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August 11, 2023

U.S. Tax This Week for August 11

Ernst & Young's U.S. Tax This Week newsletter for the week ending August 11 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 and Treasury propose updating the regulations on consolidated returns and discarding unnecessary guidance

Proposed regulations (REG-134420-10) for corporations that file US federal consolidated income tax returns would update guidance under IRC Section 1502 for statutory changes made over the last 50 years, modernize and clarify language, and facilitate taxpayer compliance. The proposed regulations would also partially or completely withdraw certain notices of proposed rulemaking and temporary regulations that are no longer necessary. Comments must be received by November 6, 2023. EY Tax Alert 2023-1375 has details.

Cryptocurrency stakers must include rewards in gross income upon gaining control of them

The IRS has ruled (Revenue Ruling 2023-14) that taxpayers using the cash-method of accounting must include the rewards from cryptocurrency staking in gross income in the year they gain control of the rewards. EY Tax Alert 2023-1388 has details.

EY Guides, Surveys, and Reports

Payroll Month in Review | July 2023
EY's Employment Tax Advisory Services group has developed this publication summarizing the latest employment tax and other payroll developments in an easy-to-read format. Developments in US federal, state and local payroll and human resources matters are highlighted, as are our insights to improve US employment tax and payroll compliance.

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 10: Cryptocurrency stakers must include rewards in gross income upon gaining control of them (Tax Alert 2023-1388)

— Aug 08: IRS and Treasury propose updating the regulations on consolidated returns and discarding unnecessary guidance (Tax Alert 2023-1375)

— Aug 08: IRS updates Form W-9 with new requirement for flow-through entities (Tax Alert 2023-1374)


— Aug 10: Canada's Department of Finance releases draft legislation for 2023 budget and other measures (Tax Alert 2023-1387)

— Aug 10: Brazil Senate considers VAT reform plan (Tax Alert 2023-1386)

— Aug 10: UK increases penalties for employers and landlords that hire or rent to individuals who do not hold lawful immigration status in the UK (Tax Alert 2023-1385)

— Aug 09: Italy announces proposed one-time windfall tax for banks (Tax Alert 2023-1383)

— Aug 09: Global Tax Policy and Controversy Watch | August 2023 edition (Tax Alert 2023-1382)

— Aug 09: Serbia implements new rules relating to residence permits and Single Permits (Tax Alert 2023-1381)

— Aug 09: PE Watch | Latest developments and trends, August 2023 (Tax Alert 2023-1379)

— Aug 09: Luxembourg enacts legislation introducing public country-by-country reporting for multinational enterprises (Tax Alert 2023-1378)

— Aug 08: Chilean Government announces content of 'Fiscal Pact' (Tax Alert 2023-1377)

— Aug 07: Costa Rica's Tax Authority issues resolution on services related to exports exempt from VAT (Tax Alert 2023-1373)

— Aug 07: Peruvian Tax Authority establishes guidelines for applying Multinational Agreement to avoid Double Taxation of Andean Community (Tax Alert 2023-1371)

— Aug 07: Israeli Parliament approves measures to boost investment in high-tech sector (Tax Alert 2023-1370)

— Aug 04: El Salvador's Congress receives bills to amend International Services Law and the Law for Industrial and Commercial Free Zones (Tax Alert 2023-1369)

— Aug 04: Hungary approves new work and residence permit for “guest workers” (Tax Alert 2023-1367)


— Aug 08: Salem, Oregon enacts new Safe Salem payroll tax; petition underway to immediately refer the tax to Salem voters (Tax Alert 2023-1376)

— Aug 07: Ohio law reduces personal income tax rates retroactive to January 1, 2023 (Tax Alert 2023-1372)

Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

Ohio budget legislation contains tax changes affecting businesses and individuals. On July 3, 2023, Governor Mike DeWine signed HB 33, Ohio's biennial budget legislation for the fiscal period July 1, 2023 through June 30, 2025. HB 33 makes several changes to Ohio's tax laws.

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

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

  • Treasury temporarily delays controversial foreign tax credit regulations
  • 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

Final Regulations

 FR Doc No: 2023-16851Proposed Collection; Comment Request for Form 8874-A
 FR Doc No: 2023-16797Internal Revenue Service Advisory Council; Meeting

Proposed Regulations

 REG-109348-22Identification of Monetized Installment Sale Transactions as Listed Transactions
 REG-134420-10Revising Consolidated Return Regulations To Reflect Statutory Changes, Modernize Language, and Enhance Clarity

Revenue Procedures

 2023-27Rulings and determination letters


 2023-52Section 5000d excise tax on sales of designated drugs; reporting and payment of the tax
 2023-59Guidance on requirements for home energy audits for purposes of the Energy Efficient Home Improvement Credit under Section 25C

Internal Revenue Bulletin

 2023-32Internal Revenue Bulletin of August 7, 2023
 2023-33Internal Revenue Bulletin of August 14, 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.