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August 22, 2021

U.S. Tax This Week for August 20

Ernst & Young's U.S. Tax This Week newsletter for the week ending August 20 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

Safe harbor will let employers exclude from income forgiven PPP loans and certain grants when determining ERC eligibility

A new IRS safe harbor (Revenue Procedure 2021-33) will allow taxpayers to exclude certain items from gross receipts under IRC Sections 448(c) and 6033, solely for determining eligibility for the employee retention credit (ERC). The excludable items are: (1) the forgiven portion of a Paycheck Protection Program (PPP) loan; (2) a shuttered venue operators grant; and (3) a restaurant revitalization grant. EY Alert 2021-1529 has details.

Tax-exempt organizations should note recent state law developments

Three recent state tax developments serve as important reminders to tax-exempt organizations: monitor state law developments regularly. EY Alert 2021-1521 has details.

Upcoming Webcasts

BorderCrossings . . . with EY transfer pricing and tax professionals (August 26)
During this EY Webcast, Ernst & Young professionals will discuss the “realistic alternatives” principle in transfer pricing. Our panelists will explore the principle’s evolution from various sources through its codification in the Tax Cuts and Jobs Act and incorporation into US tax treaties. They will also examine how recent practices reflect conflicting interpretations of this principle and why the role of realistic alternatives in transfer pricing cases is not as straightforward as it might first appear.

Domestic tax quarterly webcast series: A focus on state tax matters (September 9)
During this Thought Center Webcast, Ernst & Young professionals will provide you with information on major tax law changes in the 50 states and District of Columbia, as well as current state and local tax topics of interest.

Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments (September 10)
During this Thought Center Webcast, Ernst & Young professionals will discuss about operating the tax function in this time of National Emergency created by the COVID-19 virus.

Recent Tax Alerts

Internal Revenue Service

— Aug 16: IRS corrects opportunity zone regulations (Tax Alert 2021-1519)


— Aug 19: Uruguay's Tax Authority issues new form for the affidavit of corporate income tax, net wealth tax and corporate control tax (Tax Alert 2021-1539)

— Aug 19: Peru creates a new tax-free zone (Tax Alert 2021-1537)

— Aug 19: Peru announces new immigration policies for Resident Visa and Temporary Visa holders (Tax Alert 2021-1535)

— Aug 19: Malaysia announces multiple immigration policy changes (Tax Alert 2021-1534)

— Aug 18: Gibraltar announces increase in corporate tax rate applies to profits from 1 August 2021 (Tax Alert 2021-1533)

— Aug 18: OECD releases Latvia Stage 2 peer review report on implementation of Action 14 minimum standard (Tax Alert 2021-1530)

— Aug 16: New Indonesia–Singapore tax treaty enters into force (Tax Alert 2021-1522)

— Aug 16: Turkey publishes Ultimate Beneficial Owner Declaration Form (Tax Alert 2021-1516)

— Aug 13: QUEST Economic Update highlights key US and global economic trends — August 13, 2021 (Tax Alert 2021-1513)

— Aug 13: Colombia's highest tax court annuls official opinion that denied deductibility of interest on loans used to acquire shares (Tax Alert 2021-1512)

— Aug 13: UK issues updated Plastic Packaging Tax guidance for business (Tax Alert 2021-1511)


— Aug 19: Senate-passed infrastructure bill would impose information-reporting requirements on sales of cryptocurrency and other digital assets (Tax Alert 2021-1538)

— Aug 16: Tax-exempt organizations should note recent state law developments (Tax Alert 2021-1521)

— Aug 16: Additional information reporting required for third-party settlement organizations and third-party payment networks (Tax Alert 2021-1517)


— Aug 19: Rhode Island extends COVID-19 income tax withholding guidance for teleworkers (Tax Alert 2021-1536)

— Aug 18: Hawaii legislation lowers SUI tax rates for 2021 and 2022; COVID-19 benefits continue not to be charged to employer accounts (Tax Alert 2021-1531)

— Aug 18: Arizona joins list of states enacting an elective entity-level tax for pass-throughs (Tax Alert 2021-1528)

— Aug 17: Vermont Department of Taxes ends temporary state income tax withholding guidance for teleworkers during COVID-19 (Tax Alert 2021-1527)

Recent Newsletters

State and Local Tax Weekly

   Highlights of this edition include:

IRS provides guidance on employee retention credits for the second half of 2021 In Notice 2021-49 (Notice), the IRS explains how its previous guidance applies to employee retention credits (ERCs) as they were modified and extended to the end of 2021 by the American Rescue Plan Act of 2021 (ARPA). 

—  Income/Franchise, Sales & Use, Business Incentives, Property Tax, Controversy, Payroll & Employment Tax, Miscellaneous Tax, Unclaimed Property, Value Added Tax, Unclaimed Property

IRS Weekly Wrap-Up

Revenue Rulings

 2021-16Section 1274.—Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property


 2021-50Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

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.