February 21, 2021
U.S. Tax This Week for February 19
Ernst & Young's U.S. Tax This Week newsletter for the week ending February 19 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
IRS's Advance Pricing and Mutual Agreement Program continues case closures despite COVID restrictions
The IRS's program to resolve transfer pricing disputes (Advance Pricing and Mutual Agreement Program (APMA)) has adapted well to the virtual environment resulting from the COVID-19 pandemic. Speaking at a Tax Council Policy Institute conference, Douglas O'Donnell, Commissioner of the IRS Large Business and International Division, said case closures have been "surprisingly robust" despite the fact the work has become completely virtual. EY Tax Alert 2021-0350 has details.
OECD releases 10th batch of peer review reports on BEPS Action 14 related to improving dispute resolution
On February 16, the Organisation for Economic Co-operation and Development (OECD) released the 10th batch of peer review reports, which relate to the implementation by Aruba, Bahrain, Barbados, Gibraltar, Greenland, Kazakhstan, Oman, Qatar, Saint Kitts and Nevis, Thailand, Trinidad and Tobago, United Arab Emirates (UAE), and Vietnam of the Base Erosion and Profit Shifting (BEPS) minimum standard on Action 14 (Making Dispute Resolution Mechanisms More Effective). EY Tax Alert 2021-0370 has details.
EY Tax.Tech™ webcast series - The intelligent tax function: Data management and intelligent automation (February 23)
During this Thought Center Webcast, Ernst & Young professionals will focus on the very important aspect of data management and intelligent automation. Throughout our discussion, we will be featuring demos as we cover some of the tools and solutions that are relevant to this topic.
Domestic tax quarterly webcast series: A focus on state tax matters (February 24)
For this first quarterly Webcast in 2021, Douglas L. Lindholm, President & Executive Director of the Council On State Taxation (COST) will join us to discuss important state tax policy developments, as well as federal tax developments that could affect state and local taxes.
The outlook for global tax policy and controversy in 2021 (February 25)
During this Thought Center Webcast, Ernst & Young professionals will discuss the findings reported in the upcoming EY 2021 Tax Policy & Controversy Outlook, focusing on the most significant tax law and administration trends and highlighting leading practices for companies as they navigate tax developments around the world in the year ahead.
State & local tax developments in the real estate industry (March 3)
During this Thought Center Webcast, Ernst & Young experienced SALT professionals will discuss: (i) Tax relief measures under the Consolidated Appropriations Act, 2021; (ii) Remote workforce issues, including wage withholding, business tax and individual income tax; (iii) SALT deduction cap workarounds, including New York State and California partnership tax proposals; and (iv) Other recent SALT legislative activity, including various states’ budget proposals.
Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS (March 5)
During this Thought Center Webcast, Ernst & Young professionals will provide updates on: (i) US economy, elections and tax policy; (ii) Breaking developments; and (iii) What’s happening at the IRS.
Meals and entertainment (M&E) expenses and other fringe benefits (March 10)
During this Thought Center Webcast, Ernst & Young professionals will discuss the changes in rules governing the deductibility of M&E expenses under the Tax Cuts and Jobs Act (TCJA).
