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June 21, 2020
2020-1606

U.S. Tax This Week for June 19

Ernst & Young's U.S. Tax This Week newsletter for the week ending June 19 is now available. Prepared by Ernst & Young's National Tax Department in Washington, D.C., this weekly update summarizes important news, cases, and other developments in U.S. taxation.

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Top of the Week

BEPS 2.0 news discussed at Ways & Means trade hearing

The House Ways and Means Committee held a hearing June 17 with U.S. Trade Representative (USTR) Robert Lighthizer during which he confirmed press reports that the United States suspended its involvement in the OECD negotiations to develop a new regime for taxing local profits of global companies under so-called Pillar 1 of the BEPS 2.0 project. According to a Financial Times report, Treasury Secretary Steven Mnuchin told counterparts from other nations in a letter that the talks had reached an impasse that prevented US agreement on even any interim implementation of Pillar 1 and the creation of new taxing right for countries that would augment the arms-length transfer pricing rules with a formulary approach to allocate profits into market jurisdictions. He reportedly said nations were "much closer to an agreement" on the Pillar 2 minimum tax element of the plan than Pillar 1. EY Tax Alert 2020-1589 has details. 

EY's state guide to COVID-19 payroll and employment tax provisions is updated through June 8, 2020

Our EY state guide to COVID-19, originally published on May 7, 2020, has been updated through June 8, 2020. Sections updated are show in asterisks in the Table of Contents. To contain the outbreak of COVID-19 in the US, numerous states and local governments temporarily closed nonessential businesses and issued "stay-at-home" orders, creating a historic disruption to the US workforce. Most states and localities responded to the emergency by expanding their paid leave mandates; waiving certain reporting requirements; expanding unemployment insurance benefits; providing extensions on the due date of payroll tax returns, tax payments or both; and/or temporarily halting certain garnishment orders. EY Tax Alert 2020-1567 has details.

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EY Guides and Publications

EY's state guide to COVID-19 payroll and employment tax provisions is updated through June 8, 2020
To contain the outbreak of COVID-19 in the US, numerous states and local governments temporarily closed nonessential businesses and issued "stay-at-home" orders, creating a historic disruption to the US workforce. Most states and localities responded to the emergency by expanding their paid leave mandates; waiving certain reporting requirements; expanding unemployment insurance benefits; providing extensions on the due date of payroll tax returns, tax payments or both; and/or temporarily halting certain garnishment orders.

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Upcoming Webcasts

15th Annual International Quantitative and Reporting Conference: Amended returns and preparing for IRS audits (June 22)
During this fourth installment in our 15th Annual International Quantitative and Reporting Conference webcast series, Ernst & Young professionals will address the most significant tax controversy matters affecting today’s tax departments, including Section 965 transition tax audit issues, IRS international tax exam focuses and matters relating to Section 905(c).

Accounting for income taxes (June 23)
During this Thought Center Webcast, Ernst & Young professionals will discuss ongoing issues and regulatory trends in the tax accounting arena. Topics will include recent tax legislation with tax accounting implications and a review of current income tax accounting concepts.

Tax in the time of COVID-19 | Preparing for potential future tax changes (June 26)
During this EY Webcast, Ernst & Young professionals will provide updates on (i) The legislative and economic landscape – what’s happening now and what may be around the corner, (ii) What’s on the horizon for the Tax Cuts and Jobs Act, (iii) How companies should prepare for potential future tax changes and (iv) IRS and breaking developments.

Teleworker tax implications for COVID-19 and beyond (July 28)
During this EY Webcast, Ernst & Young professionals will help you identify the tax implications of telework arrangements.

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Recent Tax Alerts

Internal Revenue Service

— Jun 16: IRS extends new market tax credits deadlines until end of 2020 (Tax Alert 2020-1580)

— Jun 16: IRS issues guidance on leave-based donation programs in response to COVID-19 pandemic (Tax Alert 2020-1574)

— Jun 16: Proposed IRC Section 1031 regulations define "real property" for purposes of like-kind exchange rules (Tax Alert 2020-1573)

— Jun 12: IRS postpones due dates for certain New Markets Tax Credit investments and expenditures (Tax Alert 2020-1555)

International

— Jun 18: UK announces new measures to support customs intermediaries and controls for importing goods will now apply from July 2021 (Tax Alert 2020-1600)

— Jun 18: Prince Edward Island budget 2020-21 discussed (Tax Alert 2020-1595)

— Jun 17: Philippines enhances proposal for corporate tax reform to promote investment (Tax Alert 2020-1593)

