January 9, 2022
U.S. Tax This Week for January 7
Ernst & Young's U.S. Tax This Week newsletter for the week ending January 7 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
Congress returns as Build Back Better Act faces uncertain path following Manchin objections
The $1.7 trillion Build Back Better Act (BBBA, H.R. 5376) package of health, climate, education, low-income assistance and other provisions, paid for with international, corporate, and individual tax increases, faces an uncertain path in Congress following objections from Senator Joe Manchin (D-WV), citing the long-term budget implications of temporarily extending the Child Tax Credit (CTC) expansion and other provisions with the expectation that further extensions could be enacted in the future. "I cannot vote to continue with this piece of legislation," he said on Fox News December 19. The focus now is what provisions may be dropped to satisfy Senator Manchin, and there are other challenges to Senate passage, including state and local tax (SALT) deduction cap relief and the parliamentary process to ensure compliance with reconciliation rules. EY Tax Alert 2022-0001 has details.
IRS lists substances subject to reinstated Superfund excise tax, offers procedural guidance and suspends Notice 89-61
In Notice 2021-66 (released December 14, 2021), the IRS provided guidance on Superfund excise taxes, which are reinstated as of July 1, 2022, under the Infrastructure Investment and Jobs Act (IIJA) (see Tax Alert 2021-2059). EY Tax Alert 2022-0018 has details.
BEPS 2.0: Focus on Pillar Two (January 12)
During this EY Webcast, Ernst & Young professionals will discuss the key elements of the Pillar Two model rules, highlighting what is new with this latest release. They also will share perspectives on how the European Union and other jurisdictions plan to incorporate these model rules into domestic law.
How 2022 reporting and regulation will impact registered funds (January 12)
During this EY Webcast, Ernst & Young professionals will discuss: (i) accounting and regulatory matters; (ii) tax update; and (iii) SEC regulatory updates.
Understanding the latest FTC regulations (January 13)
During this EY Webcast, Ernst & Young professionals will have an in-depth discussion of the final regulations, including what changed compared to the proposed FTC regulations issued in 2018, what stayed the same and what actions taxpayers may want to consider.
Private Equity and Private Capital - Navigating transformative global and US legislative change (January 18)
During this EY Webcast, Ernst & Young professionals will discuss recent global private equity (PE) industry trends and the outlook for US and international legislative and regulatory changes relevant to PE and alternative funds, transactions and portfolio companies.
Supply chain and tax challenges for manufacturers in Mexico (January 19)
The global economy is undergoing significant supply chain disruption, creating new challenges for multinationals with manufacturing operations in Mexico. Mexico’s 2022 tax reform could also affect these manufacturers. As such, companies may wish to explore manufacturing alternatives in Mexico that could yield new operating and tax efficiencies. During this EY Webcast, Ernst & Young professionals will address these issues.
Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments (January 21)
During this EY Webcast, Ernst & Young panelists will provide updates on: (i) the US economy and tax policy; (ii) breaking developments; and (iii) what’s happening at the IRS.
EY Tax.Tech™ webcast series: Understanding the future of tax - - the intelligent finance and tax function (January 25)
During this EY Webcast, Ernst & Young professionals will give a view into the workings of the new intelligent finance and tax function. They’ll explore issues ranging from the operating model necessary to underpin this integrated approach to the advanced technology platform and common data framework flowing through the complete finance and tax process life cycle.
Recent Tax Alerts
Internal Revenue Service
— Jan 05: IRS lists substances subject to reinstated Superfund excise tax, offers procedural guidance and suspends Notice 89-61 (Tax Alert 2022-0018)
— Jan 06: IRS finalizes rules addressing the tax consequences of the elimination of LIBOR and other interbank offered rates (Tax Alert 2022-0009)
— Jan 04: IRS updates procedures to require electronic submission of Form 1024 exemption applications (Tax Alert 2022-0003)
— Dec 22: IRS provides new automatic method change procedures to comply with final regulations for small businesses (Tax Alert 2021-2307)
— Dec 22: EY publication highlights 2021 Q4 tax policy developments across the Americas (Tax Alert 2021-2306)
— Dec 21: EY publication highlights accounting implications of 2021 Q4 income tax developments (Tax Alert 2021-2296)
— Dec 21: Federal mileage rates and luxury vehicle limit increase for 2022 (Tax Alert 2021-2291)
— Dec 21: Tax M&A Update November 2021 (Tax Alert 2021-2289)
