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December 13, 2020

Americas Tax Policy: This Week in Tax Policy News for December 11

This Week (December 14 - 18)

Congress: The House and Senate are in session, likely facing a December 18 deadline for an omnibus appropriations bill that could carry additional coronavirus spending and some tax provisions.

Last Week (December 7 - 11)

Year-end legislation: There isn’t yet agreement among members of Congress and with the President on additional coronavirus spending – which could possibly carry other items including tax provisions – and there is no imminent deadline, not even the next planned expiration of government funding on December 18. “[W]e’ve been here after Christmas, you know,” House Speaker Nancy Pelosi (D-CA) said December 10, adding that the December 26 expiration of UI benefits would be the next key date if a deal isn’t reached sooner. The bipartisan Senate group that has been filling out details of the $908 billion plan first outlined December 1 settled on an approach to the Democratic priority of state and local government funding but hasn’t found a middle ground on liability protections advocated by Republicans. Majority Leader Mitch McConnell (R-KY) has signaled that he doesn’t see a path for agreement on the two issues and suggested they be dropped from the current discussions and that Congress process a bill only on areas of agreement. “What’s the way forward? We know the new administration’s going to be asking for another package. What I recommend is we set aside liability and set aside state and local and pass those things we can agree on, knowing full well we’ll be back at this after the first of the year,” Senator McConnell said December 8.

Tax: If a year-end package does come together, it may include tax provisions. Agreement on a broader coronavirus package will be required for any virus-related tax items to advance, and it’s likely that such a package would need to materialize for any other tax provisions, like the extension of expiring provisions, to move this year. The Wall Street Journal served up a story on craft beverage excise tax cuts enacted with the TCJA (and extended once since) that are set to expire at the end of the year and increase taxes on local breweries that have been battered economically by the pandemic. “Unlike quarterly income-tax payments, excise taxes are due as often as twice a month,” making it more difficult for Congress to let the cuts expire and renew them retroactively, it said. “The tax cuts enjoy broad bipartisan support because so many lawmakers now have breweries in their districts…” the report said. “But the fate of the tax cuts—along with dozens of other expiring tax provisions that affect a range of industries—remains uncertain and overshadowed by the broader fight over economic aid as the lame-duck congressional session enters its final days.”

A proposal to provide some state and local tax certainty for employers and employees relating to employees that have been working in 2020 in locations other than their normal place of work will face an uphill climb due to Senate Democratic leader Chuck Schumer’s (D-NY) resistance, Senator John Thune (R-SD), a sponsor of the proposal, said December 8. “[T]here ought to be a provision in this legislation that makes it clear that … people who are, frankly, working remotely and have tax consequences as a result of that don’t get hit with a big fat tax bill by some state. New York is a good case in point, and I would hope that we could get that done and I think we can if Senator Schumer… would back down and allow this to be included…”

The next Administration: President-elect Joe Biden plans to visit Georgia next week to campaign for Jon Ossoff and Raphael Warnock ahead of the January 5 Senate runoffs that will impact how he will proceed with his agenda next year. Democrats must win both to control the chamber and have Vice President-elect Kamala Harris break 50-50 ties. President Trump campaigned last weekend for Republican Sens. David Perdue and Kelly Loeffler.

Biden announced additional nominations December 10: Secretary Tom Vilsack, Secretary of Agriculture; Congresswoman Marcia Fudge, Secretary of Housing and Urban Development; Denis McDonough, Secretary of Veterans Affairs; Katherine Tai, United States Trade Representative; and Ambassador Susan Rice, Director of the Domestic Policy Council.

CBO options: The Congressional Budget Office released “Options for Reducing the Deficit: 2021 to 2030,” a periodic compendium of budget options from a variety of sources, including legislative proposals, various Administrations’ budget proposals, congressional staff, other government entities, and private groups.

Transportation regulations: IRS has issued final regulations (TD 9939) to implement changes that the Tax Cuts and Jobs Act made to IRC Section 274, effective for tax years beginning after December 31, 2017. The final regulations largely track the underlying proposed regulations on qualified transportation fringe, transportation and commuting expenses, which were issued in June 2020.

Retirement: During the December 9 Senate Finance subcommittee hearing on “Investigating Challenges to American Retirement Security,” full Committee Chairman Chuck Grassley (R-IA) said he plans to, in the coming days, introduce legislation that builds on the SECURE Act and the provisions of a Portman-Cardin bill as well as a House bill. Also, “we’ve been negotiating with our Democratic colleagues for more than a week to find a solution on the multiemployer pension and I’d still like to find a way to reach a deal,” he said.

Regulations watch: Under review by the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) is a final rule on “Section 451(b) Requirements [TCJA].”

Below is a timeline for guidance projects released by the IRS related to the TCJA.


