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August 30, 2020

U.S. Tax This Week for August 28

Ernst & Young's U.S. Tax This Week newsletter for the week ending August 28 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.

Top of the Week

EY's state guide to COVID-19 payroll and employment tax provisions is updated through August 15, 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. EY Tax Alert 2020-2129 has details.

Revised Form 941-X expected in late September, here's what to do now

In its August 25, 2020, News for Payroll Professionals, the IRS announced that the revised Form 941-X to allow corrections for new lines added to the Form 941 effective in the second quarter 2020 is expected in late September. EY Tax Alert 2020-2131 has details.

Upcoming Webcasts

Succeeding through disruption with data-driven agility: State and local tax insights from EY & Thomson Reuters (September 1)
During this Thought Center Webcast, Ernst & Young professionals will share how you can enable an end-to-end connected tax approach, leveraging the ONESOURCE suite and intelligent tax automation with Alteryx. We will incorporate real-world insights from companies that are revising their processes and leveraging automation to support remote operations. The webcast will highlight insights and technology focused on state and local tax amidst the Coronavirus Aid, Relief, and Economic Security (CARES) Act and Tax Cuts and Jobs Act (TCJA).

Domestic tax quarterly webcast series | A focus on state tax matters (September 2)
During this Thought Center Webcast, Ernst & Young professionals will focus on state and local tax issues related to the state tax authority responses to the COVID-19 emergency, the ensuing state fiscal impact created by government mandates to close businesses and the possible impact on state taxes of upcoming federal, state and local elections.

The evolving world of site selection | Corporate location in today’s rapidly changing environment (September 9)
During this Thought Center Webcast, Ernst & Young professionals will explore current trends in site selection domestically and abroad, how these trends are expected to change, and issues economic developers should consider..

Recent Tax Alerts

Internal Revenue Service

— Aug 27: LB&I announces that it is accepting new applicants for 2021 CAP program (Tax Alert 2020-2132)

— Aug 26: IRS considering "obsoleting" Revenue Procedure 94-69, requests comments (Tax Alert 2020-2130)

— Aug 24: IRS provides staff with guidance on procedures for designating issues for litigation (Tax Alert 2020-2124)

— Aug 21: IRS proposed regulations update simplified tax accounting rules for small businesses to reflect TCJA favorable changes (Tax Alert 2020-2114)


— Aug 26: UK issues Brexit guidance on moving goods under the Northern Ireland Protocol (Tax Alert 2020-2128)

— Aug 26: Colombia issues regulations on indirect transfer regime (Tax Alert 2020-2127)

— Aug 24: India introduces Transparent Taxation platform (Tax Alert 2020-2122)

— Aug 21: Ecuador issues regulations implementing 2019 tax reform (Tax Alert 2020-2115)


— Aug 27: South Carolina extends nexus and income tax withholding relief for employees working temporarily in the state due to COVID-19 through December 31, 2020 (Tax Alert 2020-2133)

— Aug 26: Revised Form 941-X expected in late September, here's what to do now (Tax Alert 2020-2131)

— Aug 25: Iowa employers are required to provide notice of availability of UI benefits to separated employees and the UI agency (Tax Alert 2020-2126)

— Aug 24: California court holds assessor may not include certain capitalized costs in personal property tax assessments (Tax Alert 2020-2123)

— Aug 21: Minnesota Supreme Court holds that income from sale of partial interest in unitary business member is apportionable business income (Tax Alert 2020-2118)

— Aug 21: San Francisco Board of Supervisors advance real property transfer tax increase to November 3, 2020 ballot (Tax Alert 2020-2117)

— Aug 21: House bill proposed to provide state income tax relief to teleworkers during COVID-19 (Tax Alert 2020-2113)

— Aug 21: San Francisco ordinance requires employers of 100 or more to rehire eligible laid-off employees before other nonemployees (Tax Alert 2020-2112)

Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

Final regulations under IRC §163(j) related to the business interest expense limitations have state tax implications On July 28, 2020, the US Treasury Department released final regulations (TD 9905) with guidance on applying the limitations on the deductibility of business interest expense (BIE) under IRC Section 163(j) (the Final Regulations), which was significantly modified by the Tax Cuts and Jobs Act (P.L. 115-97) (TCJA) and then temporarily modified by the Coronavirus Aid, Relief, and Economic Security Act (P.L. 116-136) (CARES Act).

Minnesota Supreme Court holds that income from sale of partial interest in unitary business member is apportionable business income. In YAM Special Holdings, Inc., the Minnesota Supreme Court held that the imposition of corporate income tax on an apportioned share of income from the sale of a partial interest in a member of a unitary business does not violate the Due Process Clauses of either the US or Minnesota Constitutions because the income is business income of a unitary business that had a sufficient connection to Minnesota.

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

IRS Weekly Wrap-Up

Final Regulations

 TD 9909Limitation on Deduction for Dividends Received From Certain Foreign Corporations and Amounts Eligible for Section 954 Look-Through Exception
 TD 9900Carryback of Consolidated Net Operating Losses; Correcting Amendment

Proposed Regulations

 REG-124737-19Coordination of Extraordinary Disposition and Disqualified Basis Rules

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.