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August 14, 2022
2022-1219

U.S. Tax This Week for August 12

Ernst & Young's U.S. Tax This Week newsletter for the week ending August 12 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.

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Top of the Week

Inflation Reduction Act revised to include excise tax on stock buybacks

The revised version of the Inflation Reduction Act (IRA) of 2022 (H.R. 5376) that was approved by the Senate on August 7, 2022, includes an excise tax that would impose a 1% surcharge on corporate stock buybacks. The bill is expected to be considered by the House of Representatives by the end of the week. EY Tax Alert 2022-1206 has details.

IRS issues final regulations removing signature requirement for partnership IRC Section 754 elections

On August 4, 2022, the Treasury and IRS issued final regulations (TD 9963) removing the requirement that partners sign an election under IRC Section 754 to adjust the basis of partnership property when a partnership distributes property or transfers an interest in the partnership. EY Tax Alert 2022-1205 has details.

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Upcoming Webcasts

What does the Inflation Reduction Act mean for life science companies? (August 17)
During this EY Webcast, EY policy, strategy and tax professionals will discuss the Inflation Reduction Act of 2022 that includes new policies aimed at reining in consumer drug costs that will affect pharmaceutical companies’ strategic and operational decisions now and in the long term.

Private equity and private capital — navigating transformative global and US legislative change (August 18)
During this EY Webcast, Ernst & Young professionals will discuss recent private equity and private capital industry trends and the outlook for US and international legislative and regulatory changes relevant to PE and alternative funds, transactions and portfolio companies.

Tax in the time of COVID-19: update on legislative, economic, regulatory and IRS developments (August 19)
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.

BorderCrossings (August 25)
During this EY Webcast, Ernst & Young transfer pricing and tax professionals will help you stay informed and able to adopt a more proactive stance in developing and defending your transfer pricing policies and practices.

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Recent Tax Alerts

Internal Revenue Service

— Aug 08: Sustained focus on tax-exempt hospitals emphasizes need for detailed documentation of public benefit (Tax Alert 2022-1207)

— Aug 05: IRS concludes that termination fees in failed merger were capital losses (Tax Alert 2022-1193)

International

— Aug 11: High Court of Kenya reiterates importance of submission of proper documentation during the appeal process (Tax Alert 2022-1214)

— Aug 10: Chile's Congress to discuss tax reform proposal (Tax Alert 2022-1212)

— Aug 10: Ontario re-introduces its 2022 budget bill (Tax Alert 2022-1211)

— Aug 09: Ghana to launch new e-Visa system for expedited visa application processing (Tax Alert 2022-1209)

— Aug 09: Ghana issues 2022 Mid-year Budget Review Statement (Tax Alert 2022-1203)

— Aug 08: Spain announces new Teleworking Visa and Residence Permit for remote workers (Tax Alert 2022-1202)

— Aug 08: Indian Tax Administration mandates nonresident taxpayers to furnish information electronically to avail Double Taxation Avoidance Agreements benefits (Tax Alert 2022-1199)

— Aug 05: Uruguay's tax authority clarifies tax treatment of profit repatriations paid by a permanent establishment under double tax treaty (Tax Alert 2022-1196)

— Aug 05: Ireland provides guidance on tax deductibility of Digital Services Taxes (Tax Alert 2022-1194)

— Aug 05: Australian Treasury releases Discussion Paper on new thin cap rules, royalty deduction rules and public tax disclosure rules (Tax Alert 2022-1191)

Legislation

— Aug 08: Senate approves Inflation Reduction Act including key health care provisions (Tax Alert 2022-1200)

— Aug 07: Senate approves Inflation Reduction Act (Tax Alert 2022-1198)

— Aug 07: Revised text of Inflation Reduction Act makes tax, health changes (Tax Alert 2022-1197)

States

— Aug 10: Special report on the employment tax and other payroll implications of recovering wage overpayments and advances from employees' wages now available (Tax Alert 2022-1215)

— Aug 08: New York employers will pay an interest assessment in 2022 for the state's federal UI loans (Tax Alert 2022-1204)

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Recent Newsletters

ITS/Washington Dispatch

   Highlights of this edition include:

Legislation

  • Manchin reach agreement on $740b budget reconciliation bill with 15% corporate minimum tax
  • US Congress passes Creating Helpful Incentives to Produce Semiconductors (CHIPS) bill with investment tax credits and incentives

IRS news

  • Treasury and IRS publish technical corrections to final foreign tax credit regulations
  • IRS proposed regulations would limit Section 1256 mark-to-market accounting for foreign currency contracts to foreign currency forward contracts
  • US Treasury announces termination of tax treaty with Hungary

OECD Developments

  • OECD releases Progress Report on Amount A of Pillar One of BEPS 2.0 project
  • G20 Finance Ministers reiterate commitment to BEPS 2.0 two-pillar implementation and call for action to finalize work

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IRS Weekly Wrap-Up

Final Regulations

 TD 9963Streamlining the Section 754 Election Statement

Internal Revenue Bulletin

 2022-33Internal Revenue Bulletin of August 15, 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.

 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

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