October 24, 2021
U.S. Tax This Week for October 22
Ernst & Young's U.S. Tax This Week newsletter for the week ending October 22 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
Proposed tax changes in House Ways and Means Committee reconciliation bill could affect banking & capital markets companies
Proposed tax increases on corporations and high-income individuals, which were included in the budget reconciliation bill (the HW&M Proposal) passed by the House Ways and Means Committee on September 15, 2021, could affect the banking and capital markets (BCM) industry. Proposed increases to the federal corporate income tax rate and significant changes to US international tax rules would directly affect BCM companies and their clients. Increased taxes on high-income individuals, as well as changes to the estate tax and rules for various retirement plans, would primarily affect the clients of BCM companies. Proposed enhancements to tax-advantaged investing programs would create additional opportunities for BC&M companies, whether in the roles of financing, structuring and supporting these programs, or by acting as a tax equity investor. EY Tax Alert 2021-1917 has details.
IRS TE/GE division releases FY 2022 Program Letter listing priorities, including hiring and enforcement The IRS Tax Exempt & Government Entities (TE/GE) division's Fiscal Year 2022 Program Letter lists current TE/GE priorities organized under the six IRS Strategic Goals. In their introduction to the FY22 Program Letter, TE/GE Commissioner Sunita Lough and Deputy Commissioner Edward Killen note that, following approximately 10 years of decline in the size of their workforce, FY22 "will be a year of significant growth, with most new hires assigned to enforcement duties." The year ahead will also include TE/GE outreach to stakeholders and the launch of new electronic forms and services, the commissioners state. Enforcement will be used "to ensure that those who take advantage of the exempt sector to enrich themselves are held accountable." EY Tax Alert 2021-1916 has details.
BEPS 2.0: Beyond 2021 (October 28)
During this EY Webcast, Ernst & Young professionals discuss BEPS 2.0 and taxation of the digitalized economy updates after the October OECD/G20 Inclusive Framework meeting and the G20 Finance Ministers and Central Bank Governors meeting.
BorderCrossings . . . With EY transfer pricing and tax professionals (October 28)
During this EY Webcast, Ernst & Young professionals will discuss frameworks for assessing and inventorying customer-related data and valuing them across a spectrum of business models (i.e., data-enabled and data-enhanced models). We will also examine fair market valuations of data and cybersecurity from a transfer pricing perspective.
The indirect tax technology journey: Now. Next. Beyond (November 3)
During this EY 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.
Recent Tax Alerts
Internal Revenue Service
— Oct 21: IRS TE/GE division releases FY 2022 Program Letter listing priorities, including hiring and enforcement (Tax Alert 2021-1916)
— Oct 21: IRS establishes standards for LLCs to receive exemption under IRC Section 501(c)(3) (Tax Alert 2021-1914)
— Oct 19: Partner who failed to challenge IRS assessment earlier is prohibited from challenging tax liabilities now, Tax Court concludes (Tax Alert 2021-1902)
— Oct 19: IRS rules cost of removal is not protected by normalization, salvage value is (Tax Alert 2021-1901)
— Oct 19: Solar facility selling electricity at market rates is not public utility property (Tax Alert 2021-1898)
— Oct 18: Proposed federal bills would reinstate, expand and increase superfund excise taxes as soon as January 1, 2022 (Tax Alert 2021-1896)
— Oct 18: IRS rules gains and losses arising from commodity hedges may be sourced by reference to the underlying hedged inventory property (Tax Alert 2021-1893)
— Oct 15: IRS again delays applicability dates for foreign currency guidance (Tax Alert 2021-1886)
— Oct 15: IRS publishes Chief Counsel memorandum to clarify requirements for making a research credit claim for refund (Tax Alert 2021-1884)
— Oct 15: IRS updates procedures for certain FAQs on newly enacted tax laws, clarifies penalty protection provided by good-faith reliance on FAQs (Tax Alert 2021-1883)
— Oct 21: Italy issues draft legislation for new patent box regime (Tax Alert 2021-1911)
— Oct 20: Double tax treaty concluded between Colombia and Italy will be effective January 1, 2022 (Tax Alert 2021-1910)
— Oct 20: Nigeria's Minister of Finance approves Tax Appeal Tribunal (Procedure) Rules, 2021 (Tax Alert 2021-1908)
— Oct 20: Dominican Republic issues regulations on country-by-country reporting (Tax Alert 2021-1907)
— Oct 20: Hong Kong reiterates its commitment to BEPS 2.0 project (Tax Alert 2021-1905)
— Oct 20: The Latest on BEPS and Beyond | October 2021 edition (Tax Alert 2021-1900)
— Oct 19: Uganda’s Value Added Tax (Designation of Withholding Agents) Notice 2020 has implications for newly announced agents (Tax Alert 2021-1895)
— Oct 18: Thailand announces new, more lenient quarantine rules for travelers (Tax Alert 2021-1892)
— Oct 18: United Kingdom's Migration Advisory Committee publishes report on Intra Company Transfer route (Tax Alert 2021-1891)
— Oct 15: Malaysia announces multiple immigration policy changes (Tax Alert 2021-1885)
— Oct 15: Mainland China launches nationwide inspection of High and New Technology Enterprises (Tax Alert 2021-1881)
— Oct 15: Mainland China releases master plan for developing Guangdong-Macao In-depth Cooperation Zone (Tax Alert 2021-1880)
— Oct 15: G20 Finance Ministers endorse 8 October BEPS 2.0 statement and call for swift implementation to secure entry into effect in 2023 (Tax Alert 2021-1877)
— Oct 21: Proposed tax changes in House Ways and Means Committee reconciliation bill could affect banking & capital markets companies (Tax Alert 2021-1917)
— Oct 21: Senate Finance Committee hearing on health insurance coverage (Tax Alert 2021-1912)
— Oct 20: What to expect in Washington (October 20) (Tax Alert 2021-1906)
— Oct 20: US announces global vaccination status protocol coming into effect November 8 (Tax Alert 2021-1903)
— Oct 20: New Jersey calendar year 2022 SUI, TDI and FLI taxable wage bases to increase; fiscal year 2022 SUI tax rates increased (Tax Alert 2021-1909)
— Oct 19: Nevada SUI wage base increases in 2022; federal UI loan balance repaid avoiding FUTA credit reduction and employer interest surcharge (Tax Alert 2021-1899)
— Oct 18: District of Columbia law would increase income tax on high-wage earners starting in 2022 (Tax Alert 2021-1894)
State and Local Tax Weekly
Highlights of this edition include:
— Washington high court upholds constitutionality of the additional business and occupation tax imposed on certain financial institutions. The Washington Supreme Court (Court) reversed the trial court ruling in Washington Bankers Association1 and upheld the constitutionality of the additional 1.2% Washington business and occupation (B&O) tax rate imposed on specified financial institutions under Wash. 2019 Laws, ch. 420 (2019 Wash. Sub. HB 2167), (Ch. 420). Washington Bankers Association et al v. Washington, No. 98760-2 (Wash. S.Ct. Sept. 30, 2021).
— Income/Franchise, Sales & Use, Business Incentives, Payroll & Employment Tax, Miscellaneous Tax, Upcoming Webcasts
IRS Weekly Wrap-Up
| ||T.D. 9957||User Fee for Estate Tax Closing Letter; Correction|
| ||2021-21||Section 1274.—Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property|
| ||2021-60||Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates|
Internal Revenue Bulletin
| ||2021-43||Internal Revenue Bulletin of October 25, 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.