This revenue ruling obsoletes Rev. Rul. 74-245, 1974-1 C.B. 124, and Rev. Rul. 82-45, 1982-1 C.B. 89, which provide guidance regarding income subject to foreign legal restrictions (also known as blocked income). Rev. Ruls. 74-245 and 82-45 are not considered determinative with respect to future transactions. Guidance regarding income subject to foreign legal restrictions for purposes of section 482 is provided in § 1.482-1(h)(2) of the Income Tax Regulations (T.D. 8552, 1994-2 C.B. 93, 125). Therefore, Rev. Rul. 74-351, 1974-2 C.B. 144, does not provide guidance regarding income subject to foreign legal restrictions for purposes of section 482, but may provide guidance regarding income subject to foreign legal restrictions for other purposes.

The principal author of this revenue ruling is Keith V. Doce of the Office of Associate Chief Counsel (International). For further information regarding this revenue ruling, contact Mr. Doce at (202) 435-5265 (not a toll-free call).