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Ernst & Young's U.S. Tax This Week newsletter for the week ending January 8 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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EY Guides, Surveys, and Reports

Washington in 2021 | Democrats control White House and Congress
Democrats Jon Ossoff and Raphael Warnock won the Georgia runoff elections, giving Democrats control of the Senate beginning later this month. With the parties split 50-50 in the Senate, Vice President-elect Kamala Harris will break ties, allowing major priorities like stimulus, climate change, and health care, potentially paid for with tax increases, to be brought up and passed in the House and Senate. The party ratio in the chamber was going to be narrow under either Georgia runoff scenario, requiring bipartisan cooperation for much to get done, but Senate control affords Democrats additional options like budget reconciliation.

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Upcoming Webcasts

Tax in a Time of Global Disruption (January 12)
During this Thought Center Webcast, EY and the Tax Council Policy Institute cordially invite you to join a live, interactive webcast examining some of the challenges and opportunities that are ahead of us all as we navigate tax in 2021 and beyond.

Latin America ‘nearshoring’ webcast series: Mexico session (January 13)
During this Thought Center Webcast, Ernst & Young professionals will provide information and help answer questions about "nearshoring" (i.e., the transferring of a business operation to a nearby country from a more distant one) in Latin America. This latest session in the series will focus on Mexico.

New Section 162(m) final regulations: what do you need to know now? (January 19)
During this Thought Center Webcast, Ernst & Young professionals will provide an overview of the changes to the rules, including the expansion of the public issuer and covered employee definitions, and discuss areas where changes were made to the proposed regulations.

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Recent Tax Alerts

Internal Revenue Service

— Jan 06: IRS extends safe harbor for renewable energy projects offshore or on federal land (Tax Alert 2021-0029)

— Jan 06: IRS issues final regulations under IRC Section 45Q on carbon oxide sequestration (Tax Alert 2021-0025)

— Jan 06: IRS rules that subsidiary REIT of a publicly traded REIT is exempt from preferential dividend rule (Tax Alert 2021-0022)

— Jan 05: IRS establishes safe harbor for IRC Section 163(j) deductions for qualified residential living facilities (Tax Alert 2021-0017)

— Dec 23: IRS finalizes regulations updating simplified tax accounting rules for small businesses to reflect TCJA changes (Tax Alert 2020-2931)

International

— Jan 07: Argentina's tax authorities launch the "Régimen IPF" service to ensure compliance with mandatory disclosure regime (Tax Alert 2021-0038)

— Jan 07: Czech Republic approves changes in personal income tax rates and computation of employment income tax base (Tax Alert 2021-0036)

— Jan 06: Future social security coordination between the UK and EU discussed (Tax Alert 2021-0032)

— Jan 06: Spain approves State Budget Bill for 2021 (Tax Alert 2021-0026)

— Jan 06: Peru approves and ratifies double tax treaty with Japan (Tax Alert 2021-0024)

— Jan 06: Global labor and employment law strategic topics | December 2020 Edition (Tax Alert 2021-0020)

— Jan 05: Argentina issues decree on the promotional regime for the knowledge-based economy (Tax Alert 2021-0018)

— Jan 05: UK Government announces approach to UK MDR post UK-EU Brexit Agreement (Tax Alert 2021-0016)

— Jan 05: Polish Ministry of Finance publishes decree deferring certain provisions of the new withholding tax reform to 30 June 2021 (Tax Alert 2021-0015)

— Jan 05: USTR announces modifications to tariffs on EU goods under Section 301 including punitive tariffs on new items of French and German origin (Tax Alert 2021-0014)

— Jan 04: Egypt releases capital gains tax guidelines for nonresidents (Tax Alert 2021-0008)

— Jan 04: Jordan tightens corporate income tax filing process as of 2021 (Tax Alert 2021-0007)

— Jan 04: UK and EU reach trade agreement (Tax Alert 2021-0002)

— Dec 23: OECD releases guidance on transfer pricing implications of COVID-19 pandemic (Tax Alert 2020-2936)

— Dec 23: Egypt amends Unified Tax Procedures Law (Tax Alert 2020-2935)

— Dec 23: Luxembourg extends filing deadlines for tax returns (Tax Alert 2020-2934)

Legislation

— Jan 08: What to expect in Washington (January 8) (Tax Alert 2021-0051)

