September 19, 2021
U.S. Tax This Week for September 17
Ernst & Young's U.S. Tax This Week newsletter for the week ending September 17 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
House Ways and Means Committee Chair proposes comprehensive international tax changes for reconciliation bill
In the tax portion of its budget reconciliation bill (released September 13, 2021), Chairman Neal of the House Ways and Means Committee proposed significant changes and additions to US international tax rules (the HW&M Proposal). Provisions potentially affected by the HW&M Proposal include the foreign tax credit (FTC), the global low-tax intangible income (GILTI) regime, the base erosion and anti-abuse tax (BEAT), and the interest expense limitation under Internal Revenue Code (IRC) Section 163, among others. With important exceptions, most of these changes would be effective for tax years beginning after December 31, 2021. To supplement the HW&M Proposal, the House Ways and Means Committee also released a section-by-section summary, and the Joint Committee on Taxation released a description of the proposed changes (the JCT report). EY Tax Alert 2021-9023 has details.
Ways & Means approves reconciliation tax package
The House Ways & Means Committee September 15 approved by a 24-19 vote the tax and drug pricing portion of the Build Back Better Act reconciliation bill, defeating several Republican amendments and adopting none. Rep. Stephanie Murphy (D-FL) was the only Democrat to oppose the package. There was significant debate over international tax changes, and Republican amendments sought to block the global intangible low-taxed income (GILTI) tax increase and the reduction in the foreign-derived intangible income (FDII) deduction. EY Tax Alert 2021-1678 has details.
US international tax reform: Update on recent developments (September 20)
Significant international tax changes have been proposed this year, including the Biden Administration’s Made in America Plan (as outlined in the Green Book) and a discussion draft of Senator Ron Wyden’s international tax framework, among others. Many of these changes would significantly affect the global taxation of multinational corporate groups. During this Thought Center Webcast, Ernst & Young professionals will discuss the various proposals.
Accounting for income taxes: A quarterly perspective (September 21)
During this Thought Center Webcast, Ernst & Young 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.
Implementing income recognition rules under IRC Section 451 (September 22)
The final regulations under IRC Section 451 changed many of the rules on income recognition but did not indicate how to implement all of those changes. With the recent release of Revenue Procedure 2021-34, taxpayers now have the procedural guidance needed to fully implement those regulations. During this Thought Center Webcast, Ernst & Young professionals will discuss about the immediate actions taxpayers should take for their 2020 tax returns, as well as 2021 considerations.
Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments (September 24)
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.
US Indirect Tax Controversy: Current audit trends and outlook, including ways to manage your state tax posture (September 29)
During this Thought Center Webcast, Ernst & Young professionals will discuss recent audit trends in select states, including California, New York and Texas, and possible avenues to resolve uncertain tax positions.
Recent Tax Alerts
Internal Revenue Service
— Sep 14: IRS updates requirements for reporting qualified COVID-19 paid leave benefits on Form W-2 (Tax Alert 2021-1669)
— Sep 14: IRS extends tax filing and payment deadlines until January 3, 2022, for individuals and businesses, including tax-exempt organizations, affected by Hurricane Ida (Tax Alert 2021-1667)
— Sep 10: IRS updating 'no-rule' list to include certain self-dealing transactions (Tax Alert 2021-1647)
— Sep 16: New passport requirement discussed for EU, EEA and Swiss nationals traveling to the UK as of October 1 (Tax Alert 2021-1680)
— Sep 16: Indian Tax Tribunal rules on re-domiciliation and its impact on treaty entitlement (Tax Alert 2021-1674)
