April 25, 2021
U.S. Tax This Week for April 23
Ernst & Young's U.S. Tax This Week newsletter for the week ending April 23 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
Senate Finance holds hearing on inequality in the tax code
The Senate Finance Committee's April 20 hearing, "Combatting Inequality: The Tax Code and Racial, Ethnic, and Gender Disparities" included discussion of the lower taxes for wealth income versus wage income, Opportunity Zones, the benefits of the TCJA, and the SALT cap, with Republicans noting that repealing the limitation benefits higher income taxpayers. Witness Mihir Desai discouraged the Committee from pursuing corporate tax increases, especially on their global activities, because the idea that there is a lot of revenue to be gained there is not well-founded and doesn't reflect that half the corporate tax is borne by workers. There was also discussion of the tax gap, which some senators are arguing should be a revenue source, especially after recent comments from the IRS commissioner that it may be $1 trillion per year. EY Tax Alert 2021-0814 has details.
OECD releases fourth batch of Stage 2 peer review reports on dispute resolution
On 15 April 2021, the Organisation for Economic Co-operation and Development (OECD) released the fourth batch of Stage 2 peer review reports relating to the outcome of the peer monitoring of the implementation by Australia, Ireland, Israel, Japan, Malta, Mexico, New Zealand, and Portugal (the assessed jurisdictions) of the Base Erosion and Profit Shifting (BEPS) minimum standard on dispute resolution under Action 14 of the BEPS project. These Stage 2 reports focus on evaluating the progress made by the assessed jurisdictions in addressing any recommendations that resulted from the Stage 1 peer review reports that were released on 30 August 2018. EY Tax Alert 2021-0809 has details.
EY Guides and Publications
EY's state guide to COVID-19 payroll and employment tax provisions is updated through April 13, 2021
This publication has been updated through April 13, 2021 and includes the complete tracker of state and local income tax and nexus relief for COVID-19.
ASEAN-6 panel discussions: Integrated regional value chains – Part 2: Electronics and automotive (April 27)
During this EY Webcast, guest panelists from government investment agencies in key ASEAN countries will be sharing insights on individual country strengths and how complementary segments of a value chain can be optimized across multiple ASEAN locations.
Upcoming changes to IRC Section 174: Amortization of research and experimental expenditures (April 27)
During this Thought Center Webcast, Ernst & Young professionals will discuss (i) the upcoming changes to IRC Section 174, (ii) the potential tax and operational impact of these changes, (iii) immediate and long-term potential planning, and (iv) proposed legislation.
BorderCrossings . . . with EY transfer pricing and tax professionals (April 29)
During this Thought Center Webcast, Ernst & Young professionals will have an in-depth discussion of BEPS 2.0 for 2021.
Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments (April 30)
During this Thought Center Webcast, Ernst & Young professionals will discuss how businesses can navigate the tax policy environment and continue to effectively operate their tax function in this time of crisis and change. Panelists will provide updates on: (i) The US economy and tax policy; (ii) Breaking developments; and (iii) What’s happening at the IRS.
Operationalizing your intelligent tax function | Insights and hands-on tax training from EY & Thomson Reuters (May 4)
This past year of remote working created both an unprecedented need and opportunity to drive efficiencies for Tax organizations. Join EY and Global Alliance partners from Thomson Reuters for a hands-on, step-by-step webcast on developing an integrated process with Alteryx automation, ONESOURCE Workpapers, and ONESOURCE Tax Provision. During this webcast, our presenters will share tips and tricks on how to get started, as well as leading practices to enhance your current processes.
Unclaimed property enforcement amidst regulatory compliance challenges (May 6)
Please join members of Ernst & Young LLP’s Unclaimed Property and Escheat Services, for this Thought Center Webcast, practice as they address the current landscape. Our panel also welcomes guest speakers Michael Houghton and Donna Culver from the Unclaimed Property practice group of the Delaware law firm of Morris, Nichols, Arsht & Tunnell LLP, who will discuss specific challenges to Delaware’s unclaimed property enforcement program, as well as ambiguities, risks, and defenses presented with ongoing litigation.
Work from anywhere: How do we re-envisage our future after the unimaginable? (May 19)
During this EY Webcast, Ernst & Young professionals will highlight the journey of four organizations during this complicated year. Learn how they each reimagined how and where work gets done. Each panelist will share a unique point of view on the success and challenges of the past year, including a look ahead.
