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June 13, 2021

U.S. Tax This Week for June 11

Ernst & Young's U.S. Tax This Week newsletter for the week ending June 11 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

Biden Administration's budget and Green Book proposals address partnership issues relevant to alternative asset management funds and energy operating partnerships

The Biden Administration's FY2022 budget and Treasury Green Book propose several changes to rules affecting partnerships such as private equity funds, alternative asset management funds (e.g., hedge, debt and real estate funds) and energy operating partnerships, including: (i) Taxing carried interest as ordinary income; (ii) Eliminating the exemption for fossil fuel publicly traded partnerships (PTPs); (iii) Expanding the application of employment taxes to income of certain limited partners; and (iv) Making push-out adjustments under the centralized audit regime refundable. EY Tax Alert 2021-1151 has details.

G7 Finance Ministers express strong support for global tax changes under BEPS 2.0

On 4-5 June 2021, the Finance Ministers and Central Bank Governors of the G7 countries met in London under the UK Presidency of the G7. A communiqué on key topics discussed at the meeting was issued at the meeting's conclusion. On the G20/OECD Inclusive Framework project on addressing the tax challenges of the digitalization of the economy (the BEPS2.0 project), the communiqué provides an expression of strong support for the ongoing work. It also includes information regarding the G7 Finance Ministers' perspectives on some key parameters of the new rules being developed in the BEPS 2.0 project. EY Tax Alert 2021-1131 has details.

Upcoming Webcasts

Telework and other employer challenges in 2021 and beyond (June 17)
During this Thought Center Webcast, Ernst & Young professionals will bring together their insights and experience to discuss how COVID-19 impacts continue to challenge employers, particularly around the demand for telework arrangements after state and local mandatory work-from-home orders have expired.

Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments (June 18)
During this Thought Center Webcast, Ernst & Young professionals will provide updates on: (i) the US economy and tax policy; (ii) breaking developments; and (iii) what’s happening at the IRS.

Accounting for income taxes: A quarterly perspective (June 22)
During this Thought Center Webcast, Ernst & Young professionals will discuss ongoing issues and regulatory trends in the tax accounting arena. Topics will include recent tax legislation with tax accounting implications and a review of current income tax accounting concepts.

The indirect tax technology journey: Now. Next. Beyond. (June 23)
During this Thought Center Webcast, Ernst & Young professionals will share insights into how market-leading organizations are using technology to adapt to new legislation and market trends, and to effectively transform tax operations.

President Biden’s executive order on supply chains (June 30)
In response to President Biden’s recent executive order, various US government agencies have submitted recommendations on how to strengthen the US supply chain to assure continuous production of critical goods. During this Thought Center Webcast, Ernst & Young professionals will focus on the agencies’ findings and their effects on multinational corporations’ supply chains.

Recent Tax Alerts

Internal Revenue Service

— Jun 10: IRS announces plans to amend final base erosion anti-abuse tax (BEAT) regulations (Tax Alert 2021-1157)

— Jun 10: IRS finalizes regulations on mandatory 60-day postponement of certain tax-related deadlines due to federally declared disaster (Tax Alert 2021-1153)

— Jun 08: QUEST Economic Update highlights key US and global economic trends — June 8, 2021 (Tax Alert 2021-1144)


— Jun 10: PE Watch | Latest developments and trends, June 2021 (Tax Alert 2021-1155)

— Jun 10: UAE amends VAT penalty rules (Tax Alert 2021-1152)

— Jun 09: Canada Revenue Agency releases revised Information Circular on Mutual Agreement Procedures (Tax Alert 2021-1148)

— Jun 08: USCIS temporarily suspends biometrics requirement for L-2 and H-4 applicants (Tax Alert 2021-1140)

— Jun 08: French Government issues draft Amending Finance Bill for 2021 (Tax Alert 2021-1139)

— Jun 07: Romania amends MDR legislation (Tax Alert 2021-1136)

— Jun 07: G7 Finance Ministers express strong support for global tax changes under BEPS 2.0 (Tax Alert 2021-1131)

— Jun 04: UK to begin accession process to join Trans-Pacific Partnership (Tax Alert 2021-1125)

— Jun 04: The Netherlands and Cyprus sign double tax treaty (Tax Alert 2021-1123)

— Jun 04: Cyprus announces extension of the non-application of administrative fines for DAC6 submissions until 30 September 2021 and an update to the Cypriot XML schema (Tax Alert 2021-1122)

— Jun 04: Argentine Senate approves tax reform bill that would raise corporate income tax rates (Tax Alert 2021-1119)

— Jun 04: USTR announces 25% punitive tariffs on six specific countries in response to their Digital Services Taxes; Suspends tariffs for 180 days (Tax Alert 2021-1116)

