internal Revenue Code of 1986 to deny any foreign tax credit or deduction with respect to taxes paid or accrued to the Russian Federation.
Introduced January 30, 2025 by Catherine Marie Cortez Masto · Last progress March 16, 2026