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August 4, 2023

U.S. Tax This Week for August 4

Ernst & Young's U.S. Tax This Week newsletter for the week ending August 4 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 makes permanent fast-track program to resolve certain corporate letter ruling requests

The IRS has established in Revenue Procedure 2023-26 a permanent program for fast-tracking corporate letter rulings that meet certain guidelines. This program replaces the pilot program under Revenue Procedure 2022-10 (see Tax Alert 2022-0144), with two notable changes, and applies to ruling requests received by the IRS after July 26, 2023. EY Tax Alert 2023-1329 has details.

IRS releases guidance on non-exempt activities and excess benefit transactions, announces sign-in options for e-postcard submissions

The IRS has released new technical guides for tax-exempt organizations providing an overview and guidance on applying the rules related to (1) non-exempt activity and unrelated business income tax and (2) excess benefit transactions. In addition, the IRS notified taxpayers that sign-in options are available for eligible small tax-exempt organizations to submit Form 990-N, an e-postcard, to satisfy their annual IRS Form 990-series filing requirement. EY Tax Alert 2023-1354 has details.

EY Guides and Publications

EY TradeWatch | Issue 2, 2023
In this edition, we continue to focus on trade trends, specifically disruption, technology, sustainability, trade facilitation, controversy and customs reform. Trade disruption continues, becoming effectively the "new normal". But how should businesses respond? This is a topic that is explored in depth in our latest report 'Refocusing on the global trade functional organization — a global trade perspective'. which is based on in-depth conversations and benchmarking studies with trade leaders in global companies. In this edition, we also continue the conversation on the trade function by looking at steps companies can take for 'Future-proofing the customs and trade function'. We set out why businesses should care about this topic now, and why having an effective, future-proofed trade function should be high on every trading company's agenda. In this edition, we also look at other trade trends, including sustainability and ESG regulations, the effective use of trade facilitation measures and managing controversy. We also look at customs reform in the EU and Canada and provide an update on Section 301 in the US.

Upcoming Webcasts

Tax in a time of transition: Legislative, economic, regulatory and IRS developments (August 18)
Please join us for a fast-paced 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 EY webcast series, panelists will provide updates on: (i) the US economy and tax policy; (ii) what’s happening at the IRS; and (iii) breaking developments.

Tax and Finance Operate: Now. Next. Beyond. (August 23)
During this webcast, EY Global Compliance and Reporting practitioners will explore the current tax and finance operations landscape and share insights and results from the recently released EY survey. They will be joined by senior tax executives from Mondelez International, Inc. and UPS, who will share how their companies successfully revolutionized their tax and finance function and established a new tax operating model. They’ll also share practical approaches for industry professionals navigating global tax and finance operations.

BorderCrossings ... With EY transfer pricing and tax professionals (August 31)
During this EY webcast, Ernst & Young professionals examine the difficulties in applying transfer pricing rules to attribute profits to permanent establishments considering both US and international tax treaties. Under US tax treaties, Article 7 governs profit attribution to permanent establishments and references the arm’s-length principle under Article 9. In response to a lack of clear and consistent interpretation of profit attribution under international tax treaties, the Organisation for Economic Co-operation and Development (OECD) developed the Authorized OECD Approach (AOA).

Recent Tax Alerts

Internal Revenue Service

— Aug 03: IRS releases proposed regulations that would require disclosure of monetized installment sale transactions (Tax Alert 2023-1359)

— Aug 01: IRS concludes a retail apparel company can satisfy the process of experimentation requirement for the research credit even if some of its activities were not conducted for a permitted purpose (Tax Alert 2023-1341)


— Aug 03: Canada publishes trade compliance verification list update, July 2023 (Tax Alert 2023-1363)

— Aug 03: Argentina to open new consulate in China Mainland (Tax Alert 2023-1357)

— Aug 02: USCIS announces completion of second random selection from previously submitted FY 2024 H-1B cap registrations (Tax Alert 2023-1356)

— Aug 02: France postpones electronic invoicing initially scheduled for 1 July 2024 (Tax Alert 2023-1355)

— Aug 02: Peru enacts regulations on preferential depreciation rates for buildings, construction and hybrid and electric vehicles (Tax Alert 2023-1353)

— Aug 02: South Africa's 2023 draft Tax proposals (Tax Alert 2023-1352)

— Aug 02: Korea announces 2023 tax reform proposals (Tax Alert 2023-1351)

— Aug 02: Singapore launches new, enhanced assessment tool for Employment Pass and S Pass sponsors (Tax Alert 2023-1350)

— Aug 02: Aruba Fiscal Plan 2023 — Part II Tax changes (Tax Alert 2023-1347)

— Aug 01: Peruvian Tax Authority interprets Non-Discrimination Clause of Multinational Agreement to avoid Double Taxation as not applicable to transfer of Peruvian shares in international reorganizations (Tax Alert 2023-1346)

— Aug 01: Vietnam to increase the authorized period of stay for e-visa holders and certain visa-exempt nationals (Tax Alert 2023-1342)

— Jul 31: Saudi Arabia further extends tax amnesty initiative until 31 December 2023 (Tax Alert 2023-1340)

— Jul 31: US DHS updates Form I-9, Employment Eligibility Verification (Tax Alert 2023-1337)

— Jul 31: Argentine Tax Authority establishes a new corporate income tax prepayment (Tax Alert 2023-1336)

— Jul 31: Nigeria | Highlights of the 2023 Guidelines on Mutual Agreement Procedure (Tax Alert 2023-1335)

— Jul 31: Saudi Arabia announces seventh wave of Phase 2 e-invoicing integration (Tax Alert 2023-1332)

— Jul 28: Ireland launches second Feedback Statement on EU Minimum Tax Directive and proposed legislative approach (Tax Alert 2023-1330)

— Jul 28: Brazil publishes Provisional Measure to regulate taxation of fixed-odds sports betting (Tax Alert 2023-1328)

— Jul 28: Peruvian Tax Authority establishes guidelines on scope of applying nondiscrimination clause of the Double Tax Treaties signed by Peru (Tax Alert 2023-1322)


— Aug 03: Nebraska law gradually lowers personal income tax rates over four years, starting in 2024 (Tax Alert 2023-1362)

— Jul 31: Vermont law imposes new childcare tax to be paid by employers and employees effective July 1, 2024 (Tax Alert 2023-1338)

Recent Newsletters

ITS/Washington Dispatch
   Highlights of this edition include:

US Congress

  • Congressional Republicans criticize BEPS 2.0 project

  • Senate moves on US-Taiwan tax relations

  • Congress pivots to crypto assets, requests comments on tax uncertainties

Treasury and IRS news

  • IRS waives addition to tax for a corporation’s failure to make estimated tax payments of its CAMT

  • IRS makes permanent fast-track program to resolve certain corporate PLR requests

OECD developments 

  • OECD/G20 Inclusive Framework releases technical documents on BEPS Pillars One and Two

  • OECD releases Outcome Statement on progress on Pillars One and Two of BEPS 2.0 project

  • OECD Secretary-General Tax Report provides international tax update

  • OECD releases 2023 report on tax transparency in Latin America

IRS Weekly Wrap-Up

Proposed Regulations

 REG–120727–21Requirements Related to the Mental Health Parity and Addiction Equity Act
 REG–121709–19Rules for Supervisory Approval of Penalties; Hearing


 TD 9515Guidance Under Section 1502; Amendment of Matching Rule for Certain Gains on Member Stock; Correction

Revenue Rulings

 2023-1426 CFR 1.61-1: Gross income

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.