— Jun 03: Changes to immigration rules designed to restrict entry of foreigners into Vietnam and manage spread of COVID-19 discussed (Tax Alert 2021-1109)

— Jun 04: Denmark passes bill on CFC taxation (Tax Alert 2021-1107)

— Jun 04: Taiwan proposes amendments to domestic regulations governing application of tax treaties (Tax Alert 2021-1106)

— Jun 04: OECD releases fifth batch of Stage 2 peer review reports on dispute resolution (Tax Alert 2021-1105)


— Jun 09: Biden Administration's budget and Green Book proposals address partnership issues relevant to alternative asset management funds and energy operating partnerships (Tax Alert 2021-1151)

— Jun 09: What to expect in Washington (June 9) (Tax Alert 2021-1146)

— Jun 08: Senate Finance Committee IRS hearing focuses on tax gap (Tax Alert 2021-1142)

— Jun 08: President's FY2022 Budget contains $363 billion in green energy tax incentives (Tax Alert 2021-1141)

— Jun 07: Biden Administration proposes to increase individual income tax rates, expand application of employment tax and radically change the taxation of capital income (Tax Alert 2021-1129)

— Jun 04: Expansion of low income housing tax credit, new neighborhood homes investment credit included in Biden Administration's FY2022 budget (Tax Alert 2021-1128)

— Jun 04: Restoration of full production and investment tax credits, new credits for electricity transmission investments, nuclear energy generation included in Biden Administration's FY2020 budget (Tax Alert 2021-1127)

— Jun 04: Biden Administration would expand carbon oxide sequestration credit (Tax Alert 2021-1126)

— Jun 04: Biden Administration's budget and Green Book focuses on increased tax compliance and enforcement measures (Tax Alert 2021-1121)

— Jun 04: Biden Administration's proposals would expand and enhance qualifying advanced energy manufacturing credit (Tax Alert 2021-1118)

— Jun 03: Biden's FY2022 budget proposes making new markets tax credit permanent (Tax Alert 2021-1108)


— Jun 10: Illinois legislature approves significant tax changes affecting bonus depreciation, dividends, GILTI and net loss deductions (Tax Alert 2021-1154)

— Jun 09: South Carolina enacts electable entity-level tax on pass-throughs (Tax Alert 2021-1150)

— Jun 09: Many employers face higher state unemployment insurance tax costs due to COVID-19 (Tax Alert 2021-1149)

— Jun 08: Combined reporting initiative for New Jersey's Corporation Business Tax begins June 15, 2021 (Tax Alert 2021-1143)

— Jun 04: Oklahoma reduces tax rates for corporations, individuals, pass-through entities and banks (Tax Alert 2021-1120)

— Jun 04: Many states to resume including regular COVID-19 unemployment insurance benefits in the computation of employer's SUI tax rates (Tax Alert 2021-1117)

Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

Missouri legislature approves marketplace facilitator and remote seller nexus rules. The Missouri General Assembly approved Senate Bill 153 (MO SB 153), which would establish marketplace facilitator and remote seller nexus rules for purposes of the state's sales and use taxes effective Jan. 1, 2023.

— Income/Franchise, Sales & Use, Business Incentives, Property Tax, Controversy, Payroll & Employment Tax, Miscellaneous Tax, Global Trade, Value Added Tax, Upcoming Webcasts

ITS/Washington Dispatch
   Highlights of this edition include:


— Treasury Green Book offers new details on international tax proposals
— Senate hearing discusses Biden Administration’s international tax proposals
— House bill would require SEC regulations on CbC financial information disclosure, including taxes

IRS news

— President Biden proposes increased IRS budget to improve tax compliance
— IRS modifies guidance on accounting method changes for certain foreign corporations
— IRS official comments on treaty derivative benefits post-Brexit
— Government releases early drafts of 2021 Schedules K-2 and K-3 for Forms 1065, 1120-S and 8865

Transfer pricing

— PR Treasury issues guidance for complying with the requirement to submit a transfer pricing study

OECD developments

— OECD reviewing options to roll back unilateral digital taxes
— Parties to OECD MLI release interpretative opinion

IRS Weekly Wrap-Up

Final Regulations

 TD 9950Mandatory 60-Day Postponement of Certain Tax-Related Deadlines by Reason of a Federally Declared Disaster

Revenue Rulings

 2021-10Section 6621.—Determination of Rate of Interest


 2021-10Qualified Opportunity Zone Boundaries Unaffected by 2020 Decennial Census Changes


 2021-36Section 59A Qualified Derivative Payments Reporting Requirements

Internal Revenue Bulletin

 2021-23Internal Revenue Bulletin of June 7, 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.