February 26, 2021
U.S. Tax This Week for February 26
Ernst & Young's U.S. Tax This Week newsletter for the week ending February 26 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
CBO releases updated budget projections
On February 11, the Congressional Budget Office (CBO) released a report, The Budget and Economic Outlook: 2021 to 2031, for the 2021—2031 budget window. EY Tax Alert 2021-0403 has details.
OECD Forum on Tax Administration releases new handbook for International Compliance Assurance Programme (ICAP)
On February 18, the Organisation for Economic Co-operation and Development (OECD) Forum on Tax Administration (FTA) released a new handbook for the International Compliance Assurance Programme (ICAP) (the handbook). According to an OECD media release, following two initial pilot programs, ICAP will now be run as a full program, open to all 53 FTA member tax administrations. This transition to a program with open membership follows the plenary session held by the FTA on December 7 and 8, 2020. EY Tax Alert 2021-0420 has details.
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.
Work from anywhere | How to manage implications of workforce transformation (March 4)
During this Webcast, Ernst & Young professionals will discuss the latest developments, share market insights, and break down pertinent issues to consider in managing the challenges and embracing the opportunities of a “work from anywhere” approach..
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.
UBTI ‘siloing’ and exempt organization excess compensation final regulations (March 9)
The IRS recently issued final guidance on several of the changes affecting tax-exempt organizations enacted as part of the Tax Cuts and Jobs Act. This includes final regulations on the Section 4960 tax on excess executive compensation and Section 512(a)(6)’s siloing of unrelated business taxable income (UBTI). Join this Thought Center Webcast as we review the final guidance and discuss how to address implementation challenges and prepare for upcoming filing deadlines.
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).
Latin America ‘nearshoring’ webcast series | Costa Rica session (March 16)
Recent disruptions to global supply chains have heightened interest in the concept of “nearshoring” (i.e., the transferring of a business operation to a nearby country from a more distant one). To provide information and help answer questions about nearshoring in Latin America, EY is sponsoring a series of webcasts featuring our local country professionals. This Thought Center Webcast will focus on Costa Rica.
Recent Tax Alerts
— Feb 25: Tax Court sustains IRS's denial of research credit claimed for shipbuilding subsidiary's design and construction activities (Tax Alert 2021-0424)
Internal Revenue Service
— Feb 24: IRS issues instructions for BBA partnerships reporting push-out adjustments to partners (Tax Alert 2021-0418)
— Feb 24: IRS extends tax filing deadline to June 15, 2021, for individuals and businesses affected by Texas winter storms (Tax Alert 2021-0417)
— Feb 23: Tax M&A Update for January 2021 (Tax Alert 2021-0407)
— Feb 23: IRS extends individual and business tax filing deadline to June 15, 2021, for taxpayers affected by Texas winter storms (Tax Alert 2021-0405)
— Feb 19: Taxpayers may disregard CP59 notices if they already sent return (Tax Alert 2021-0393)
— Feb 25: Luxembourg Tax Authorities update MDR guidance (Tax Alert 2021-0432)
— Feb 25: South Africa's Minister of Finance delivers 2021 Budget Review (Tax Alert 2021-0431)
— Feb 25: Peru establishes gains from the indirect transfer of Peruvian shares will be taxed only in Chile under the Peru-Chile DTT (Tax Alert 2021-0430)
— Feb 25: Uruguayan Government modifies rules applicable to goodwill in corporate restructurings for a second time (Tax Alert 2021-0426)
— Feb 25: Argentina-Qatar tax treaty enters into force (Tax Alert 2021-0425)
— Feb 24: Russia | Requirements for 2020 annual tax reports of foreign companies operating in Moscow (Tax Alert 2021-0421)
— Feb 24: EU Member States adopt revised list of non-cooperative jurisdictions for tax purposes (Tax Alert 2021-0419)
— Feb 23: Nunavut budget 2021-22 discussed (Tax Alert 2021-0410)
— Feb 22: Argentina issues regulations for companies applying for promotional regime for knowledge-based economy (Tax Alert 2021-0401)
— Feb 19: Costa Rica's President and the Ministry of Finance published "guidelines for the implementation of treaty provisions and agreements for the importation of goods" (Tax Alert 2021-0397)
— Feb 19: Costa Rica's Executive Branch may extend period goods may stay in a tax warehouse (Tax Alert 2021-0396)
— Feb 19: High court of Kenya rules that transportation services for goods in transit are subject to VAT and input tax incurred in making exempt supplies is non-deductible (Tax Alert 2021-0392)
— Feb 19: Future social security healthcare reciprocation between the UK and EU discussed (Tax Alert 2021-0391)
— Feb 11: Singapore MOM refines features of intra-corporate transferee for purposes of job-advertisement exemption (Tax Alert 2021-0327)
— Feb 11: Future social security coordination between the UK/EU, EEA and EFTA countries discussed (Tax Alert 2021-0326)
— Feb 25: USCIS allows premium processing for E-3 petitions (Tax Alert 2021-0429)
— Feb 25: House Financial Services grills Fed Chair Powell on monetary policy, pandemic relief, economic recovery, other issues (Tax Alert 2021-0428)
— Feb 25: Becerra nomination hearing held in Senate Finance Committee (Tax Alert 2021-0423)
— Feb 24: Becerra nomination hearing held in Senate HELP Committee (Tax Alert 2021-0414)
— Feb 23: Adeyemo nomination hearing held in Finance Committee (Tax Alert 2021-0409)
— Feb 22: What to expect in Washington (February 24) (Tax Alert 2021-0415)
— Feb 22: President Biden's US Citizenship Act discussed (Tax Alert 2021-0402)
— Feb 25: Maryland law reaffirms COVID-19 UI benefits are not factored into employer SUI tax rates; 2021 SUI tax rates will nonetheless increase substantially (Tax Alert 2021-0427)
— Feb 24: Illinois state unemployment insurance tax rates and wage base increase for 2021 (Tax Alert 2021-0416)
— Feb 23: Wisconsin Governor signs legislation updating state's IRC conformity and providing tax relief (Tax Alert 2021-0411)
— Feb 23: New Jersey court says changes are needed to local payroll taxes to prevent double taxation (Tax Alert 2021-0406)
— Feb 22: Nebraska Department of Revenue limits application of its dividends received deduction on Subpart F income (Tax Alert 2021-0404)
— Feb 19: New Jersey law reduces impact of COVID-19 UI benefits on employer state unemployment insurance tax rates over three fiscal years (Tax Alert 2021-0395)
— Feb 19: Oregon Department of Revenue confirms applicability of Corporate Activity Tax to insurers (Tax Alert 2021-0394)
State and Local Tax Weekly
Highlights of this edition include:
— Maryland legislature overrides governor's vetoes, enacts new tax on digital advertising and expands sales and use tax to digital goods On Feb. 12, 2021, the Maryland legislature overrode Maryland Governor Larry Hogan's vetoes of HB 732, which imposes a new tax on digital advertising, and HB 932, which extends the state's existing sales and use tax to the sale of digital goods.
— Income/Franchise, Sales & Use, Business Incentives, Controversy, Payroll & Employment Tax, Upcoming Webcasts
IRS Weekly Wrap-Up
| ||TD 9935||Statutory Limitations on Like-Kind Exchanges; Correction|
| ||Notice 2021-16||Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates|
| ||Notice 2021-18||Determination of Housing Cost Amounts Eligible for Exclusion or Deduction for 2021|
Internal Revenue Bulletin
| ||2021-09||Internal Revenue Bulletin of March 1, 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.