May 8, 2022
U.S. Tax This Week for May 6
Ernst & Young's U.S. Tax This Week newsletter for the week ending May 6 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 regulations address TCJA changes to basic exclusion amount for estate and gift tax
The IRS has issued proposed regulations (REG-118913-21) amending estate tax regulations on the basic exclusion amount (BEA) used in computing federal estate and gift taxes. The proposed regulations would affect estates of decedents dying after 2017 and before the BEA decreases (presumably in 2026). The Tax Cuts and Jobs Act of 2017 (TCJA) increased the BEA from $5m, adjusted for inflation after 2011, to $10m for decedents dying and gifts made in calendar years 2018–2025; under the current law, the BEA will revert to $5m, adjusted for inflation, on January 1, 2026. EY Tax Alert 2022-0718 has details.
US Department of Homeland Security issues rule to increase automatic extension of work authorization for certain applicants with pending renewals
Effective May 4, certain applicants with requests to renew their Employment Authorization Documents (EAD) currently pending with US Citizenship and Immigration Services (USCIS) will receive an increased extension of work authorization from 180 days to 540 days beyond the expiration of their EAD. This temporary measure is intended to address current USCIS processing backlogs and delays of EAD applications. It is also intended to prevent gaps in employment while these applicants await adjudication of their EAD renewal requests. EY Tax Alert 2022-0721 has details.
International tax talk (May 10)
During this EY Webcast, Ernst & Young professionals will address how the FTC regulations are expected to impact the ability of US MNEs to claim credits in the United States. At a high level, the webcast will also consider the interplay between the US FTC regulations, US policy perspectives and implementation of the Organisation for Economic Co-operation and Development’s BEPS 2.0 initiative.
How MNEs can adapt to TP developments in financial transactions and related controversy (May 11)
During this EY Webcast, a global panel of EY transfer pricing leaders will discuss key trends in Asia-Pacific and in Europe in the area of transfer pricing financial transactions that are shaping the future cross-border controversy landscape.
What companies should know about the latest BEPS 2.0 dynamics (May 12)
During this EY Webcast, Ernst & Young professionals will provide an update on the latest developments and address key practical questions related to Pillar One and Pillar Two that are important in preparing for the “new normal” in this evolving global legislative landscape.
Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments (May 13)
During this EY 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. Panelists will provide updates on: (i) the US economy and tax policy; (ii) breaking developments; and (iii) what’s happening at the IRS.
Work reimagined: How to prepare for ‘renaissance and recommitment’ (May 17)
During this EY Webcast, Ernst & Young professionals will explore the results of the newly released EY 2022 Work Reimagined Survey, which included more than 17,000 employees and 1,500 employers across 22 countries.
Private equity and private capital quarterly tax webcast (May 17)
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.
How to realize the full potential of your tax and finance function (May 23)
During this EY Webcast, Ernst & Young professionals will discuss recent tax industry trends and the outlook for changes relevant to financial services tax companies.
BorderCrossings (May 25)
During this EY Webcast, Ernst & Young professionals will discuss issues arising from transactions and global economic developments impacting domestic transfer pricing (TP). Panelists will also review the latest state tax administrative approaches to resolving TP disputes, such as state advanced pricing agreement initiatives, as well as recent case law and legislative proposals – highlighting controversy considerations for multicorporate businesses.
The indirect tax technology journey: Now. Next. Beyond. (June 9)
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. This webcast will focus on leading practices for global indirect tax technology selection and implementation.
Recent Tax Alerts
Internal Revenue Service
— May 04: Proposed regulations address TCJA changes to basic exclusion amount for estate and gift tax (Tax Alert 2022-0718)
— May 03: IRS releases Health Savings Account limits for 2023 (Tax Alert 2022-0711)
— Apr 29: IRS releases 2022 inflation adjustments for renewable energy production tax credits (Tax Alert 2022-0699)
— May 04: Brazil allows taxpayers to settle certain debts from the tax regime preceding Law No. 12,973/2014 (Tax Alert 2022-0719)
— May 03: Highlights provided from Canada Revenue Agency's 2020 Mutual Agreement Procedure Report (Tax Alert 2022-0712)
— May 03: UK Tax Authority updates Plastic Packaging Tax Guidance (Tax Alert 2022-0710)
— May 02: New enforcement guidelines from Cayman Islands detail circumstances under which financial institutions could face penalties for failing to comply with Common Reporting Standard (Tax Alert 2022-0709)
— May 02: Denmark introduces new filing requirements for transfer pricing documentation (Tax Alert 2022-0707)
— Apr 29: Brazil increases social contribution on net profits rate for financial institutions and insurance companies (Tax Alert 2022-0701)
— Apr 29: OECD holds public consultation meeting on Implementation Framework for Pillar Two GloBE Rules (Tax Alert 2022-0696)
— Apr 29: UAE Ministry of Finance releases consultation document on corporate tax introduction (Tax Alert 2022-0695)
— Apr 29: Ontario budget 2022-23 discussed (Tax Alert 2022-0694)
— May 06: What to expect in Washington (May 6) (Tax Alert 2022-0728)
— May 05: US Department of Homeland Security issues rule to increase automatic extension of work authorization for certain applicants with pending renewals (Tax Alert 2022-0721)
— May 04: Alabama Department of Revenue issues revised income tax withholding tables for 2022 (Tax Alert 2022-0716)
— May 02: Minnesota updates guidance on withholding state income tax from third-party sick payments (Tax Alert 2022-0708)
State and Local Tax Weekly
Highlights of this edition include:
— Kansas, Mississippi, Virginia and New York City enact elective pass-through entity taxes. The 2017 federal Tax Cuts and Jobs Act imposed a $10,000 annual limitation on the amount of state and local taxes (SALT) individuals can deduct in computing federal income taxes. As a workaround to this limitation, which is imposed by IRC § 164(b)(6), states have enacted new elective pass-through entity (PTE) level taxes.
— Income/Franchise, Sales & Use, Business Incentives, Property Tax, Controversy, Payroll & Employment Tax, Miscellaneous Tax, Unclaimed Property
IRS Weekly Wrap-Up
| ||REG-122770-18||Use of Actuarial Tables in Valuing Annuities, Interests for Life or a Term of Years, and Remainder or Reversionary Interests|
| ||2022-23||Proposed Amendments to the Qualified Intermediary Agreement in Rev. Proc. 2017-15|
Internal Revenue Bulletin
| ||2022-19||Internal Revenue Bulletin of May 9, 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.