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December 6, 2020
2020-2800

U.S. Tax This Week for December 4

Ernst & Young's U.S. Tax This Week newsletter for the week ending December 4 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

Final regulations on unrelated trades or businesses affect tax-exempt organizations, as well as asset managers with exempt organizations as investors

In final regulations (TD 9933), the IRS provides guidance on how an exempt organization determines if it has more than one unrelated trade or business and, if it has more than one, how to calculate unrelated business taxable income (UBTI). The regulations are relevant not only to tax-exempt organizations, but also to private equity and alternative asset management funds with tax-exempt investors, as the regulations may impact funds' Schedules K-1 and tax compliance disclosures and structuring of the funds' investments. EY Tax Alert 2020-2799 has details.

OECD releases 2020 update on peer review of preferential tax regimes and no or only nominal tax jurisdictions

The Organisation for Economic Co-operation and Development (OECD) released an update on November 23 regarding the results of the peer reviews of jurisdictions' domestic laws under Action 5 (harmful tax practices) of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project. The results were approved on 16 November 2020 by the Inclusive Framework on BEPS. EY Tax Alert 2020-2781 has details.

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Upcoming Webcasts

Year-end tax planning and other hot topics for alternative asset managers in a post-pandemic world (December 7)
During this Thought Center Webcast, Ernst & Young professionals will discuss year-end tax planning and what the latest US election results mean for wealth and asset managers.

Insights and outlook: Tax and investment implications of the election and pandemic for business owners (part two) (December 8)
During this Thought Center Webcast, Ernst & Young professionals will discuss the investment and tax implications of the US election and global pandemic for business owners and individuals.

Year-end update: Latest developments related to the ACA and employer credits including the WOTC (December 8)
During this Thought Center Webcast, Ernst & Young professionals will give a year-end update on the ACA and employer credits including the WOTC. They will also cover the potential impacts of the recent presidential election and the judicial and legislative landscape on these issues as well as discuss how your business can continue to effectively comply with the reporting requirements of the ACA and potentially benefit from the WOTC and other credits during this unprecedented time.

Cross-border withholding tax considerations and how to plan for 2021 (December 9)
During this Thought Center Webcast, Ernst & Young professionals will discuss the impact of the global pandemic on cross-border withholding tax, expected changes for 2021 and how to build operational tax resiliency.

Domestic tax quarterly webcast series: A focus on state tax matters (December 9)
For our fourth quarterly webcast in 2020, panelists from the Indirect Tax practice of Ernst & Young LLP will focus on state and local tax policy issues related to the 2020 general election and continued state responses to the coronavirus (COVID-19) pandemic. We will also highlight the most important developments affecting state income, sales and use, and property taxes as well as federal and state business credits and incentives.

Banking and capital markets: Tax year-end review and 2021 outlook (December 11)
During this Thought Center Webcast, Ernst & Young professionals will discuss the impact of the US 2020 Presidential election on the banking and capital markets industry.

International tax: The 2020 year in review (December 11)
During this Thought Center Webcast, Ernst & Young thought leaders will review selected 2020 US international tax developments and discuss potential changes to US and global tax policy.

Accounting for income taxes: A quarterly perspective (December 15)
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.

2020 Forms 1099 and 1042-S: What filers need to know to properly file their 2020 information returns (December 16)
During this Thought Center Webcast, Ernst & Young professionals will discuss how to manage filing information returns for 2020.

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Recent Tax Alerts

Internal Revenue Service

— Dec 03: Final regulations on unrelated trades or businesses affect tax-exempt organizations, as well as asset managers with exempt organizations as investors (Tax Alert 2020-2799)

— Dec 02: Dedicated solar energy facility is not public utility property, IRS rules (Tax Alert 2020-2780)

— Nov 23: IRS issues final like-kind exchange regulations reflecting TCJA changes (Tax Alert 2020-2760)

International

— Dec 03: Egypt updates its customs laws (Tax Alert 2020-2798)

— Dec 03: Luxembourg Tax Authorities clarify application of EU Parent-Subsidiary Directive with respect to Gibraltar companies (Tax Alert 2020-2797)

— Dec 03: OECD holds second Tax Certainty Day (Tax Alert 2020-2796)

— Dec 03: Denmark enacts new rules on international taxation (Tax Alert 2020-2795)

— Dec 03: Canada announces specified GST/HST regime for e-commerce supplies (Tax Alert 2020-2793)

— Dec 02: Spain releases draft Bill implementing ATAD 2 for public consultation (Tax Alert 2020-2790)

— Dec 02: France publishes final guidance on Mandatory Disclosure Rules (Tax Alert 2020-2789)

— Dec 02: Belgium implements EU plastics tax measures (Tax Alert 2020-2788)

