August 29, 2021
U.S. Tax This Week for August 27
Ernst & Young's U.S. Tax This Week newsletter for the week ending August 27 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
Sens. Wyden, Brown, Warner detail international tax framework
Senate Finance Committee Chairman Ron Wyden (D-OR) and Senators Sherrod Brown (D-OH) and Mark Warner (D-VA) August 25 detailed the international tax framework they released in April, focused on changes to the 2017 TCJA's provisions on global intangible low-taxed income (GILTI), foreign-derived intangible income (FDII), and the base erosion and anti-abuse tax (BEAT). Newly released legislative text of the framework — the April release did not include legislative language — still leaves several policy options undetermined, including the GILTI tax rate and how the BEAT might be changed to incorporate aspects of the Biden Administration's Stop Harmful Inversions and Ending Low-Tax Developments (SHIELD) proposal. Comments are requested on the draft by September 3. EY Tax Alert 2021-1563 has details.
New guidance on income recognition modifies procedures for obtaining automatic consent to change accounting methods
In Revenue Procedure 2021-34 (issued August 12, 2021), the IRS provides long-awaited guidance for taxpayers to obtain automatic consent to change accounting methods to comply with final regulations under IRC Section 451 (TD 9941; see Tax Alert 2021-0062). EY Tax Alert 2021-1572 has details.
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 have a conversation regarding operating the tax function in this time of National Emergency created by the COVID-19 virus.
Implementing income recognition rules under IRC Section 451 (September 13)
During this Thought Center Webcast, Ernst & Young professionals will discuss actions taxpayers should take for their 2020 tax returns, as well as 2021 considerations.
Accounting for income taxes: A quarterly perspective (September 21)
During this Thought Center Webcast, Ernst & Young LLP professionals, moderated by Angela Evans, Partner, Tax Accounting and Risk Advisory Services (TARAS), 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.
Recent Tax Alerts
— Aug 23: US Army veteran working as defense contractor in Afghanistan was entitled to FEI exclusion, Tax Court holds (Tax Alert 2021-1532)
— Aug 20: Tax Court rejects assertion that tax treaties allow foreign tax credits to offset US net investment income tax (Tax Alert 2021-1544)
Internal Revenue Service
— Aug 26: IRS rules payments to REIT for use of fiber optic cable capacity are 'rents from real property,' geographic operational area can be used for limited rental exception (Tax Alert 2021-1573)
— Aug 26: New guidance on income recognition modifies procedures for obtaining automatic consent to change accounting methods (Tax Alert 2021-1572)
— Aug 25: IRS FIRE System will have new online application for new users on September 26, 2021 (Tax Alert 2021-1569)
— Aug 25: LB&I accepting new applicants for 2022 CAP program (Tax Alert 2021-1566)
— Aug 25: IRS extends until January 1, 2023, the applicability date for withholding on certain transfers and distributions related to publicly traded partnership interests (Tax Alert 2021-1565)
— Aug 24: IRS changes applicability date to January 1, 2023, for certain provisions under IRC Section 1446(f) regulations on withholding on transfers of partnership interests (Tax Alert 2021-1555)
— Aug 23: Tax M& A Update for July 2021 (Tax Alert 2021-1554)
— Aug 20: Amgen intends to challenge $3.6b tax deficiency (Tax Alert 2021-1545)
— Aug 26: Dominican Republic enacts Law No. 163-21 promoting the trading of publicly-offered securities on the Dominican Republic Stock Exchange (Tax Alert 2021-1575)
— Aug 26: Social security exempt third-country nationals may now obtain German work authorization as local hire specialists and skilled workers (Tax Alert 2021-1574)
— Aug 26: Swiss authorities release statement on application of Most Favored Nation clause in India-Swiss tax treaty (Tax Alert 2021-1570)
— Aug 24: Canada's Distributed Investment Plans required to request certain investor information by October 15 (Tax Alert 2021-1558)
— Aug 24: Supreme Court of Canada rules that CCAA charges take priority (Tax Alert 2021-1557)
— Aug 23: OECD releases Colombia Stage 2 peer review report on implementation of Action 14 minimum standard (Tax Alert 2021-1551)
— Aug 23: Uruguay establishes tax incentives for investments in aeronautical infrastructure projects (Tax Alert 2021-1543)
— Aug 23: Singapore to open Vaccinated Travel Lane with Brunei and Germany; resumes issuance of entry approvals for vaccinated work pass holders (Tax Alert 2021-1542)
— Aug 20: Uruguayan Tax Authority issues procedure for recovering corporate income tax and net wealth tax payments made from January to June 2021 (Tax Alert 2021-1547)
— Aug 20: Uruguayan Tax Authority extends due date for issuers of electronic receipts to submit information on invoicing software or electronic tax receipt processes (Tax Alert 2021-1546)
— Aug 25: Sens. Wyden, Brown, Warner detail international tax framework (Tax Alert 2021-1563)
— Aug 24: Budget resolution cleared by House, paving way for reconciliation (Tax Alert 2021-1561)
— Aug 25: Nebraska temporary COVID-19 income tax withholding relief for teleworkers ended effective July 30, 2021 (Tax Alert 2021-1564)
— Aug 24: Tennessee SUI tax rates continue at lowest rate schedule for last half of 2021; employers will not be charged for COVID-19 UI benefits through July 3, 2021 (Tax Alert 2021-1559)
State and Local Tax Weekly
Highlights of this edition include:
— Pennsylvania ends COVID-19 temporary business tax nexus and income tax withholding guidance for teleworkers. The Pennsylvania Department of Revenue (PA DOR) announced that its temporary provisions governing the determination of nexus for Corporate Net Income Tax (CNIT), sales and use tax (SUT) and state income tax withholding for teleworkers during the COVID-19 emergency expires effective July 1, 2021.
— Income/Franchise, Sales & Use, Business Incentives, Compliance & Reporting, Payroll & Employment Tax, Miscellaneous Tax, Value Added Tax, Upcoming Webcasts
IRS Weekly Wrap-Up
| ||2021-17||Determination of Rate of Interest|
Internal Revenue Bulletin
| ||2021-34||Internal Revenue Bulletin of August 23, 2021|
| ||2021-35||Internal Revenue Bulletin of August 30, 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.