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March 21, 2021
2021-0587

U.S. Tax This Week for March 19

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

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Top of the Week

IRS delays deadline for individuals filing and paying income tax to May 17, 2021

On March 17, 2021, the Treasury Department and IRS announced the automatic extension until May 17, 2021, for individuals to file Form 1040 and pay federal income taxes without penalties or interest for the 2020 tax year. The relief applies to individuals, including those who pay self-employment tax. Individual taxpayers do not need to file any forms or call the IRS to qualify for the extension. The postponement does not apply to 2021 estimated tax payments due on April 15, 2021, which are still due on that date. The postponement also does not apply to state tax payments or deposits or payments of any other type of federal tax. EY Tax Alert 2021-0586 has details.

Federal government's long-term fiscal outlook significantly worsened by latest COVID-related relief

The Congressional Budget Office indicates in its recently released The 2021 Long-Term Budget Outlook (3/4/2021) that the COVID-19 pandemic and related policy have significantly worsened the federal government's long-term fiscal imbalance. EY has quantified the further impact on the federal government's long-term fiscal imbalance of the $1.9 trillion of COVID relief enacted by Congress last week (American Rescue Plan Act of 2021). EY Tax Alert 2021-0585 has details.

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Upcoming Webcasts

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.

BorderCrossings ... With EY transfer pricing and tax professionals (March 25)
This Thought Center Webcast will feature an update on TP controversy in Israel from Ernst & Young LLP (US) and Ernst & Young (Israel) Ltd TP and International Tax professionals.

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

Internal Revenue Service

— Mar 18: IRS delays deadline for individuals filing and paying income tax to May 17, 2021 (Tax Alert 2021-0586)

— Mar 16: Adding ADA-required ramp to historic building constitutes a permitted change that won't affect charitable deduction for donor of facade easement, IRS determines (Tax Alert 2021-0569)

— Mar 16: IRS updates FATCA FAQs to extend penalty relief for 2020 and 2021 withholding and reporting (Tax Alert 2021-0568)

— Mar 16: IRS says assumption of reinsurance agreement does not result in base erosion payments (Tax Alert 2021-0566)

— Mar 16: Tax M&A Update for February 2021 (Tax Alert 2021-0563)

International

— Mar 18: Ontario to introduce an expression of interest system for the Ontario Immigration Nominee Program (Tax Alert 2021-0584)

— Mar 18: Canada temporarily expands post-graduation work permit program (Tax Alert 2021-0583)

— Mar 18: Spain implements EU ATAD 2 | Detailed analysis (Tax Alert 2021-0579)

— Mar 18: Bulgaria may “deactivate” VAT registrations of UK businesses following Brexit (Tax Alert 2021-0578)

— Mar 18: Australia introduces measures to remove Offshore Banking Unit regime (Tax Alert 2021-0577)

— Mar 18: EU Finance Ministers exchange views on digital taxation while the Commission announces it may introduce a digital levy separate from OECD’s Pillar One (Tax Alert 2021-0576)

— Mar 17: New Brunswick budget 2021-22 discussed (Tax Alert 2021-0574)

— Mar 16: Uruguayan tax authorities rule on which investments in real estate property are valid for a foreign individual to obtain tax residency (Tax Alert 2021-0573)

— Mar 16: Quebec's new pilot immigration programs discussed (Tax Alert 2021-0572)

— Mar 16: The latest on BEPS and Beyond for March 2021 (Tax Alert 2021-0567)

— Mar 16: Argentine Government plans to send bill to Congress that would raise corporate income tax rates (Tax Alert 2021-0565)

— Mar 16: Ecuador's President issues regulations for the payment of income tax by microenterprises (Tax Alert 2021-0564)

— Mar 16: Ecuador's Tax Administration issues regulations on voluntary estimated income tax payments (Tax Alert 2021-0562)

— Mar 16: Liechtenstein's transition period for simplified application of participation exemption ends in 2021 and may require action (Tax Alert 2021-0561)

— Mar 15: Uruguayan tax authorities rule taxpayer must remain in 'tax holiday' regime (Tax Alert 2021-0559)

— Mar 15: Bahrain introduces Country-by-Country Reporting (Tax Alert 2021-0558)

— Mar 15: Prince Edward Island budget 2021-22 discussed (Tax Alert 2021-0557)

— Mar 15: Dominican Republic issues draft amendments to transfer pricing regulations (Tax Alert 2021-0555)

— Mar 12: USCIS discontinues Form I-944, Declaration of Self-Sufficiency (Tax Alert 2021-0548)

— Mar 17: USCIS announces possible H-1B reconsiderations due to rescinded memos (Tax Alert 2021-0531)

Legislation

— Mar 18: Federal government's long-term fiscal outlook significantly worsened by latest COVID-related relief (Tax Alert 2021-0585)

— Mar 18: Energy and Commerce hearing on Biden Administration actions to increase COVID-19 vaccinations (Tax Alert 2021-0580)

— Mar 17: What to expect in Washington (March 17) (Tax Alert 2021-0575)

— Mar 16: Senate Finance holds hearing on tax issues for manufacturers (Tax Alert 2021-0570)

States

— Mar 16: Kentucky enacts law allowing deduction for expenses paid with proceeds of forgiven Paycheck Protection Program loans (Tax Alert 2021-0571)

— Mar 12: Puerto Rico's Treasury Department extends the time for pass-through entities to file their returns to April 15 (Tax Alert 2021-0549)

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Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

— Digital products subject to Maryland sales and use tax include electronically delivered canned software and software as a service. The Maryland Comptroller of Treasury (MD Comptroller) issued guidance on the application of the recent statutory expansion of the state's sales and use tax to the sale or use of digital products in Maryland, which applies effective March 14, 2021.

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

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IRS Weekly Wrap-Up

Notices

 2021-17This notice clarifies Notice 2021–12, 2021–6 I.R.B. 828, by providing a more precise citation in section IV.E of that notice
 2021-18Determination of Housing Cost Amounts Eligible for Exclusion or Deduction for 2021

Internal Revenue Bulletin

 2021-12Internal Revenue Bulletin of March 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.

 

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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