— Dec 02: Chile deposits Multilateral Convention to Implement Tax Treaty Related Measures to prevent BEPS (Tax Alert 2020-2786)

— Dec 02: Income tax measures from Canada's 2020 federal Fall Economic Statement discussed (Tax Alert 2020-2783)

— Dec 02: Italy issues new transfer pricing documentation requirements and proposes changes to APA procedure (Tax Alert 2020-2782)

— Dec 02: OECD releases 2020 update on peer review of preferential tax regimes and no or only nominal tax jurisdictions (Tax Alert 2020-2781)

— Dec 01: Poland implements significant changes to corporate income tax law – final bill published in Journal of Laws (Tax Alert 2020-2779)

— Dec 01: Kenyan Tax Appeals Tribunal holds claim of input VAT must be supported by evidence of an underlying transaction (Tax Alert 2020-2778)

— Dec 01: Austria to enact new interest limitation rule in accordance with EU ATAD as of 2021 (Tax Alert 2020-2777)

— Dec 01: New Zealand introduces new tax guidance for cryptoassets (Tax Alert 2020-2776)

— Dec 01: Belarus joins BEPS Inclusive Framework and Global Forum on Transparency and Exchange of Information for Tax Purposes (Tax Alert 2020-2775)

— Dec 01: Mexico's tax administration publishes regulations on reporting under mandatory disclosure rules (Tax Alert 2020-2774)

— Dec 01: Canada's Federal Fall Economic Statement 2020 discussed (Tax Alert 2020-2772)

— Nov 30: UK to implement domestic reverse charge on construction services as of 1 March 2021 (Tax Alert 2020-2770)

— Nov 30: Insights provided from Hong Kong's 2020 Annual Meeting between Inland Revenue Department and Institute of Certified Public Accountants (Tax Alert 2020-2768)

— Nov 30: The economic employer concept is coming to Sweden (Tax Alert 2020-2767)

— Nov 24: OECD releases 2019 mutual agreement procedure statistics and 2019 mutual agreement procedure awards (Tax Alert 2020-2764)

— Nov 24: Italian Government proposes changes to tax on plastic items (Tax Alert 2020-2763)

— Nov 23: OECD releases Consultation Document on 2020 review of BEPS Action 14 (Tax Alert 2020-2761)

— Nov 23: Taiwan ceases use of Computer Uniform Invoices from 1 January 2021 (Tax Alert 2020-2757)

— Nov 23: Turkey enacts law on restructuring certain receivables and amends certain tax laws (Tax Alert 2020-2756)

— Nov 23: Gibraltar's Mandatory Disclosure Regime discussed (Tax Alert 2020-2755)

Legislation

— Dec 04: What to expect in Washington (December 4) (Tax Alert 2020-2806)

States

— Dec 03: Vermont updates guidance on income tax for teleworkers and employees relocated in connection with COVID-19 (Tax Alert 2020-2794)

— Dec 02: North Dakota employers were erroneously assessed interest on timely filed third quarter 2020 SUI returns and payments (Tax Alert 2020-2785)

— Dec 01: Arizona voters approve ballot measure to impose an additional income tax surcharge for high-income individuals (Tax Alert 2020-2773)

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Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

— IRS plans to issue proposed regulations on deductibility of certain state and local tax payments by partnerships and S corporations. The IRS has announced (Notice 2020-75) (Notice) that it will issue proposed regulations (Proposed Regulations) clarifying that a partnership or S corporation may deduct "Specified Income Tax Payments" in computing their non-separately stated income or loss.

— Income/Franchise, Sales & Use, Business Incentives, Compliance & Reporting, Controversy, Payroll & Employment Tax, Global Trade, Upcoming Webcasts

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IRS Weekly Wrap-Up

Final Regulations

 TD 9926Withholding of Tax and Information Reporting With Respect to Interests in Partnerships Engaged in a U.S. Trade or Business
 TD 9934Coordination of Extraordinary Disposition and Disqualified Basis Rules
 TD 9912Guidance Clarifying Premium Tax Credit Unaffected by Suspension of Personal Exemption Deduction
 TD 9935Statutory Limitations on Like-Kind Exchanges
 TD 9933Unrelated Business Taxable Income Separately Computed for Each Trade or Business

Proposed Regulations

 REG-123652-18Treatment of Special Enforcement Matters

Revenue Procedures

 2020-50Additional first year depreciation deduction for property acquired and placed in service after September 27, 2017

Revenue Rulings

 2020-28Section 6621.—Determination of Rate of Interest

Notices

 2020-84Adjusted Applicable Dollar Amount for Fee Imposed by §§ 4375 and 4376

Internal Revenue Bulletin

 2020-48Internal Revenue Bulletin of November 23, 2020
 2020-49Internal Revenue Bulletin of November 30, 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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