Recent Tax Alerts
— Feb 12: Eighth Circuit reverses taxpayer-favorable Tax Court opinion - tax return received by Virgin Islands taxing authorities didn't satisfy couple's US tax filing obligations (Tax Alert 2021-0342)
Internal Revenue Service
— Feb 18: IRS issues guidance on flexibility for health FSAs and dependent care assistance programs during COVID-19 pandemic (Tax Alert 2021-0375)
— Feb 15: IRS's Advance Pricing and Mutual Agreement Program continues case closures despite COVID restrictions (Tax Alert 2021-0350)
— Feb 12: IRS TE/GE issues FY 2020 report on compliance activities of Exempt Organization function (Tax Alert 2021-0341)
— Feb 18: Uruguayan Executive Power modifies the promotional regime for construction activities considered 'great economic dimension projects' (Tax Alert 2021-0378)
— Feb 18: Uruguayan Executive Power increases tax benefits granted to investment projects (Tax Alert 2021-0377)
— Feb 17: OECD releases 10th batch of peer review reports on BEPS Action 14 related to improving dispute resolution (Tax Alert 2021-0370)
— Feb 17: German Ministry of Finance publishes working draft of Act to Combat Tax Avoidance and Unfair Tax Competition (Tax Alert 2021-0369)
— Feb 17: Luxembourg implements defensive measures related to EU-listed non-cooperative jurisdictions (Tax Alert 2021-0368)
— Feb 17: Canada confirms hotel quarantine measures and airport and land border testing (Tax Alert 2021-0367)
— Feb 16: Israeli Tax Authority publicly presents its view on profit split application for R&D centers (Tax Alert 2021-0362)
— Feb 16: Cyprus Tax Authorities publish 10-year government bond yield rates for NID purposes (Tax Alert 2021-0361)
— Feb 16: The latest on BEPS and Beyond for February 2021 (Tax Alert 2021-0357)
— Feb 15: Thailand enacts new VAT rules for foreign e-business and digital services (Tax Alert 2021-0354)
— Feb 15: OECD, UN, IMF and World Bank Group present toolkit on the implementation of effective transfer pricing documentation requirements (Tax Alert 2021-0353)
— Feb 15: Hungarian Ministry of Finance issues guidance on Mandatory Disclosure Rules (Tax Alert 2021-0352)
— Feb 12: New special measures to support Hong Kong residents to settle and remain in Canada discussed (Tax Alert 2021-0340)
— Feb 12: India releases 2021-22 Union Budget (Tax Alert 2021-0339)
— Feb 12: Hong Kong introduces tax concessions for carried interest (Tax Alert 2021-0338)
— Feb 18: What to expect in Washington (February 18) (Tax Alert 2021-0371)
— Feb 15: House Energy & Commerce Committee approves $188.5 billion in Reconciliation Bill provisions to combat COVID-19 (Tax Alert 2021-0349)
— Feb 12: Ways & Means approves COVID Reconciliation Bill (Tax Alert 2021-0332)
— Feb 18: Recently adopted Illinois regulations require certain remote sellers to collect local and state use taxes beginning February 20, 2021 (Tax Alert 2021-0376)
— Feb 18: Maine extends nexus relief for sales and use tax for COVID-19 through 2021; income tax requirements are unaffected by COVID-19 (Tax Alert 2021-0372)
— Feb 16: Alabama modifies its corporate income tax, exempts certain COVID-19-related payments from state tax, extends various tax credits (Tax Alert 2021-0360)
— Feb 16: Montana Department of Revenue confirms that teleworkers providing services in the state in 2020 due to COVID-19 are subject to income tax (Tax Alert 2021-0359)
— Feb 15: California requirement for COVID-19 supplemental paid sick leave expired December 31, 2020; some cities and counties have extended the requirement (Tax Alert 2021-0351)
— Feb 12: Maryland legislature overrides governor's vetoes, enacts new taxes on digital advertising and sales of digital goods (Tax Alert 2021-0343)
State and Local Tax Weekly
Highlights of this edition include:
— New Jersey clarifies how state law change redefining "taxpayer" to include a combined group will impact Corporation Business Tax returns. The New Jersey Division of Taxation (NJ DOT) has released another in a series of technical bulletins on law changes enacted in November 2020 that made technical corrections and substantive changes to reform legislation enacted in 2018 under the Corporation Business Tax Act (CBTA).
— Income/Franchise, Sales & Use, Property Tax, Controversy, Payroll & Employment Tax, Miscellaneous Tax, Upcoming Webcasts
IRS Weekly Wrap-Up
| ||2021-05||Section 1274.—Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property|
| ||2021-16||Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates|
| ||2021-15||Additional Relief For Coronavirus Disease (Covid-19) Under Section 125|
Internal Revenue Bulletin
| ||2021-07||Internal Revenue Bulletin of February 16, 2021|
| ||2021-08||Internal Revenue Bulletin of February 22, 2021|
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.