— Jun 17: Philippines proposes law for taxation of the digital economy (Tax Alert 2020-1592)

— Jun 17: Spanish Supreme Court rules on limits to dynamic interpretation of tax treaties (Tax Alert 2020-1591)

— Jun 17: CJEU rules price adjustments require VAT deduction adjustments (Tax Alert 2020-1590)

— Jun 17: Saskatchewan budget 2020-21 discussed (Tax Alert 2020-1584)

— Jun 16: Saudi Arabia issues taxpayer guidance for MAP (Tax Alert 2020-1581)

— Jun 16: Norway's Parliamentary Finance Committee addresses uncertainty resulting from Ministry of Finance statement regarding application of GAAR (Tax Alert 2020-1575)

— Jun 16: The latest on BEPS and Beyond for June 2020 (Tax Alert 2020-1572)

— Jun 15: Algeria enacts 2020 Complementary Finance Act including foreign direct investment incentives (Tax Alert 2020-1566)

— Jun 15: Turkey's Central Bank now requires certain companies to submit weekly report of foreign exchange position (Tax Alert 2020-1565)

— Jun 15: Ghana Revenue Authority issues Practice Notes on various tax issues (Tax Alert 2020-1564)

— Jun 12: Italy enacts EU Tax Dispute Resolution Mechanisms (Tax Alert 2020-1558)

Legislation

— Jun 18: Ways & Means subpanel holds hearing on COVID-19 tax relief (Tax Alert 2020-1603)

— Jun 18: House Democrats unveil infrastructure proposal without pay-fors (Tax Alert 2020-1602)

— Jun 18: House Financial Services Committee questions Federal Reserve Chairman Powell on economy, other issues (Tax Alert 2020-1599)

— Jun 17: Senate Banking Committee questions Federal Reserve Chair Powell (Tax Alert 2020-1587)

— Jun 18: Tax and trade discussed by USTR Lighthizer at Finance hearing (Tax Alert 2020-1598)

— Jun 18: What to expect in Washington | Coronavirus response (June 18) (Tax Alert 2020-1596)

— Jun 17: BEPS 2.0 news discussed at Ways & Means trade hearing (Tax Alert 2020-1589)

— Jun 16: Federal Reserve seeks comment on proposed nonprofit loan facility; secondary market credit program will buy corporate debt (Tax Alert 2020-1570)

— Jun 15: Proposed regulations on executive compensation for tax-exempt organizations clarify many questions, including treatment of volunteers (Tax Alert 2020-1559)

States

— Jun 18: Puerto Rico enacts additional COVID-19 stimulus measures with implications for tax years 2019 and 2020 (Tax Alert 2020-1601)

— Jun 17: Seattle, Washington ordinance extends paid sick leave and safe time to gig workers affected by COVID-19 (Tax Alert 2020-1586)

— Jun 16: Missouri announces resumption of charging COVID-19 UI benefits to employers, as well as work-search requirements and waiting period (Tax Alert 2020-1579)

— Jun 16: New York adopts sick leave law that expands on its COVID-19 paid leave requirements (Tax Alert 2020-1578)

— Jun 16: Vermont issues income tax withholding guidance for employees working in the state temporarily due to COVID-19 (Tax Alert 2020-1577)

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Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

— Qualified Opportunity Zone funds and investors get more relief from deadlines In Notice 2020-39, the IRS granted deadline relief for qualified Opportunity Zone (OZ) investors and Qualified Opportunity Funds (QOFs) in response to the COVID-19 pandemic.

— Income/Franchise, Sales & Use, Business Incentives, Property Tax, Controversy, Payroll & Employment Tax, Miscellaneous Tax, Value Added Tax

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IRS Weekly Wrap-Up

Proposed Regulations

 REG–117589–18Statutory Limitations on Like-Kind Exchanges

Revenue Procedures

 2020-1626 CFR 601.105: Examination of returns and claims for refund, credit, or abatement; determination of correct tax liability

Notices

 2020-49IRS extends new market tax credits deadlines until end of 2020
 2020-50Guidance for Coronavirus-Related Distributions and Loans from Retirement Plans Under the CARES Act

Internal Revenue Bulletin

 2020-26Internal Revenue Bulletin of June 22, 2020

Because the matters covered herein are complicated, U.S. Tax This Week should not be regarded as offering a complete explanation and should not be used for making decisions. Any decision concerning matters covered herein should be reviewed with a qualified tax advisor.

 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

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