The U.S. IRS recently released an Office of Chief Counsel memorandum explaining that a controlled foreign corporation (CFC) is not entitled to a dividends received deduction under section 245A. Section 245A allows an exemption for certain foreign income of a domestic corporation that is a U.S. Shareholder by means of a 100% dividends received deduction for the foreign source portion of dividends received from "Specified 10-percent owned Foreign Corporations".
The facts and conclusion are su…