Recent Tax Alerts
Internal Revenue Service
— Apr 21: IRS will accept e-signatures on specified forms until end of 2021 (Tax Alert 2021-0825)
— Apr 21: New IRS fact sheet details small employer tax credits under the American Rescue Plan (Tax Alert 2021-0822)
— Apr 19: IRS declines to follow Tax Court decision holding interest in a pension plan wasn’t an asset for purposes of IRC Section 108 insolvency exclusion (Tax Alert 2021-0795)
— Apr 22: Canadian government promises investment in Canadian immigration in new budget announcement (Tax Alert 2021-0833)
— Apr 22: Ecuador and the United States sign Tax Information Exchange Agreement (Tax Alert 2021-0832)
— Apr 22: Ghana enacts Financial Sector Recovery Levy and introduces other tax reforms (Tax Alert 2021-0828)
— Apr 22: Canada announces new pathway to permanent residence for essential services workers and international graduates (Tax Alert 2021-0826)
— Apr 22: Norwegian Tax Authority announces digital VAT reporting will be implemented for 2022 (Tax Alert 2021-0824)
— Apr 22: Angola's Indirect Tax Changes for 2021 discussed (Tax Alert 2021-0823)
— Apr 22: Australian Taxation Office issues draft guidance regarding the imported hybrid mismatch rule impacting large global groups (Tax Alert 2021-0821)
— Apr 21: Ecuador updates immigration guidelines related to COVID-19 (Tax Alert 2021-0819)
— Apr 21: British Columbia budget 2021-22 discussed (Tax Alert 2021-0817)
— Apr 20: Mexican Congress approves bill that would prohibit outsourcing services in Mexico (Tax Alert 2021-0815)
— Apr 21: The Latest on BEPS and Beyond | April 2021 edition (Tax Alert 2021-0813)
— Apr 20: Germany | CJEU rules that the VAT Directive precludes national rules prohibiting a partnership from VAT grouping (Tax Alert 2021-0810)
— Apr 20: OECD releases fourth batch of Stage 2 peer review reports on dispute resolution (Tax Alert 2021-0809)
— Apr 20: Canada's Federal Budget 2021-22 | A recovery plan for jobs, growth and resilience (Tax Alert 2021-0808)
— Apr 20: Highlights of Canada's Federal Budget 2021-22 provided (Tax Alert 2021-0807)
— Apr 20: Indonesia issues implementing regulations for Job Creation Law (Tax Alert 2021-0804)— Apr 20: Kenya’s High Court rules that a Commercial Building Allowance is not premised on year of construction (Tax Alert 2021-0801)
— Apr 19: Russian Government submits bill on termination of tax treaty with the Netherlands to State Duma (Tax Alert 2021-0798)
— Apr 16: Slovenia adopts amendments to the Foreigners Act (Tax Alert 2021-0789)
— Apr 16: Argentine Government issues decree on promotional regime for direct investments in certain activities (Tax Alert 2021-0787)
— Apr 16: IMF and OECD release joint report on carbon pricing (Tax Alert 2021-0786)
— Apr 16: Uganda issues Tax Amendment Bills 2021 (Tax Alert 2021-0784)
— Apr 16: OECD releases third annual peer review report and revised peer review documents on BEPS Action 6 relating to prevention of treaty abuse (Tax Alert 2021-0783)
— Apr 22: Employers may reduce their federal employment tax deposits in anticipation of COVID-related tax credits available in 2021 (Tax Alert 2021-0831)
— Apr 21: What to expect in Washington (April 21) (Tax Alert 2021-0816)
— Apr 21: Senate Finance Chairman Wyden introduces energy tax bill (Tax Alert 2021-0818)
— Apr 20: Senate Finance holds hearing on inequality in the tax code (Tax Alert 2021-0814)
— Apr 20: Tax M&A Update for March 2021 (Tax Alert 2021-0812)
— Apr 19: House Appropriations hearing on the Department of Health and Human Services FY 2022 budget request (Tax Alert 2021-0797)
— Apr 16: Proposed regulations would coordinate tax withholding and gain deferral for certain foreign persons and partnerships investing in qualified opportunity funds, clarify working capital safe harbor (Tax Alert 2021-0791)
— Apr 16: Energy and Commerce Health Subcommittee hearing on substance use and misuse in America (Tax Alert 2021-0782)
— Apr 22: Florida enacts remote seller nexus and marketplace provider provisions for sales tax, reduces commercial rent tax rate (Tax Alert 2021-0834)
— Apr 19: New York temporarily increases income tax rates on certain businesses and individuals, creates electable tax on pass-through entities, makes other tax changes (Tax Alert 2021-0806)
— Apr 19: Maryland legislature approves amendments to new sales and use tax law on digital codes and digital products (Tax Alert 2021-0805)
— Apr 19: West Virginia law eases income tax burden for employees working temporarily in the state (Tax Alert 2021-0799)
— Apr 16: Florida first-quarter 2021 SUI tax deadline extended to June 1, 2021; SUI tax rates increased for 2021 (Tax Alert 2021-0790)
— Apr 16: Maryland legislature approves bill that would move applicability date of digital advertising tax to 2022, exempt certain taxpayers from tax (Tax Alert 2021-0788)
State and Local Tax Weekly
Highlights of this edition include:
— Virginia requires unitary business groups to file corporate income tax informational report based on group's combined net income A provision of Virginia's 2021 budget bill, Section 3-5.23 of 2021 Va. HB 1800 (HB 1800), requires corporations that are members of a unitary business to file a corporate income tax informational report (based on 2019 tax year computations) using the unitary combined net income of its unitary group of which the corporations are a part.
— Income/Franchise, Sales & Use, Business Incentives, Compliance & Reporting, Controversy, Payroll & Employment Tax
IRS Weekly Wrap-Up
| ||2021-20||26 CFR 601.105: Examination of returns and claims for refund, credit, or abatement; determination of correct tax liability.|
Internal Revenue Bulletin
| ||2021-16||Internal Revenue Bulletin of April 19, 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.