March 20, 2022
U.S. Tax This Week for March 18
Ernst & Young's U.S. Tax This Week newsletter for the week ending March 18 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
US takes more trade actions against Russia
On March 11, 2022, President Joseph Biden issued an Executive Order (EO) on Prohibiting Certain Imports, Exports, and New Investment with Respect to Continued Russian Federation Aggression. In conjunction with this EO, the White House also released a Fact Sheet that announced coordinated actions with the European Union (EU) and the Group of 7 nations (G7) that would revoke Russia's most-favored nation (MFN) trade status and deny it borrowing privileges at multilateral financial institutions. The revocation of Russia's MFN benefits under the World Trade Organization (WTO) framework requires Congressional action, specifically directed towards revoking Permanent Normal Trade Relations (PNTR) for Russia. EY Tax Alert 2022-0436 has details.
IRS and Treasury announce they will address large backlog of unprocessed returns by hiring and shifting staff, automating processing
The Treasury Department and the IRS announced on March 10, 2022, that they are addressing the backlog of unprocessed returns by hiring thousands of new employees, creating a new "surge team" to handle paper returns and increasing automated processing. EY Tax Alert 2022-0416 has details.
EY Guides and Publications
How BEPS 2.0 could impact the alternative investment fund (AIF) industry
The Organisation for Economic Co-operation and Development/G20 Inclusive Framework on BEPS 2.0 project continues to move forward. An article outlines the potential implications of these rules for asset managers and their portfolio companies.
Accounting for income taxes: A quarterly perspective (March 22)
During this EY Webcast, Ernst & Young professionals 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.
BEPS 2.0: Implications of Pillar Two for businesses (March 22)
During this EY Webcast, Ernst & Young professionals will walk through practical examples illustrating the potential effects of core elements of the Model Rules. They also will provide an update on ongoing technical developments in the Inclusive Framework and share perspectives on the plans of some key jurisdictions for moving forward with the global minimum tax.
Transparency in the sharing economy: What to know about DAC7 and beyond (March 24)
During this EY Webcast, Ernst & Young professionals will discuss the global adoption of tax reporting rules for digital platforms, including OECD’s Model Rules, EU’s tax automatic exchange of information directive known as DAC7 and the UK’s hybrid implementation.
17th Annual International Tax Quantitative and Reporting Conference (March 28 & 29)
The 17th Annual International Tax Quantitative and Reporting Conference will continue to explore in detail the considerations associated with international tax reporting and quantitative analysis related to today’s ever-changing environment, including US legislative developments, international initiatives and regulatory changes. Key topics will include the recently released foreign tax credit regulations, BEPS, the Build Back Better Act (and potential subsequent legislation) and significant changes to US international reporting requirements for 2021 tax years. Register here.
US corporate income tax compliance - Tax year 2021 readiness and preparing your tax function for what’s next (April 6)
During this EY Webcast, Ernst & Young professionals will discuss preparing for 2021 US federal and state tax filings as well as key considerations for international filers.
Recent Tax Alerts
Internal Revenue Service
— Mar 14: IRS temporarily suspends prototype IRA opinion letter program (Tax Alert 2022-0418)
— Mar 14: IRS TE/GE publishes three new Technical Guides on religious entities, self-dealing taxes, and taxable expenditure excise taxes (Tax Alert 2022-0417)
— Mar 17: Australia's flexible work visa options support economic recovery (Tax Alert 2022-0439)
— Mar 17: Brazil reduces financial transaction tax on foreign exchange settlements (Tax Alert 2022-0434)
— Mar 17: EU Finance Ministers reach agreement on EU Carbon Border Adjustment Mechanism (Tax Alert 2022-0433)
— Mar 16: EU Finance Ministers express broad support for compromise text for Pillar Two Directive which includes one-year delay of implementation timeline, but no unanimous agreement yet (Tax Alert 2022-0430)
— Mar 16: European Commission unveils latest plan regarding fast tracking of renewables, hydrogen and biomethane to replace gas imports from Russia to the EU (Tax Alert 2022-0429)
— Mar 16: The Latest on BEPS and Beyond | March 2022 edition (Tax Alert 2022-0427)
— Mar 15: Argentina announces three-year residence permits to Ukrainian citizens (Tax Alert 2022-0425)
— Mar 15: Singapore introduces new points-based COMPASS immigration framework (Tax Alert 2022-0424)
— Mar 15: Peruvian Tax Court concludes loan proceeds qualify as a payment of services (Tax Alert 2022-0423)
— Mar 14: Peruvian Tax Court addresses how to determine if payments to foreign entities qualify as payments for digital services (Tax Alert 2022-0422)
— Mar 14: Costa Rica enacts law simplifying tax obligations for inactive entities and extending due date for simplified income tax return (Tax Alert 2022-0419)
— Mar 11: Ecuadorian President proposes bill to attract new investments (Tax Alert 2022-0412)
— Mar 17: Senate Finance holds charitable/nonprofit hearing (Tax Alert 2022-0438)
— Mar 17: Senate Finance Committee hearing on prescription drug price inflation | An urgent need to lower drug prices in Medicare (Tax Alert 2022-0437)
— Mar 16: What to expect in Washington (March 16) (Tax Alert 2022-0428)
— Mar 16: Texas mailed wrong insert with the 2022 SUI tax rate notices; 2022 SUI tax rate factors unchanged from 2021 (Tax Alert 2022-0432)
— Mar 11: Colorado proposes law that would penalize "frivolous" claims for sales-and-use-tax refunds (Tax Alert 2022-0413)
State and Local Tax Weekly
Highlights of this edition include:
— New Mexico governor signs various tax bills into law, reduces the state's gross receipts tax rate; establishes an elective pass-through entity tax On March 8, 2022, New Mexico Governor Michelle Lujan Grisham signed a suite of tax bills that reduces the state's gross receipts tax rate, establishes an elective pass-through entity tax, extends selected credits and provides for certain gross receipts tax deductions and individual tax credits.
— 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 9960||Guidance Under Section 958 on Determining Stock Ownership; Correction|
| ||REG–114209–21||User Fees Relating to Enrolled Agents and Enrolled Retirement Plan Agents; Correction|
| ||2022-17||Examination of returns and claims for refund, credit, or abatement; determination of correct tax liability.|
| ||2022-08||Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property|
| ||2022-13||Relief from Addition to Tax for Underpayment of Estimated Income Tax by Individual Farmers and Fishermen|
Internal Revenue Bulletin
| ||2022-12||Internal Revenue Bulletin of March 21, 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.