Federal Register Publication

Comment period end

Section 965 transition tax (TD 9846)

Final rules, February 5, 2019


Section 199A pass-through deduction (TD 9847)

Final rules, February 8, 2019


Section 956 inclusions for corporate US shareholders (TD 9859)

Final rules, May 23, 2019


Contributions in exchange for state or local tax credits (TD 9864)

Final rules, June 13, 2019


Section 951A (Global Intangible Low-Taxed Income - GILTI) and Related to Foreign Tax Credits (TD 9866)

Final rules, June 21, 2019


Bonus depreciation (TD 9874)

Final rules, September 24, 2019


Removal of Section 385 Documentation Regulations (TD 9880)

Final rules, November 4, 2019


Ownership Attribution for Purposes of Determining Whether a Person Is Related to a Controlled Foreign Corporation under section 954(d)(3) (TD 9883)

Final rules, November 19, 2019


Section 59A Base Erosion and Anti-Abuse Tax (TD 9885)

Final rules, December 6, 2019


Foreign Tax Credit (TD 9882)

Final rules, December 17, 2019


Investing in Qualified Opportunity Funds (TD 9889)

Final rules, January 13, 2020


Rules Regarding Certain Hybrid Arrangements (TD 9896)

Final rules, April 8, 2020


Treatment of Certain Interests in Corporations as Stock or Indebtedness (TD 9897)

Final rules, May 14, 2020


Guidance Under Section 6033 on Reporting Requirements of Exempt Organizations (TD 9898)

Final rules, May 28, 2020


Deduction for Foreign-Derived Intangible Income (FDII) and GILTI (TD 9901)

Final rules, July 15, 2020


Guidance Under Sections 951A and 954 Regarding Income Subject to a High Rate of Foreign Tax (TD 9902)

Final rules, July 23, 2020


Limitation on Deduction for Business Interest Expense (TD 9905)

Final rules, September 14, 2020


Limitation on DRD from Certain Foreign Corporations, Amounts Eligible for Section 954 Look-Through Exception (TD 9909)

Final rules, August 27, 2020


Additional Rules Regarding Base Erosion and Anti-Abuse Tax (TD 9910)

Final rules, October 9, 2020


Gain or Loss of Foreign Persons from Sale or Exchange of Certain Partnership Interests (TD 9919)

Final rules, November 6


Additional First Year Depreciation Deduction (TD 9916)

Final rules, November 5, 2020


Ownership Attribution Under Section 958 (TD 9908)

Final rules, September 22, 2020


Determining the foreign tax credit, etc. (TD 9922)

Final rules, November 12, 2020


Meals and Entertainment Expenses (TD 9925)

Final rules, October 9, 2020


Consolidated Net Operating Losses (TD 9927)

Final rules, October 23, 2020


Coordination of Extraordinary Disposition and Disqualified Basis Rules (TD 9934)

Final rules, December 1, 2020


Like-kind exchanges (TD 9935)

Final rules, December 2, 2020


Passive Foreign Investment Companies (TD 9936)

Final rules released December 4, 2020


Guidance on Passive Foreign Investment Companies (REG-105474-18)

Proposed rules, July 11, 2019

September 9, 2019

Revenue recognition under IRC Section 451 (REG-104870-18, REG-104554-18)

Two sets of proposed rules, September 9, 2019

November 8, 2019

Guidance on Hybrid Arrangements, Allocation of Deductions Attributable to Disqualified Payments, Section 951A (Global Intangible Low-Taxed Income) (REG-106013-19)

Proposed rules, April 8, 2020

June 8, 2020

Denial of Deduction for Certain Fines, Penalties, and Other Amounts (REG-104591-18)

Proposed rules, May 13, 2020

July 13, 2020

Credit for carbon oxide sequestration under section 45Q (REG-112339-19)

Proposed rules, June 2, 2020

August 3, 2020

Qualified Transportation Fringe, Transportation and Commuting Expenses under Section 274

Proposed rules, June 23, 2020

August 24, 2020

Guidance Under Section 954(b)(4) Regarding Income Subject to a High Rate of Foreign Tax (REG-127732-19)

Proposed rules, July 23, 2020

September 21, 2020

Limitation on Deduction for Business Interest Expense (REG-107911-18)

Proposed rules, September 14, 2020

November 2, 2020

Carried interest (REG-107213-18)

Proposed rules, August 14, 2020

October 5, 2020

Guidance related to the Foreign Tax Credit (REG-101657-20)

Proposed rules, November 12, 2020

February 10, 2021

Passive Foreign Investment Companies and the Treatment of Qualified Improvement Property under the Alternative Depreciation System for Purposes of Sections 250(b) and 951A(d) (REG-111950-20)

Proposed rules released December 4



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