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March 14, 2021
2021-0541

U.S. Tax This Week for March 12

Ernst & Young's U.S. Tax This Week newsletter for the week ending March 12 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

President signs $1.9 trillion COVID-19 relief bill

On Thursday, March 11, President Biden signed the $1.9 trillion American Rescue Plan Act (H.R. 1319), which includes modifications but not drastic changes to the ambitious pandemic relief plan the president originally outlined in January. The president's action comes one day after the House cleared the bill on a vote of 220-211, with one Democrat voting against the bill along with all Republicans. The Senate passed the bill March 6 after a marathon all-night session, 50-49, also with no Republicans in support. EY Tax Alert 2021-0538 has details.

CBO's 2021 long-term budget outlook indicates pandemic has significantly worsened the federal government's long-term fiscal imbalance

On March 4, 2021, the Congressional Budget Office (CBO) released The 2021 Long-Term Budget Outlook. Due in large part to the COVID-19 pandemic and related policy, the CBO reports that the federal government's long-term fiscal imbalance has significantly worsened. EY Tax Alert 2021-0532 has details.

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Upcoming Webcasts

Latin America ‘nearshoring’ webcast series: Costa Rica session (March 16)
During this Thought Center Webcast, Ernst & Young professionals will provide information and help answer questions about nearshoring in Costa Rica.

Foreign bank account reporting (FBAR) (March 17)
FBAR impacts virtually every US organization with an international footprint, along with numerous individuals for both personal and company accounts. Please join EY professionals on this Thought Center Webcast as we discuss successful approaches for practically applying the rules while avoiding common missteps.During this Thought Center Webcast, Ernst & Young professionals.

Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments (March 19)
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.

Accounting for income taxes: A quarterly perspective (March 23)
During this Thought Center Webcast, Ernst & Young professionals, moderated by Angela Evans, EY Americas Co-Director of Tax Accounting and Risk Advisory Services (TARAS), will discuss ongoing issues and regulatory trends in the tax accounting arena.

EY Tax.Tech™ webcast series (March 24)
Digital transformation has been on the Tax agenda for a while. In the wake of the global pandemic, it’s now squarely at the top of the to-do list and a fundamental prerequisite for resilient business solutions. In this Thought Center Webcast, we will focus on the very important aspect of data management and intelligent automation.

The many faces of the marketplace facilitator: How sales and use tax rules aimed at marketplaces have affected multiple industries (March 30)
Since the U.S. Supreme Court’s decision in South Dakota v. Wayfair nearly three years ago, sales and use tax developments have been dominated by the imposition of new requirements on marketplace facilitators. This Thought Center Webcast will feature leaders from Ernst & Young LLP’s Sales and Use Tax Practice, who will discuss how these laws, designed to capture sales made by smaller marketplace sellers, have also created multiple new compliance obligations for larger businesses that are not primarily engaged in retail activities.

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Recent Tax Alerts

Courts

— Mar 08: Ninth Circuit reverses district court's dismissal of research credit case (Tax Alert 2021-0510)

Internal Revenue Service

— Mar 10: EY-annotated Form 990-T highlights changes to redesigned 2020 Form 990-T and instructions (Tax Alert 2021-0535)

— Mar 08: IRS's advance pricing and mutual agreement program director discusses taxpayers' treatment of COVID-related costs (Tax Alert 2021-0519)

— Mar 08: IRS releases formal guidance on employee retention credit for 2020 (Tax Alert 2021-0513)

— Mar 05: IRS updates virtual currency FAQs to clarify reporting obligation on 2020 Form 1040 (Tax Alert 2021-0505)

International

— Mar 11: OECD releases guidance on combatting professional enablers in tax and other financial crimes (Tax Alert 2021-0540)

— Mar 11: PE Watch | Latest developments and trends, March 2021 (Tax Alert 2021-0537)

— Mar 11: Spanish Council of Ministers approves implementation of ATAD 2 (Tax Alert 2021-0536)

— Mar 10: Ecuador issues immigration guidelines related to COVID-19 (Tax Alert 2021-0534)

— Mar 10: India's reduced threshold for e-invoicing applies from 1 April 2021 (Tax Alert 2021-0527)

— Mar 09: Indian Supreme Court rules on taxability of software payments (Tax Alert 2021-0523)

— Mar 09: Qatar issues additional guidance on transfer pricing reporting requirements (Tax Alert 2021-0521)

— Mar 09: Trade Watch | Issue 1 2021 (Tax Alert 2021-0520)

— Mar 08: Brazil would increase social contribution tax by five percentage points for insurance companies, banks and other financial services entities (Tax Alert 2021-0517)

— Mar 08: US suspends punitive tariffs on UK- and EU-origin goods for four-month period (Tax Alert 2021-0515)

— Mar 08: Hong Kong announces 2021/22 Budget (Tax Alert 2021-0514)

— Mar 08: OECD releases Qatar Stage 1 peer review report on implementation of Action 14 minimum standard (Tax Alert 2021-0512)

— Mar 05: OECD issues report to G20 finance ministers and Central Bank governors and hosts webcast on the outcomes of the G20 meeting and other tax developments (Tax Alert 2021-0506)

— Mar 05: Brazilian Senate approves three new treaties for the avoidance of double taxation (Tax Alert 2021-0500)

— Mar 05: US Court of International Trade Decision questions first sale principle applicability to Chinese- and Vietnamese-origin goods (Tax Alert 2021-0499)

— Mar 05: Yukon budget 2021-22 discussed (Tax Alert 2021-0496)

— Mar 05: The Netherlands starts consultation on unilaterally addressing transfer pricing mismatches (Tax Alert 2021-0493)

Legislation

— Mar 11: American Rescue Plan Act extends and expands COVID-19 relief legislation (Tax Alert 2021-0539)

— Mar 11: Congress passes $1.9 trillion COVID-19 relief bill (Tax Alert 2021-0529)

— Mar 10: What to expect in Washington (March 10) (Tax Alert 2021-0525)

— Mar 10: House clears $1.9 Trillion COVID-19 relief bill, 220-211 (Tax Alert 2021-0528)

— Mar 10: Senate HELP hearing on COVID-19 response (Tax Alert 2021-0526)

— Mar 09: Sen. Warren proposes 2%-3% wealth tax on wealthy individuals and trusts (Tax Alert 2021-0524)

— Mar 08: Senate passes COVID relief bill after overnight session (Tax Alert 2021-0508)

— Mar 05: House Energy & Commerce hearing on the future of telehealth (Tax Alert 2021-0494)

States

— Mar 10: Connecticut governor signs relief tax measure for remote workers (Tax Alert 2021-0533)

— Mar 10: Digital products subject to Maryland sales and use tax include electronically delivered canned software and software as a service (Tax Alert 2021-0530)

— Mar 05: California FTB announces new 2020 filing requirement for certain business taxpayers (Tax Alert 2021-0492)

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Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

— Wisconsin Governor signs legislation updating state's IRC conformity and providing tax relief On Feb. 18, 2021, Wisconsin Governor Evers signed 2021 Wisconsin Act 1 (AB 2), which updates the Internal Revenue Code (IRC) conformity for the state's income tax law. 

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

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IRS Weekly Wrap-Up

Corrections

 TD 9936Guidance on Passive Foreign Investment Companies; Correction
 TD 9926Withholding of Tax and Information Reporting With Respect to Interests in Partnerships Engaged in a U.S. Trade or Business; Correcting Amendment

Internal Revenue Bulletin

 2021-10Internal Revenue Bulletin of March 8, 2021
 2021-11Internal Revenue Bulletin of March 15, 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.

 

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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