— Dec 20: IRS rules public utility will not violate normalization rules under the TCJA by basing amortization on a specific date (Tax Alert 2021-2280)
— Dec 20: IRS tells exempt organizations to follow Form 990-series instructions, revokes old guidance providing alternative for reporting compensation paid to management companies (Tax Alert 2021-2279)
— Dec 17: IRS rules payments to REIT for storage, wharfage and pipeline use are rents from real property (Tax Alert 2021-2273)
— Jan 06: Peru publishes thin capitalization regulations (Tax Alert 2022-0025)
— Jan 06: Spanish Tax Authorities deny withholding tax exemption on interest payments to EU residents based on GAAR (Tax Alert 2022-0024)
— Jan 06: Singapore enacts Income Tax (Amendment) Act 2021 (Tax Alert 2022-0023)
— Jan 06: Paraguayan Tax Authority creates registry of authorized local transfer pricing professionals (Tax Alert 2022-0022)
— Jan 06: Individuals applying to obtain or renew immigration passes in Singapore must be fully vaccinated against COVID-19 as of February 2022 (Tax Alert 2022-0021)
— Jan 06: Costa Rica's Ministry of Treasury and Ministry of Foreign Trade modify the procedure that free trade zone companies must follow to sell goods to the local market (Tax Alert 2022-0020)
— Jan 05: Costa Rica's Tax Authority publishes new Income Tax Law Regulation (Tax Alert 2022-0019)
— Jan 05: US DOS announces authorization to waive in-person interview requirement for certain nonimmigrant visa applicants effective through December 31, 2022 (Tax Alert 2022-0012)
— Jan 05: UK to launch permanent, digital Right to Work checking process in April 2022 (Tax Alert 2022-0011)
— Jan 05: New US-Malta competent authority arrangement confirms meaning of 'pension fund' for tax treaty purposes (Tax Alert 2022-0010)
— Jan 04: Costa Rica's Tax Authority publishes the income tax brackets for tax year 2022 (Tax Alert 2022-0006)
— Jan 04: Peru's President enacts various tax measures (Tax Alert 2022-0005)
— Jan 03: Peru enacts law allowing the President to enact various tax measures (Tax Alert 2022-0004)
— Jan 03: Ecuador's new tax reform repeals exemption for interest paid on Government debt (Tax Alert 2022-0002)
— Dec 23: Canada's Bill C-2 receives Royal Assent; public company dividend restriction and amendment to executive compensation repayment rule introduced (Tax Alert 2021-2317)
— Jan 05: What to expect in Washington (January 5) (Tax Alert 2022-0008)
— Jan 03: Congress Returns as Build Back Better Act Faces Uncertain Path Following Manchin Objections (Tax Alert 2022-0001)
— Jan 05: Montana water's-edge election due March 31, 2022, for calendar-year taxpayers (Tax Alert 2022-0017)
— Jan 04: 2022 state income tax and supplemental withholding rates (preliminary as of January 5, 2022) (Tax Alert 2022-0007)
— Dec 23: State corporate income and franchise tax developments in the fourth quarter of 2021 (Tax Alert 2021-2315)
— Dec 23: Recent state law developments for tax-exempt organizations (Tax Alert 2021-2314)
— Dec 23: 2022 state income tax and supplemental withholding rates (preliminary as of December 22, 2021) (Tax Alert 2021-2312)
— Dec 22: 2022 state disability and paid family and medical leave insurance wage base and rates (Tax Alert 2021-2308)
— Dec 21: State minimum wage rates effective January 1, 2022 (Tax Alert 2021-2292)
— Dec 20: State Form W-2 filing due dates and electronic filing thresholds for tax year 2021 (Tax Alert 2021-2283)
State and Local Tax Weekly
Highlights of this edition include:
— Massachusetts appellate tax board finds revenue department cannot retroactively apply Wayfair. In U.S. Auto Parts Network, Inc., the Massachusetts Appellate Tax Board (MA ATB) held that the Massachusetts Department of Revenue (MA DOR) cannot retroactively apply the U.S. Supreme Court (Court) ruling in South Dakota v. Wayfair, Inc. (Wayfair),2 which, in part, overruled the Court's prior ruling in Quill, to impose use tax collection and remittance responsibility on an out-of-state corporation whose only presence in Massachusetts was derived from "cookies", "apps" and "content delivery networks" (CDNs) servers in Massachusetts.
— Income/Franchise, Sales & Use, Business Incentives, Payroll & Employment Tax, Miscellaneous Tax, Global Trade, Value Added Tax
IRS Weekly Wrap-Up
| ||TD 9959||Guidance Related to the Foreign Tax Credit; Clarification of Foreign-Derived Intangible Income|
| ||2022-08||Rulings and determination letters|
| ||2022-02||Permitted disparity in employer-provided contributions or benefits|
| ||2022-01||Instructions for Lenders and Loan Servicers Regarding Certain Discharged Student Loans|
| ||2022-04||Adjusted Applicable Dollar Amount for Fee Imposed by Sections 4375 and 4376|
| ||2022-11||26 CFR 54.9816-6T Methodology for calculating qualifying payment amount in 2022|
Internal Revenue Bulletin
| ||2021-51||Internal Revenue Bulletin of December 20, 2021|
| ||2021-52||Internal Revenue Bulletin of December 27, 2021|
| ||2022-01||Internal Revenue Bulletin of January 3, 2022|
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.