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June 28, 2020
2020-1669

U.S. Tax This Week for June 26

Ernst & Young's U.S. Tax This Week newsletter for the week ending June 26 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

IRS updates Employee Retention Credit FAQs, affecting tax-exempt organizations

On June 19, 2020, the IRS updated 10 of its frequently asked questions (FAQs) on the Employee Retention Credit under the CARES Act. Three of the new FAQs pertain expressly to tax-exempt organizations: FAQ 34 (Example 4), FAQ 46 and FAQ 58 (Example 1). The IRS periodically updates their FAQs and uses the FAQs as a flexible tool to communicate important tax information. While these FAQs are not binding on the IRS or taxpayers, they do reveal the current thinking of the Treasury Department and the IRS. EY Tax Alert 2020-1668 has details.

Supreme Court declines to hear Altera case

On June 22, 2020, the Supreme Court announced that it was denying the petition for certiorari for Altera Corporation & Subsidiaries v. Commissioner, 926 F.3d. 1061 (2019). Altera filed the petition asking the Supreme Court to review a decision of the Ninth Circuit Court of Appeals upholding the 2003 version of Treas. Reg. Section 1.482-7 (2003 Regulations), which requires participants to include stock-based compensation costs in a cost-sharing arrangement. The denial to hear the case puts an end to the Altera's Ninth Circuit stock-based compensation challenge. EY Tax Alert 2020-1626 has details.

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Upcoming Webcasts

How can organizations prepare for the future of payroll? (July 9)
During this Thought Center Webcast, Ernst & Young professionals will discuss significant trends identified during EY’s fourth biennial payroll survey and analyze how these insights can help companies better prepare for the future of payroll.

How companies are addressing impairment considerations on goodwill and other long-lived assets (July 16)
During this Thought Center Webcast, Ernst & Young professionals will examine leading practices that companies are adopting to address challenges in developing forecasts, recovering curves, valuation approaches and reconciliations to market capitalization.

US corporate income tax compliance (July 21)
During this Thought Center Webcast, Ernst & Young professionals will discuss how your company can continue to navigate the complexity and challenges of the CARES Act and TCJA compliance, while preparing for tax year 2019 (TY19) and tax year 2020 (TY20).

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

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Recent Tax Alerts

Courts

— Jun 22: Supreme Court declines to hear Altera case (Tax Alert 2020-1626)

Internal Revenue Service

— Jun 25: IRS updates Employee Retention Credit FAQs, affecting tax-exempt organizations (Tax Alert 2020-1668)

— Jun 24: IRS issues final regulations under IRC Section 199A on treatment of previously suspended losses and determining deductions for RICs and certain trusts (Tax Alert 2020-1648)

— Jun 19: IRS issues proposed regulations on eliminating deduction for qualified transportation fringe benefit expenses (Tax Alert 2020-1622)

— Jun 19: IRS provides guidance on reporting coronavirus-related distributions from eligible retirement plans (Tax Alert 2020-1618)

— Jun 19: EY survey results show how third-party payroll providers are dealing with the COVID-19 employee retention credit (Tax Alert 2020-1614)

International

— Jun 25: Zambia announces termination of double taxation agreement with Mauritius (Tax Alert 2020-1667)

— Jun 25: South Africa's Minister of Finance delivers 2020 Supplementary Budget review (Tax Alert 2020-1666)

— Jun 25: EU reaches agreement on postponement of VAT e-commerce rules due to COVID-19 crisis (Tax Alert 2020-1665)

— Jun 25: China announces masterplan for Hainan Free Trade Port (Tax Alert 2020-1664)

— Jun 25: Trinidad and Tobago issues Mid-Year Budget Review 2020 (Tax Alert 2020-1663)

— Jun 25: Council of the EU adopts amendments for deferral of MDR filing deadlines (Tax Alert 2020-1661)

— Jun 24: UK Tax Authority publishes update on current delays in processing and refunding VAT under Overseas Refund Scheme (Tax Alert 2020-1655)

— Jun 24: Poland defers certain provisions of new withholding tax reform to 1 January 2021 (Tax Alert 2020-1654)

