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September 18, 2022
2022-1383

U.S. Tax This Week for September 16

Ernst & Young's U.S. Tax This Week newsletter for the week ending September 16 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

Chief Counsel memo clarifies process for determining assessment statute expiration date in multi-year IRC Section 332 liquidation

An IRS Chief Counsel memorandum (AM 2022-002, September 2, 2022) concludes that the IRS should not only rely on the Form 952 when determining the ASED for a multi-year IRC Section 332 liquidation, but should thoroughly review all the information filed by the parent and subsidiary to identify the tax year in which the first distribution was made. The memo was written in response to an LB&I Workflow Coordination Liaison (WCL) request about how to determine the ASED if the parent has not yet filed its return for its third tax year beginning after the end of the tax year of the first liquidating distribution. EY Tax Alert 2022-1371 has details.

Five major EU Member States commit to swift implementation of Pillar Two by any possible legal means

On 9 September, France, Germany, Italy, the Netherlands, and Spain, issued a joint statement committing to the swift implementation of Pillar Two in 2023 ''by any possible legal means.'' With the statement, five of the largest economies of the EU, have signaled their willingness to implement the global effective minimum tax unilaterally if no agreement is reached among all Member States, putting pressure on Hungary that persists in its veto. EY Tax Alert 2022-1367 has details.

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Upcoming Webcasts

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

Internal Revenue Service

— Sep 14: Notice 2022-36 provides only limited relief from information return penalties for tax years 2019 and 2020 (Tax Alert 2022-1378)

— Sep 14: IRS rules VEBA may expand membership to all former employees without negative tax consequences (Tax Alert 2022-1377)

— Sep 12: IRS rules trust's unexpected grant to charity won't adversely affect public charity status (Tax Alert 2022-1365)

International

— Sep 15: European Commission proposes Regulation introducing electricity revenue cap and solidarity contribution of fossil sector (Tax Alert 2022-1382)

— Sep 15: Taiwan relaxes requirement to submit withholding tax statement from a Foreign Institutional Investor when applying ex-post for reduced tax rate in accordance with an income tax agreement (Tax Alert 2022-1381)

— Sep 15: Visa application processing resumes at South African Missions and deadline extension for ZEP holders (Tax Alert 2022-1380)

— Sep 15: Turkey confirms non-taxable status of liaison offices that are licensed to perform regional management center activities and that do not perform any commercial activities (Tax Alert 2022-1379)

— Sep 14: Mexico’s proposed 2023 Economic Package includes minimal changes to tax law (Tax Alert 2022-1374)

— Sep 14: Poland issues draft amendments to address potential issues when applying withholding tax relief at source based on management board's statement (Tax Alert 2022-1373)

— Sep 14: EU considers electricity revenue cap and windfall tax as part of emergency package (Tax Alert 2022-1372)

— Sep 13: Portugal introduces new visas for job seekers and remote workers and updates existing immigration rules (Tax Alert 2022-1369)

— Sep 13: United States | Substantial retrogression in the employment-based second preference category for Indian-born green card applicants (Tax Alert 2022-1368)

— Sep 13: Poland proposes additional changes to shifted profits tax (Tax Alert 2022-1366)

— Sep 12: Kenya High Court holds that administration and enforcement of betting tax should be in accordance with the Tax Procedures Act (Tax Alert 2022-1363)

— Sep 12: Peruvian Government sends MLI to Congress for approval (Tax Alert 2022-1362)

— Sep 09: UAE Federal Tax Authority publishes Public Clarification on financial guarantee calculation for excise tax designated zones (Tax Alert 2022-1359)

— Sep 09: Ireland publishes updated guidance on tax deductibility of Digital Services Taxes (Tax Alert 2022-1357)

Legislation

— Sep 14: What to expect in Washington (September 14) (Tax Alert 2022-1375)

States

— Sep 13: Oregon paid family and leave insurance contribution limits effective January 1, 2023 (Tax Alert 2022-1370)

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Recent Newsletters

State and Local Tax Weekly

   Highlights of this edition include:

— New law modifies New York City's economic nexus provisions, moves forward effective date of its elective pass-through entity tax On Aug. 31, 2022, New York Governor Kathy Hochul signed into law A.10506/ S.9454 (the Act), which amends the New York City (NYC) administrative tax code by expanding NYC's economic nexus rules. Among other business tax changes, the Act also allows taxpayers to elect the NYC pass-through entity (PTE) tax, starting in 202

—  Income/Franchise, Sales & Use, Business Incentives, Property Tax, Controversy, Payroll & Employment Tax, Miscellaneous Tax, Unclaimed Property, Value Added Tax, Unclaimed Property

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IRS Weekly Wrap-Up

Final Regulations

 TD 9964Disclosure of Information to State Officials Regarding Tax-Exempt Organizations; Correction

Proposed Regulations

 REG–125693–19Resolution of Federal Tax Controversies by the Independent Office of Appeals

Revenue Procedures

 2022-36Examination of returns and claims for refund, credit or abatement; determination of tax liability

Notices

 2022-39Alternative Fuel Claims for First, Second, and Third Calendar Quarters of 2022; Alternative Fuel Mixture Claims for First and Second Calendar Quarters of 2022

Internal Revenue Bulletin

 2022-38Internal Revenue Bulletin of September 19, 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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