April 27, 2023
U.S. Tax This Week for April 28
Ernst & Young's U.S. Tax This Week newsletter for the week ending April 28 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
House narrowly passes GOP debt ceiling package, 217-215
The House on April 26 passed, by a vote of 217-215, the Limit, Save, Grow Act of 2023 (HR 2811), a bill assembled by the Republican leadership that would suspend the statutory debt ceiling until March 31, 2024, or until $1.5 trillion of debt over the current statutory limit is incurred (whichever happens first), while making trillions in spending cuts across a broad swath of programs and repealing a number of tax breaks enacted in last year's Inflation Reduction Act (IRA), among other changes. The Congressional Budget Office concluded this week that the bill would result in $4.8 trillion in deficit reduction from 2023 — 2033, while also reducing projected tax collections by $191 billion during that period as a result of repealing IRS funding provided in the IRA. EY Tax Alert 2023-0768 has details.
IRS issues guidance on safe harbor accounting method for capitalizing certain natural gas transmission and distribution property costs
In Revenue Procedure 2023-15 (Revenue Procedure), the IRS creates a safe harbor that taxpayers may use to determine whether they must capitalize or may immediately deduct expenses to maintain, repair, replace or improve natural gas transmission and distribution property. Taxpayers can either change their method of accounting with an IRC Section 481(a) adjustment or choose to make the change using the cut-off basis if they make the change for their first, second or third tax year ending after May 1, 2023. EY Tax Alert 2023-0742 has details.
EY Guides and Publications
QUEST Economic Update highlights key US and global economic trends - April 21, 2023
EY's Quantitative Economics and Statistics (QUEST) group has developed the attached publication summarizing the latest key economic and employment trends in a short, easy-to-read format. Developments such as growth trends in US gross domestic product (GDP), US employment and Federal Reserve activity are highlighted, as are economic trends outside the United States that may affect US businesses.
EY Tax.Tech™ Ecosystem series: Preparing for OECD Pillar Two global minimum tax calculations, provision and compliance requirements (May 4)
During this EY Webcast, Ernst & Young professionals will discuss data requirements, processing steps and timeline necessary to meet upcoming BEPS 2.0 Pillar Two requirements. They will also highlight tools included on the Orbitax International Tax Platform that can help companies address issues related to the global minimum tax. These tools leverage Thomson Reuters integration to improve and automate your tax compliance preparation and review process. Finally, they’ll review the latest use cases and preview what’s ahead.
International tax talk quarterly series with the EY Global Tax Desk Network (May 9)
During this EY Webcast, our Global Tax Desk professionals will provide insights on recent significant tax developments in Australia, Brazil, India, Netherlands and Russia and explain how they might affect your businesses.
The current environment for R&D credit claims: A review of the latest guidance (May 17)
During this EY Webcast, Ernst & Young professionals will discuss original and amended return R&D credit claims, taxpayers under examination and taxpayers contemplating R&D credit claims in the future. Understanding the current judicial, examination and Appeals environment will help taxpayers anticipate what will be required to sustain an R&D credit.
Recent Tax Alerts
Internal Revenue Service
— Apr 26: IRS modifies 2014 guidance that said digital currency was not legal tender in any jurisdiction (Tax Alert 2023-0757)
— Apr 26: Luxembourg provides details on new draft transfer pricing provisions (Tax Alert 2023-0765)
— Apr 26: Ghana's new laws introduce new taxes affecting individuals and businesses (Tax Alert 2023-0763)
— Apr 25: Ghana: Tax treatment and the recognition of deferred tax on Expected Credit Losses (Tax Alert 2023-0761)
— Apr 25: Chilean government introduces amendments to the Mining Royalty bill (Tax Alert 2023-0760)
— Apr 24: Czech Republic's Chamber of Deputies approves significant amendments to existing immigration laws (Tax Alert 2023-0756)
— Apr 21: Uruguay's Executive Branch raises income limit to apply for simplified regime for Personal Income Tax (Tax Alert 2023-0749)
— Apr 20: Germany approves amendments to the Skilled Worker immigration regulations (Tax Alert 2023-0745)
— Apr 20: Poland implements amendments to the Act on Foreigners (Tax Alert 2023-0743)
— Apr 20: German Finance Ministry releases discussion draft on pending introduction of e-invoice (Tax Alert 2023-0741)
— Apr 20: European Parliament approves EU Emission Trading System reform and new EU Carbon Border Adjustment Mechanism (Tax Alert 2023-0740)
— Apr 20: Russian authorities require exiting foreign companies to pay 'contributions' at 5% or 10% of market value - implications for US multinationals (Tax Alert 2023-0738)
— Apr 26: House narrowly passes GOP debt ceiling package, 217-215 (Tax Alert 2023-0768)
— Apr 26: What to expect in Washington (April 26) (Tax Alert 2023-0764)
— Apr 25: Special Edition | This Week in Health Policy, Spring Payment Rule Update and Other Recess Activity (Tax Alert 2023-0759)
— Apr 24: What to expect in Washington (April 24) (Tax Alert 2023-0755)
— Apr 20: Ways & Means holds Green Energy hearing as debt limit bill released (Tax Alert 2023-0739)
— Apr 20: House Financial Services Committee questions SEC's Gensler on crypto, climate risk rule, brisk pace of rulemaking (Tax Alert 2023-0737)
— Apr 26: Utah lowers personal income tax rate retroactive to January 1, 2023 (Tax Alert 2023-0766)
— Apr 24: Michigan Department of Treasury clarifies Detroit income tax liability for remote workers and employer withholding liability during the COVID-19 emergency and beyond (Tax Alert 2023-0758)
State and Local Tax Weekly
Highlights of this edition include:
— Mississippi law brings clarity to the application of state sales and use tax to computer software, exempts software maintained on an out-of-state server On March 28, 2023, Mississippi Governor Tate Reeves signed into law SB 2449, which clearly establishes the application of sales and use tax to computer software and computer software services.
— 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
| ||2023-22||26 CFR 601.601: Rules and Regulations (Also Part 1, §§ 25, 143, 6a.103A-1(b)(4), 6a.103A-2(f)(5)).|
| ||2023-34||Modification of Notice 2014-21|
Internal Revenue Bulletin
| ||2023-17||Internal Revenue Bulletin of April 24, 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.