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September 11, 2022
2022-1355

U.S. Tax This Week for September 9

Ernst & Young's U.S. Tax This Week newsletter for the week ending September 9 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

Congress returns to pre-election session

Congress is back for a pre-election session with one must-pass item: an extension of government funding beyond September 30, likely through a continuing resolution into December. The Senate is also expected to consider energy permitting reform, possibly in conjunction with the government funding bill, and an FDA User Fee bill. With the Inflation Reduction Act's tax-climate-health bill just enacted, any additional tax legislation is expected to wait until a post-election lame-duck session toward the end of the year, when a bill addressing tax cliffs and expired/expiring provisions could be taken up, possibly in combination with a retirement security package. EY Tax Alert 2022-1348 has details.

Colorado Department of Revenue corrects placement on 2021 corporate income tax return of subtraction for retroactive CARES Act deductions

In supplemental instructions to Colorado's 2021 corporate income tax return, the Colorado Department of Revenue corrected the placement of a subtraction for certain retroactive deductions under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) deductions enacted in 2021 as part of House Bill 21-1002. EY Tax Alert 2022-1350 has details.

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EY Guides, Surveys, and Reports

EY's 2022 Worldwide Corporate Tax Guide
Governments worldwide continue to reform their tax codes at a historically rapid rate. Taxpayers need a current guide, such as EY's Worldwide Corporate Tax Guide, in such a shifting tax landscape, especially if they are contemplating new markets.

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Upcoming Webcasts

International tax talk quarterly series with the EY Global Tax Desk Network (September 13)
During this EY Webcast, Ernst & Young professionals will address significant tax developments in the APAC region.

BEPS 2.0 developments: What to watch out for in country implementation (September 15)
During this EY Webcast, Ernst & Young professionals will discuss the recent activities in the global negotiations and the emerging implementation activities in countries. The panelists will also share updates on latest developments and outlook for country implementation and discuss the current status and outlook for Pillar One and Two.

Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments (September 16)
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.

Accounting for income taxes: A quarterly perspective (September 20)
During this EY Webcast, Ernst & Young professionals moderated by Angela Evans, Partner, Tax Accounting and Risk Advisory Services (TARAS), 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.

Domestic tax quarterly webcast series: A focus on state tax matters (September 22)
During this EY Webcast, Ernst & Young professionals will discuss state and local tax disruptions in an ever-changing world. The discussion will focus on top-of-mind issues impacting state and local taxes.

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Recent Tax Alerts

Courts

— Sep 01: Sixth Circuit sides with Eaton in appeal from Tax Court regarding APA cancellation (Tax Alert 2022-1334)

— Aug 30: Court of Federal Claims rules pharmaceutical company may treat patent litigation fees as deductible expenses (Tax Alert 2022-1313)

Internal Revenue Service

— Aug 31: FASB seeking comments on proposal to allow amortization method of accounting for all tax credit investment programs if certain conditions are met (Tax Alert 2022-1318)

— Aug 30: IRS rules annuity contract fees that insurance company paid to financial advisor from policy cash values are not 'amounts received' by policy owners (Tax Alert 2022-1314)

— Aug 26: IRS gives widespread penalty relief for 2019 and 2020 returns filed by September 30, 2022, will refund penalties already paid (Tax Alert 2022-1308)

— Aug 26: IRS provides guidance for states seeking certain tax returns or return information regarding tax-exempt organizations (Tax Alert 2022-1307)

International

— May 31: EY TradeWatch | Issue 1, 2022 (Tax Alert 2022-1352)

— Sep 08: EY Canada's Tax Matters @ EY for September 2022 (Tax Alert 2022-1351)

— Sep 07: Polish Government submits amended proposal of Corporate Income Tax changes to Parliament (Tax Alert 2022-1346)

— Sep 07: Uruguay extends deadlines for filing tax returns and first installment payments for resident individuals (Tax Alert 2022-1345)

— Sep 07: Uruguay extends VAT reduction and tax credit on short-term rentals for tourism sector (Tax Alert 2022-1344)

— Sep 08: Costa Rica enacts law on tax exemption regimes that are under Treasury supervision (Tax Alert 2022-1343)

— Sep 06: Argentine tax authority suspends mandatory disclosure regime (Tax Alert 2022-1342)

