DENIAL OF FOREIGN TAX CREDIT.

SEC. 1061. DENIAL OF FOREIGN TAX CREDIT. (a) In General.— Subpart A of part III of subchapter N (relating to income from sources without the United States) is amended by adding at the end thereof the following new section: “SEC. 908. REDUCTION OF CREDIT FOR PARTICIPATION IN OR COOPERATION WITH AN INTERNATIONAL BOYCOTT. “(a) In General.— If a person, or a member of a controlled group (within the meaning of section 993(a)(3)) which includes such person, participates in or cooperates with an international boycott during the taxable, year (within the meaning of section 999(b)), the amount of the credit allowable under section 991 to such person, or under section 902 or 960 to United States shareholders of such person, for foreign taxes paid during the taxable year shall be reduced by an amount equal to the product of— “(1) the amount of the credit which, but for this section, would be allowed under section 901 for the taxable year, multiplied by “(2) the international boycott factor (determined under section 999). “(b) Application With Sections 275(a)(4) and 78.— Section 275 (a)(4) and section 78 shall not apply to any amount of taxes denied credit under subsection (a).” 90 STAT. 1650 (b) Clerical Amendment.— The table of sections for such subpart is amended by adding at the end thereof the following new item: “Sec. 908. Reduction of credit for participation in or cooperation with an international boycott.”