Yes, the IRS is proposing to disallow the amount claimed on Line 74 of Form 1040 as IRC 1341 Claim of Right Credit. I think you are right, it should flow through nonrefundable credit, schedule 3, but I'm not sure which line of schedule 3... I don't think the deemed paid tax credit is the normal foreign tax credit... I don't know where I could enter that number in schedule 3...