— Sep 14: Authorized travelers may now enter Argentina via the province of Mendoza (Tax Alert 2021-1671)
— Sep 14: Angola announces relaxed quarantine and COVID-19 testing requirements for fully vaccinated travelers and new exit rules for Angolan citizens and residents (Tax Alert 2021-1670)
— Sep 15: Malaysia issues Pre-Budget 2022 Statement (Tax Alert 2021-1666)
— Sep 13: United Kingdom publishes roadmap for reforming its immigration sponsorship program (Tax Alert 2021-1663)
— Sep 13: China implements new, stricter immigration policies for travelers from the United States, the United Kingdom, Spain, France and Malaysia (Tax Alert 2021-1662)
— Sep 14: New Zealand proposes changes to GST invoicing requirements (Tax Alert 2021-1661)
— Sep 14: New Zealand proposes changes to Goods and Services Tax (Tax Alert 2021-1660)
— Sep 10: Mexico's President submits 2022 economic proposal to Congress (Tax Alert 2021-1643)
— Sep 10: Poland proposes new revenue-based minimum tax for corporate taxpayers (Tax Alert 2021-1639)
— Sep 10: Japan provides update on COVID-19 tax measures (Tax Alert 2021-1638)
— Sep 16: House Ways and Means Committee Chair proposes comprehensive international tax changes for reconciliation bill (Tax Alert 2021-9023)
— Sep 16: Ways & Means Committee releases reconciliation bill with tax provisions that would significantly change partnership rules (Tax Alert 2021-1681)
— Sep 16: House Energy and Commerce Committee advances Build Back Better Act proposals; drug pricing provision fails to advance (Tax Alert 2021-1679)
— Sep 15: Ways & Means approves reconciliation tax package (Tax Alert 2021-1678)
— Sep 15: Budget reconciliation bill contains many new and amended housing and energy tax credits (Tax Alert 2021-1677)
— Sep 15: Wyden's discussion draft would significantly alter partnership rules (Tax Alert 2021-1676)
— Sep 15: Ways and Means completed first day of tax markup (Tax Alert 2021-1673)
— Sep 15: What to expect in Washington (September 15) (Tax Alert 2021-1672)
— Sep 13: Ways & Means infrastructure, energy, drug pricing titles released (Tax Alert 2021-1659)
— Sep 13: House Ways & Means approves 'Build Back Better Act' proposals (Tax Alert 2021-1658)
— Sep 13: HHS Secretary Xavier Becerra releases plan for addressing high drug prices, outlining potential legislative and regulatory actions (Tax Alert 2021-1657)
— Sep 13: This Week in Health Policy for September 13 (Tax Alert 2021-1654)
— Sep 11: Ways & Means Infrastructure, Energy, Drug Pricing Titles released (Tax Alert 2021-1651)
— Sep 12: Potential Ways & Means tax increase proposals previewed (Tax Alert 2021-1649)
— Sep 10: House Energy and Commerce Committee releases fact sheet outlining health care and other reconciliation proposals (Tax Alert 2021-1642)
— Sep 10: Biden Administration releases new COVID-19 strategy focused on ramping up vaccinations, increasing access to testing and treatment, and keeping schools and economy open (Tax Alert 2021-1641)
— Sep 15: New York tax department issues guidance on new pass-through entity tax; 2021 election must be made by October 15, 2021 (Tax Alert 2021-1675)
State and Local Tax Weekly
Highlights of this edition include:
— Multistate Tax Commission approves updated statement on P.L. 86-272 to address its views on activities conducted over the internet On Aug. 4, 2021, the Multistate Tax Commission (MTC) approved the fourth revision to its Statement of Information concerning practices of the MTC and supporting states under P.L. 86-272.
— 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
| ||TD 9953||Recapture of Excess Employment Tax Credits Under the American Relief Plan Act of 2021|
| ||REG-114676-21||Requirements Related to Air Ambulance Services, Agent and Broker Disclosures, and Provider Enforcement; Proposed Rule|
| ||2021-41||Examination of returns and claims for refund, credit or abatement; determination of tax liability (Also: 842(b))|
| ||2021-34||Changes in accounting periods and in methods of accounting.(Also: Part I, Sections 446, 451, 1275; 1.451-1, 1.451-3, 1.451-8, 1.1275-2.)|
| ||2021-18||Section 1274.—Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property|
Internal Revenue Bulletin
| ||2021-38||Internal Revenue Bulletin of September 20, 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.