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October 16, 2022
2022-1556

U.S. Tax This Week for October 14

Ernst & Young's U.S. Tax This Week newsletter for the week ending October 14 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

New IRS guidance provides process for S corporations and QSubs to resolve certain common issues without making PLR requests

In Revenue Procedure 2022-19, the IRS provides a process through which S corporations and their shareholders may resolve certain "frequently encountered issues" without requesting a private letter ruling (PLR). EY Tax Alert 2022-1550 has details.

OECD releases report on interaction of Tax Incentives and Pillar Two

On 6 October 2022, the OECD released the report Tax Incentives and the Global Minimum Corporate Tax: Reconsidering Tax Incentives after the GloBE Rules (the Report). Prepared at the request of the Indonesian G20 Presidency, the Report identifies considerations for jurisdictions when preparing for the implementation of Pillar Two. In particular, it addresses the current use of tax incentives in developed and developing jurisdictions in the context of the GloBE Rules and describes how key provisions of these rules may impact diverse types of tax incentives differently. EY Tax Alert 2022-1543 has details.

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Upcoming Webcasts

EY Tax.Tech™ Ecosystem series: Unlocking the power of connected tax analytics (October 20)
During this EY Webcast, Ernst & Young professionals will showcase our EY Connected Tax Analytics in Power-BI, leveraging Thomson Reuters integration to supercharge and automate your corporate income tax compliance preparation and review process in ONESOURCE Income Tax. They’ll take you through the latest in use cases and preview what’s ahead.

Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments (October 21)
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.

US corporate income tax compliance: Insights from Tax Year 2021 and planning for the next age of compliance (October 26)
During this EY Webcast, Ernst & Young professionals will discuss lessons learned from this year’s dynamic compliance environment – and how to plan for the 2022 federal, international and state tax filing season – and beyond.

BorderCrossings . . . With EY transfer pricing and tax professionals (October 27)
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

— Oct 12: Final rules base eligibility for premium tax credit on cost of covering family (Tax Alert 2022-1549)

— Oct 12: Final rules modify average income test for low-income housing credits (Tax Alert 2022-1546)

— Oct 07: IRS revokes exempt status of entity organized to provide scholarships to employees of related organization (Tax Alert 2022-1528)

International

— Oct 13: Austria implements new, relaxed eligibility criteria for Red-White-Red Cards (Tax Alert 2022-1553)

— Oct 12: Update provided regarding Canada's proposed federal investment tax credit for carbon capture, utilization and storage (Tax Alert 2022-1542)

— Oct 12: Uruguayan Government submits bill to Parliament to modify Uruguayan CIT source criteria (Tax Alert 2022-1541)

— Oct 11: Spanish Supreme Court rules on dynamic interpretation of tax treaties and "substance-over-form" characterization of cross-border transfer of client and operational data (Tax Alert 2022-1538)

— Oct 11: EU Member States formally adopt electricity revenue cap and solidarity contribution of fossil fuel sector (Tax Alert 2022-1535)

— Oct 11: Costa Rica's General Directorate of Treasury publishes new criteria for selecting tax exemption regimes and beneficiaries under their supervision for audits (Tax Alert 2022-1533)

— Oct 10: Peruvian Congress ratifies Convention to Harmonize Double Tax Treaties of Pacific Alliance (Tax Alert 2022-1530)

— Oct 10: Mexico takes first steps to ratify MLI (Tax Alert 2022-1529)

— Oct 07: Malaysia introduces new Social Visit Pass feature to allow foreigners undertake critical/emergency work (Tax Alert 2022-1521)

States

— Oct 12: Illinois Department of Revenue automatically extends the extended due date for calendar year 2021 corporate income tax returns to November 15 (Tax Alert 2022-1548)

— Oct 12: Maine law requires employers with more than 10 employees to pay accrued vacation at termination starting January 1, 2023 (Tax Alert 2022-1545)

— Oct 11: A FUTA credit reduction is projected to apply in seven jurisdictions in 2022; most states have not imposed federal interest surtaxes on employers (Tax Alert 2022-1536)

— Oct 11: Florida provides unemployment insurance relief to employees and employers impacted by Hurricane Ian (Tax Alert 2022-1534)

— Oct 10: Iowa updates income tax withholding reporting requirements, establishes penalty for late and inaccurate Forms W-2/1099 (Tax Alert 2022-1531)

— Oct 10: District of Columbia withholding instructions and tables do not currently reflect tax increases that were effective January 1, 2022 (Tax Alert 2022-1526)

— Oct 07: Puerto Rico's Treasury Department issues guidance on special disaster distributions from retirement plans and IRA accounts due to Hurricane Fiona (Tax Alert 2022-1525)

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IRS Weekly Wrap-Up

Final Regulations

 TD 9967Section 42, Low-Income Housing Credit Average Income Test Regulations
 TD 9968Affordability of Employer Coverage for Family Members of Employees

Proposed Regulations

 TD 9967Section 42, Low-Income Housing Credit Average Income Test Regulations
 REG–125693–19Resolution of Federal Tax Controversies by the Independent Office of Appeals; Correction
 REG–130975–08Guidance Under Section 2053 Regarding Deduction for Interest Expense and Amounts Paid Under a Personal Guarantee, Certain Substantiation Requirements, and Applicability of Present Value Concepts; Hearing Cancellation

Notices

 2022-41Additional Permitted Election Changes for Health Coverage under Section 125 Cafeteria Plans

Internal Revenue Bulletin

 2022-42Internal Revenue Bulletin of October 17, 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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