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June 19, 2022

U.S. Tax This Week for June 17

Ernst & Young's U.S. Tax This Week newsletter for the week ending June 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

IRS retires LB&I compliance campaign for Form 3520/3520-A and recalibrates position to assert only one penalty for failure to timely report foreign trust ownership

On its website, the IRS has announced that it has retired its Form 3520/3520A compliance campaign. In welcome relief for taxpayers, the IRS also indicates in updated IRM procedures that it will assert only one penalty — rather than the two that may be assessed under IRC Section 6677(b) — against US citizens and resident individuals who own foreign grantor trusts and fail to timely and accurately report their ownership, as required by IRC Section 6048(b), on both the Form 3520-A, Annual Information Return of Foreign Trust with U.S. Owner, and Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, Part II. EY Tax Alert 2022-0934 has details.

European Parliament rejects carbon legislation package, including more ambitious rules for EU Emission Trading System and new EU Carbon Border Adjustment Mechanism

On 8 June 2022, the European Parliament (EP) voted to reject the package of carbon legislation, including revision of the European Union (EU) Emission Trading System (EU ETS), the new Carbon Border Adjustment Mechanism (CBAM) and the Climate Social Fund. One key item of dispute was the phase-out plan for free allowances for CO2 emissions which are granted to certain industries in the EU as part of the revised EU ETS regulations. EY Tax Alert 2022-0921 has details.

Upcoming Webcasts

What to know about the growing global demands for tax governance (June 20)
During this EY Webcast, Ernst & Young professionals will discuss the growing need for companies to demonstrate higher levels of tax governance.

Accounting for income taxes: A quarterly perspective (June 21)
During this EY Webcast, Ernst & Young professionals will address developments and issues in accounting for income taxes.

How to navigate global TP controversy in life sciences — US focus (June 22)
During this EY Webcast, Ernst & Young professionals will explore life sciences transfer pricing controversy trends and developments in the US. Our team of life sciences and transfer pricing specialists will discuss and share their perspectives on emerging trends and hot topics relevant to this market.

BorderCrossings (June 30)
During this EY Webcast, Ernst & Young professionals will discuss the current scope and framework of the Pillar One and Pillar Two proposals, the impact on multinationals, a US legislative update on related matters, and next steps.

Recent Tax Alerts

Internal Revenue Service

— Jun 10: IRS raises mileage rates effective July 1, 2022 (Tax Alert 2022-0914)


— Jun 16: Argentine Government proposes windfall corporate income tax (Tax Alert 2022-0935)

— Jun 15: European Court of Justice rules on use of statistical data for determination of customs value (Tax Alert 2022-0933)

— Jun 14: US lifts pre-departure COVID-19 testing requirement (Tax Alert 2022-0923)

— Jun 13: China no longer requires PU letters for foreign assignees and their family members traveling to Shanghai (Tax Alert 2022-0920)

— Jun 13: French Tax Administration encourages taxable persons to carry out VAT voluntary disclosure with respect to Intra-Community distance sales of goods (Tax Alert 2022-0917)

— Jun 13: Argentine Central Bank exempts certain individuals and legal entities from foreign exchange controls on exports of services (Tax Alert 2022-0915)

— Jun 10: Turkiye introduces Istanbul Finance Center (Tax Alert 2022-0904)

— Jun 10: Luxembourg Tax Authority issues guidance on defensive measure related to EU-listed non-cooperative jurisdictions (Tax Alert 2022-0903)


— Jun 17: What to expect in Washington (June 17) (Tax Alert 2022-0941)

— Jun 16: Senate Finance subcommittee holds supply chain hearing (Tax Alert 2022-0936)

— Jun 15: Senate HELP Committee approves retirement bill (Tax Alert 2022-0931)


— Jun 14: Puerto Rico first-quarter 2022 SUI tax return deadline extended until June 30, 2022 (Tax Alert 2022-0924)

— Jun 13: Massachusetts high court holds commonwealth lacked statutory authority to tax out-of-state taxpayer's capital gains from sale of in-state partnership interests (Tax Alert 2022-0922)

IRS Weekly Wrap-Up

Revenue Rulings

 2022-12Section 1274.—Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property

Internal Revenue Bulletin

 2022-25Internal Revenue Bulletin of June 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.