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January 26, 2023

U.S. Tax This Week for January 27

Ernst & Young's U.S. Tax This Week newsletter for the week ending Janaury 27 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 rules that taxpayer that purchased another utility through asset sale can continue "protected" excess deferred income tax liability and amortization

In PLR 202303003, the IRS ruled that a taxpayer that purchased a gas utility through an asset purchase agreement could continue the "protected" excess deferred income tax (EDIT) liability and amortization established by the Tax Cuts and Jobs Act (TCJA) under the predecessor's schedule. EY Tax Alert 2023-0136 has details.

IRS allows private foundation to set aside funds for pending construction project without incurring excise tax on undistributed income

In a private letter ruling (PLR 202302014), the IRS has approved a private foundation's request to establish a "set-aside" under IRC Section 4942(g)(2) so that funds the foundation retains to spend on a future construction renovation project will not be subject to the 30% excise tax on undistributed income under IRC Section 4942. EY Tax Alert 2023-0148 has details.

EY Guides and Publications

2023 Congressional Outlook | New House Republican majority brings oversight, fiscal deadlines to forefront of activity in Washington
Republicans have taken control of the House with a slim majority and a conservative bloc that wielded power in the voting to choose a Speaker. The group gained additional power through rules changes and concessions, intended to address their concerns over omnibus appropriations bills like the one approved at the end of 2022 and lifting the debt limit without spending reforms. In this publication, EY's Washington Council Ernst & Young takes a look at the legislative agenda for 2023.

Upcoming Webcasts

What India’s 2023-24 Budget could mean for its economy (February 9)
During this EY Webcast, Ernst & Young professionals will help explain the fine print of the 2023-24 India Budget, covering the macroeconomic and policy announcements, direct tax proposals and indirect tax proposals.

Tax in a time of transition: legislative, economic, regulatory and IRS developments (February 17)
During this EY Webcast, Ernst & Young professionals will provide an overview of recent tax and economic developments designed to help you stay on top of changes in today’s shifting economic, legislative and regulatory environment. In this regularly occurring webcast series, panelists will provide updates on: (i) the US economy and tax policy; (ii) what’s happening at the IRS; (iii) breaking developments.

Recent Tax Alerts

Internal Revenue Service

— Jan 20: One-year statute of limitation closing soon for filing refund claims for City of San Francisco and Los Angeles business taxes for tax year 2021 (Tax Alert 2023-0133)

— Jan 19: Upcoming business tax filing deadlines in San Francisco and Los Angeles (Tax Alert 2023-0128)


— Jan 26: Argentina issues new regulations on normalization program of local and foreign currency for construction investments and the incentive regime for Argentine investment and production (Tax Alert 2023-0156)

— Jan 25: Morocco enacts Finance Law 2023 | A review of key tax measures (Tax Alert 2023-0152)

— Jan 24: The Netherlands issues favorable Decree clarifying application of transfer pricing anti-mismatch rules for asset transfers to Dutch corporate taxpayer through contributions and distributions (Tax Alert 2023-0149)

— Jan 24: Luxembourg's 2023 tax and legal forecast provided (Tax Alert 2023-0147)

— Jan 24: Spain issues draft List of Non-Cooperative Jurisdictions for Tax Purposes (Tax Alert 2023-0146)

— Jan 24: Costa Rica’s Tax Authority establishes new criteria for use of information contained in Transparency and Beneficial Ownership Register (Tax Alert 2023-0142)

— Jan 20: Global Tax Policy and Controversy Watch | January 2023 edition (Tax Alert 2023-0135)

— Jan 20: Mauritius Protocol amending Double Taxation Avoidance Agreement with Germany will be in force as of 1 July 2023 (Tax Alert 2023-0132)

— Jan 19: Brazil announces tax recovery measures (Tax Alert 2023-0127)

— Jan 19: Guatemala's Ministry of Public Finance amends Value Added Tax Regulations (Tax Alert 2023-0126)

— Jan 19: Honduras' ZEDE regime is recognized as abolished following review by OECD Forum on Harmful Tax Practices (Tax Alert 2023-0125)

— Jan 19: South Korea announces new COVID-19-related restrictions for travelers arriving from China Mainland, Hong Kong and Macau (Tax Alert 2023-0124)


— Jan 25: What to expect in Washington (January 25) (Tax Alert 2023-0151)


— Jan 25: Puerto Rico's Treasury Department announces qualified retirement plan limits for 2023 (Tax Alert 2023-0155)

— Jan 25: Arizona employees must submit Form A-4, Employee's Arizona Withholding Election, to their employers for 2023 (Tax Alert 2023-0154)

— Jan 19: Preliminary state unemployment insurance tax facts for 2023 (as of January 17, 2023) (Tax Alert 2023-0123)

Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

Colorado's new carryout bag fee, effective Jan. 1, 2023, creates new compliance obligations and issues Effective Jan. 1, 2023, Colorado imposes a 10-cent per carryout bag fee on most retail businesses. For the first phase of the fee, which runs Jan. 1, 2023 to Dec. 31, 2023, a store may furnish a recycled paper carryout bag or a single-use plastic carryout bag to a customer if the customer pays a fee of 10 cents per bag, or a higher fee adopted by the municipality or county in which the store is located.

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

IRS Weekly Wrap-Up

Proposed Regulations

 REG–146537–06Income of Foreign Governments and International Organizations; Comment Period Reopening; Correction

Internal Revenue Bulletin

 2023-04Internal Revenue Bulletin of January 23, 2023

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.