— Jun 24: Greece implements electronic accounting books and e-invoicing process (Tax Alert 2020-1653)

— Jun 24: Belgium reduces VAT rates for restaurant services (Tax Alert 2020-1652)

— Jun 24: Trade Watch | Issue 2 2020 (Tax Alert 2020-1651)

— Jun 23: Australian Taxation Office publishes guidance on COVID-19 economic impacts on transfer pricing arrangements and altering related party arrangement (Tax Alert 2020-1646)

— Jun 23: Cyprus adopts legislation implementing exit taxation and hybrid mismatch rules (Tax Alert 2020-1642)

— Jun 23: Bulgaria reduces VAT rates for certain sectors (Tax Alert 2020-1641)

— Jun 22: New Zealand introduces new omnibus tax Bill (Tax Alert 2020-1633)

— Jun 22: Thai Cabinet approves VAT bill regarding taxation of foreign e-business (digital services) (Tax Alert 2020-1632)

— Jun 22: Colombia updates regulations on tax incentives for investments in renewable energy sources (Tax Alert 2020-1631)

— Jun 22: Uruguayan Executive Power issues decree establishing tax incentives to encourage investments (Tax Alert 2020-1630)

— Jun 22: Kenya introduces VAT regulations on supply of digital services (Tax Alert 2020-1628)

— Jun 22: Uruguay's Executive Power adds new conditions under which individuals may obtain tax residence (Tax Alert 2020-1627)

— Jun 19: Tanzania's Parliament passes Finance Bill, 2020 (Tax Alert 2020-1617)

— Jun 19: Uruguay's Executive Power extends tax incentives for construction activities (Tax Alert 2020-1613)

— Jun 19: Costa Rica's tax authorities published guidance on charging and collecting of VAT on cross-border digital services and intangible assets (Tax Alert 2020-1612)

Legislation

— Jun 25: What to expect in Washington (June 25) (Tax Alert 2020-1662)

— Jun 24: House Energy & Commerce questions top officials on Administration's pandemic response (Tax Alert 2020-1650)

— Jun 23: US Supreme Court rules federal government's move to rescind DACA Program unlawful (Tax Alert 2020-1645)

— Jun 23: President Trump signs Presidential Proclamation suspending entry of aliens presenting risk to US labor market (Tax Alert 2020-1644)

— Jun 19: Senators Thune, Brown update mobile workforce bill for COVID-19 (Tax Alert 2020-1616)

States

— Jun 24: No filing extensions will be granted for New Jersey deferred tax deduction form due July 1, 2020 (Tax Alert 2020-1657)

— Jun 24: New Mexico tax department announces self-serve payment plan option for taxpayers with outstanding debts due to COVID-19 (Tax Alert 2020-1656)

— Jun 23: Louisiana second-quarter 2020 SUI tax return deadline extended for COVID-19 (Tax Alert 2020-1639)

— Jun 19: Colorado bill to require employers provide paid sick leave for reasons other than COVID-19 (Tax Alert 2020-1621)

— Jun 19: Senate introduces modified Mobile Worker Relief bill to protect workers temporarily working in states due to COVID-19 (Tax Alert 2020-1619)

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Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

— Internet Tax Freedom Act's prohibition against taxing Internet access applies to all states beginning July 1, 2020. On June 30, 2020, the grandfathering provisions of the Internet Tax Freedom Act (ITFA), which permitted states that taxed Internet access before the ITFA's enactment to continue doing so, will expire.

— Income/Franchise, Sales & Use, Business Incentives, Property Tax, Controversy, Payroll & Employment Tax, Miscellaneous Tax, Unclaimed Property, Global Trade, Value Added Tax, Upcoming Webcasts

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IRS Weekly Wrap-Up

Final Regulations

 TD 9899Qualified Business Income Deduction

Proposed Regulations

 REG-119307-19Qualified Transportation Fringe, Transportation and Commuting Expenses under Section 274

Notices

 2020-51Guidance on Waiver of 2020 Required Minimum Distributions

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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