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September 8, 2023

U.S. Tax This Week for September 8

Ernst & Young's U.S. Tax This Week newsletter for the week ending September 8 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 D&O insurance proceeds will be excluded from gross income for purposes of REIT income tests

In two substantially similar private letter rulings obtained by professionals at EY (PLRs 202335004 and 202335005), the IRS ruled that proceeds from D&O Insurance claims related to the settlement and legal defense costs of certain lawsuits will be excluded from gross income for purposes of the REIT gross income tests under IRC Sections 856(c)(2) and (c)(3). EY Tax Alert 2023-1478 has details.

LB&I announces new 2024 CAP program application period with some program changes

The IRS's Large Business and International division (LB&I) has announced (IR-2023-164) that it is currently accepting new applications for its Compliance Assurance Process (CAP) program for tax year 2024. The application period runs from September 6, 2023 to October 31, 2023. The updates to the program include (1) replacing the Bridge phase with Bridge Plus and (2) a new Form 14234-E, Cross-Border Activities Questionnaire (CBAQ), to cover specific international issues. The IRS will notify participants if they are accepted into the program in February 2024. EY Tax Alert 2023-1485 has details.

EY Guides, Surveys, and Reports

Asean Mobility Spotlight (August 2023)
In this edition of EY’s Asean Mobility Spotlight, we focus on the compliance considerations and areas of risk for remote workers in selected Asean jurisdictions. As organizations define their stance on international remote working arrangements, understanding what is required and who is responsible is key. Organizations need to adopt a forward-looking approach and develop a robust framework to manage the growing complexities and risks associated with international remote working arrangements.

Upcoming Webcasts

International tax talk quarterly series with the EY Global Tax Desk Network (September 12)
Recent proposed tax changes across the globe may have significant implications for companies in the next quarter and beyond. Some of these changes are complex, so it is important that businesses understand them and try to prepare now – particularly for those that take effect in 2024. Please join our EY webcast for insights on recent developments in Australia, Brazil, Hong Kong, Mexico, Switzerland, and the United States and an analysis of how they might affect your businesses.

BEPS 2.0 recent developments and practical considerations (September 14)
During this EY Webcast, Ernst & Young professionals will discuss the additional Administrative Guidance on the Global Anti-Base Erosion (GloBE) rules, including the new safe harbors.

Tax in a time of transition: legislative, economic, regulatory and IRS developments (September 15)
During this EY Webcast, Ernst & Young professionals will provide updates on: (i) The US economy and tax policy; (ii) What's happening at the IRS; (iii) Breaking developments.

Accounting for income taxes: a quarterly perspective (September 26)
During this EY Webcast, a panel of experienced Ernst & Young LLP professionals, moderated by Angela Evans, Partner, Tax Accounting and Risk Advisory Services (TARAS), will discuss ongoing issues and regulatory trends in the tax accounting arena. Topics will include recent tax legislation with tax accounting implications and a review of current income tax accounting concepts.

Recent Tax Alerts

Internal Revenue Service

— Sep 07: LB&I announces new 2024 CAP program application period with some program changes (Tax Alert 2023-1485)

— Sep 06: LB&I announces new application period for 2024 CAP program (Tax Alert 2023-1479)

— Sep 06: IRS rules that D&O insurance proceeds will be excluded from gross income for purposes of REIT income tests (Tax Alert 2023-1478)

— Aug 31: Proposed regulations on prevailing wage and apprenticeship requirements fill in details for obtaining bonus renewable energy tax credits (Tax Alert 2023-1469)

— Aug 25: IRS rules payments to REIT for subsurface storage of carbon dioxide are qualifying income (Tax Alert 2023-1449)


— Sep 07: Peruvian Supreme Court holds Peruvian branches may not offset past losses when distributing dividends to nonresident parent (Tax Alert 2023-1486)

— Sep 07: Iceland introduces new benefits for residence permit holders (Tax Alert 2023-1484)

— Sep 07: EY Canada's Tax Matters @ EY for September 2023 (Tax Alert 2023-1483)

— Sep 07: New Zealand introduces draft Digital Services Tax legislation (Tax Alert 2023-1482)

— Sep 06: German government issues revised draft Growth Opportunities Act bill on corporate tax reform (Tax Alert 2023-1481)

— Sep 06: Brazilian Government proposes the elimination of interest on net equity deduction (Tax Alert 2023-1477)

— Sep 05: Guatemala's Superintendency of Tax Administration introduces a new tax inspection risk model (Tax Alert 2023-1475)

— Sep 05: Israeli tax authority issues updated guidance on Mutual Agreement Procedures, in line with BEPS principles (Tax Alert 2023-1473)

— Sep 05: Canada moves ahead with its own digital services tax, releasing draft legislation (Tax Alert 2023-1472)

— Sep 05: Brazil modifies how investment funds will be taxed (Tax Alert 2023-1471)

— Sep 05: Japan implements new system to expedite the employment of foreign IT professionals (Tax Alert 2023-1470)

— Aug 29: Brazil's visa requirement for nationals of Australia, Canada and the United States postponed to January 2024 (Tax Alert 2023-1460)

— Aug 29: China Mainland eliminates pre-travel COVID-19 test requirement (Tax Alert 2023-1459)

— Aug 28: Canada's Global Minimum Tax Act released for public comment (Tax Alert 2023-1456)

— Aug 28: Italy's Enabling Law 2023 makes VAT changes (Tax Alert 2023-1455)

— Aug 28: Nepal Inland Revenue Department amends VAT and DST procedures relating to digital service (Tax Alert 2023-1454)

— Aug 25: Italy approves framework for major tax reform, including BEPS Pillar Two principles (Tax Alert 2023-1451)


— Sep 06: Indiana Form WH-4 is now updated to reflect eligibility for one-time dependent child tax exemption (Tax Alert 2023-1480)

— Aug 29: Illinois law requires employers to provide paid leave effective January 1, 2024 (Tax Alert 2023-1463)

Recent Newsletters

ITS/Washington Dispatch
   Highlights of this edition include:


  • US Congress to take up appropriations bills, consider US-Taiwan tax relationship

IRS news

  • IRS proposes updating regulations on consolidated returns, discarding unnecessary guidance
  • IRS issues proposed regs on broker reporting requirements for digital asset sales and exchanges
  • Cryptocurrency stakers must include rewards in gross income upon gaining control

Tax treaties

  • Russia suspends US-Russia, other tax treaties

OECD developments

  • Progress reported on BEPS Amount A, Pillar One, further work on Pillar Two safe harbors
  • Global minimum tax filing simplification possible, OECD official says

United Nations

  • UN releases final report on international tax cooperation

IRS Weekly Wrap-Up

Proposed Regulations

 REG-106228-22Malta Personal Retirement Scheme Listed Transaction; Hearing Cancellation
 REG-122793-19Gross Proceeds and Basis Reporting by Brokers and Determination of Amount Realized and Basis for Digital Asset Transactions
 REG-124123-22Corporate Bond Yield Curve for Determining Present Value; Hearing Cancellation
 REG-100908-23Increased Credit or Deduction Amounts for Satisfying Certain Prevailing Wage and Registered Apprenticeship Requirements


 TD 9979Additional Guidance on Low-Income Communities Bonus Credit Program, Correction

Revenue Rulings

 2023-17Determination of Rate of Interest


 2023-56Federal Income Tax Consequences of Certain State Payments
 2023-62Guidance on Section 603 of the SECURE 2.0 Act with Respect to Catch-Up Contributions

Internal Revenue Bulletin

 2023-35Internal Revenue Bulletin of August 28, 2023
 2023-36Internal Revenue Bulletin of September 5, 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.