A bill to amend the Internal Revenue Code of 1986 with respect to the creditability of taxes paid to the Republic of Panama.

Amends the Internal Revenue Code to disallow both an income tax deduction and application of the foreign tax credit in connection with taxes paid or accrued after March 24, 1988, to the Republic of Panama, except for taxes paid to the government recognized as legitimate by the United States.

Terminates these limitations when the Secretary of State certifies to the Congress that progress toward restoration of constitutional government in Panama has been made.