— Sep 06: Singapore announces significant developments in its immigration landscape (Tax Alert 2022-1341)

— Sep 06: Cyprus Tax Authority issues notification with respect to newly introduced transfer pricing rules and documentation requirements (Tax Alert 2022-1338)

— Sep 06: New Zealand proposes various changes to tax rules around the gig and sharing economy, taxation of cross-border employees, dual corporate residency, and more (Tax Alert 2022-1337)

— Sep 06: UK announces new trading schemes to cut tariffs on goods from developing countries (Tax Alert 2022-1336)

— Sep 01: Dominican Republic's General Directorate of Internal Taxes establishes guidelines for applying mutual agreement procedure (Tax Alert 2022-1332)

— Sep 01: Costa Rica's tax authority amends resolution on common reporting standard due diligence and reporting requirements for financial institutions (Tax Alert 2022-1331)

— Sep 01: Poland proposes changes to transfer pricing regulations (Tax Alert 2022-1327)

— Sep 01: Thailand launches new 10-year Long-Term Resident Visa for working professionals and investors (Tax Alert 2022-1326)

— Aug 31: Peru enacts temporary VAT reduction for specific hotels and restaurants (Tax Alert 2022-1321)

— Aug 31: India announces new salary requirement for Employment Visa applicants (Tax Alert 2022-1320)

— Aug 31: Dominican Republic issues notice on the country-by-country report submission threshold (Tax Alert 2022-1319)

— Aug 31: New Zealand proposes various changes to Goods and Services Tax Law (Tax Alert 2022-1316)

— Aug 30: El Salvador enacts tax amnesty program (Tax Alert 2022-1312)

— Aug 30: Singapore relaxes entry requirements for Long-Term Pass, Work Permit and S Pass holders and short-term visitors (Tax Alert 2022-1311)

— Aug 26: Poland | A review of changes in the “Polish holding company regime" (Tax Alert 2022-1302)

— Aug 26: Denmark publishes draft bill introducing a cultural levy of 6% on turnover generated by Danish and EU-based digital streaming platforms and services in Denmark (Tax Alert 2022-1301)

— Aug 26: Poland plans to amend provisions implementing tax on shifted profits (Tax Alert 2022-1297)

— Aug 26: Kenya exempts foreign investors from obtaining KRA PIN under certain circumstances (Tax Alert 2022-1296)

Legislation

— Sep 07: Congress returns to pre-election session (Tax Alert 2022-1348)

States

— Sep 08: Colorado Department of Revenue corrects placement on 2021 corporate income tax return of subtraction for retroactive CARES Act deductions (Tax Alert 2022-1350)

— Sep 01: New law modifies New York City's economic nexus provisions, moves forward effective date of its elective pass-through entity tax (Tax Alert 2022-1330)

— Aug 29: Puerto Rico's Department of State extends due date to October 18, 2022, for filing annual reports for corporations requesting a second extension (Tax Alert 2022-1304)

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Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

  • Puerto Rico's Act 52 of June 30, 2022 analyzed. The Governor of Puerto Rico signed Act 52 into law on June 30, 2022 (Act 52-2022). Act 52-2022 amends various provisions of the Puerto Rico Internal Revenue Code, Puerto Rico Incentives Code and Puerto Rico Municipal Code.
  • Income/Franchise, Sales & Use, Business Incentives, Property Tax, Miscellaneous Tax, Upcoming Webcasts

ITS/Washington Dispatch
   Highlights of this edition include:

Legislation

  • President Biden signs Inflation Reduction Act with 15% corporate minimum tax
  • Congress passes $280 billion Chips and Science Act

IRS news

  • Applicability date for foreign currency regulations under Section 987 extended again
  • IRS announces delay in effective date of Section 871(m) regulations

Transfer pricing news

  • Tax Court increases Medtronic royalty rate under unspecified TP method
  • Increased IRS funding from Inflation Reduction Act may increase scrutiny of transfer pricing cases

OECD developments

  • OECD releases 2022 update on peer review of preferential tax regimes and no or only nominal tax jurisdictions

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2022-36Internal Revenue Bulletin of September 6, 2022
 2022-37Internal Revenue Bulletin of September 12, 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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