— Jan 06: Consolidated Appropriations Act, 2021, contains expansion of certain real estate credits (Tax Alert 2021-0030)

— Jan 06: Consolidated Appropriations Act, 2021, extends certain energy credits (Tax Alert 2021-0028)

— Jan 06: Major points of interest for tax-exempt organizations from the Consolidated Appropriations Act, 2021 (Tax Alert 2021-0027)

— Jan 05: Consolidated Appropriations Act, 2021 modifies and extends key employment-related tax credits and creates new tax credit for employers in 2020 qualified disaster zones (Tax Alert 2021-0019)

— Jan 04: Senate votes 81-13 to override President's veto of defense authorization bill carrying money-laundering provisions (Tax Alert 2021-0005)

— Dec 23: Consolidated Appropriations Act, 2021 extends many credits and other COVID-19 relief (Tax Alert 2020-2938)

— Dec 23: Consolidated Appropriations Act, 2021 applies TCJA depreciation provisions to all residential rental real estate (Tax Alert 2020-2932)

States

— Jan 07: Updated EY publication includes income tax law changes enacted at the close of Q4 2020 (Tax Alert 2021-0042)

— Jan 07: Connecticut reminds employers to register for paid family and medical insurance program, start employee payroll deductions on January 1, 2021 (Tax Alert 2021-0041)

— Jan 07: ImagiNE Nebraska Act in effect January 1, 2021 (Tax Alert 2021-0040)

— Jan 07: Sales and Use Tax Quarterly Update for First Quarter of 2021 (Tax Alert 2021-0039)

— Jan 07: Texas adopts sweeping amendments to sourcing rule for franchise tax (Tax Alert 2021-0035)

— Jan 06: Ohio legislature passes bill reducing Financial Institutions Tax for “de novo” banks and excluding mortgage bankers from Commercial Activity Tax (Tax Alert 2021-0031)

— Jan 06: Most states conform with federal requirement to report nonemployee compensation on Form 1099-NEC starting in tax year 2020 (Tax Alert 2021-0023)

— Jan 05: Federal mileage rates decrease in 2021, luxury vehicle limit is increased (Tax Alert 2021-0013)

— Jan 05: 2021 state income tax withholding tables, supplemental withholding and highest tax rates (Tax Alert 2021-0012)

— Jan 04: Montana water's-edge election due March 31, 2021, for calendar-year taxpayers (Tax Alert 2021-0009)

— Dec 23: Washington employer workers' compensation rates will not increase for 2021 (Tax Alert 2020-2937)

— Dec 23: State corporate income and franchise tax developments in the fourth quarter of 2020 (Tax Alert 2020-2930)

— Dec 23: California 2021 unemployment, disability and employment training tax rates and limits (Tax Alert 2020-2929)

— Dec 23: Indiana county income tax rate changes effective January 1, 2021; 2020 Form W-2 reminders (Tax Alert 2020-2928)

— Dec 23: Michigan legislation reinstates COVID-19 UI benefit provisions after state Supreme Court rules governor's executive orders are unconstitutional (Tax Alert 2020-2927)

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Recent Newsletters

ITS/Washington Dispatch
   Highlights of this edition include:

Legislation

• US Congress passes coronavirus stimulus and omnibus spending package that includes extension of CFC look-through

IRS news

• IRS issues final and proposed PFIC regulations that provide mix of favorable and unfavorable provisions
• Final and proposed regulations on passive foreign investment companies have both favorable and unfavorable implications for insurance companies
• Treasury to focus on other international projects, tax treaties as TCJA guidance nears completion
• Treasury's FinCEN further extends certain signature authority reporting (FBAR, Form 114) over foreign financial accounts

Transfer Pricing News

• Transfer pricing enforcement remains priority even while TCJA provisions may negate adjustments
• IRS APMA seeing more queries on transfer pricing consequences of coronavirus pandemic

OECD Developments

• OECD issues guidance on transfer pricing implications of COVID-19, hard- to-value intangibles
• OECD releases fourth peer review report on BEPS Action 5 on the Exchange of Information of Tax Rulings
• OECD's FTA hosts virtual meeting of tax administration leaders

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IRS Weekly Wrap-Up

Final Regulations

Revenue Procedures

Revenue Rulings

Notices

Internal Revenue Bulletin

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.