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September 15, 2023

U.S. Tax This Week for September 15

Ernst & Young's U.S. Tax This Week newsletter for the week ending September 15 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

US proposed digital asset rules would redefine key terms and introduce new standards

In highly-anticipated regulations on digital asset reporting (REG-1122793-19), the IRS proposed to implement changes to IRC Section 6045 made by the Infrastructure Investment and Jobs Act (IIJA) in 2021, while also changing several other key regulations. The package adopts many of the longstanding concepts and terms that apply to sales of securities, including the reporting of a customer's tax basis and gross proceeds from a sale; it also redefines key terms and introduces new standards that apply uniquely to digital assets. EY Tax Alert 2023-1513 has details.

IRS announces intent to issue proposed regulations for IRC Section 174

In Notice 2023-63 (Notice), released September 8, 2023, the IRS and Treasury Department have described rules that the IRS is considering for inclusion in proposed regulations under IRC Section 174, as amended by the TCJA. The guidance also covers the treatment of SRE expenditures under IRC Section 460, as well as the application of IRC Section 482 to cost-sharing arrangements that involve SRE expenditures. EY Tax Alert 2023-1526 has details.

EY Guides and Publications

Payroll Month in Review | August 2023
EY's Employment Tax Advisory Services group has developed the attached 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.

Our US employment tax rates and limits report for 2023 is updated through August 25, 2023
The 2023 edition of our US employment tax rates and limits report is now updated through August 25, 2023, to reflect changes in state paid family and medical leave insurance, state unemployment insurance and state income tax rates.

Upcoming Webcasts

Accounting for income taxes: a quarterly perspective (September 26)
During this EY Webcast, Ernst & Young 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.

Crypto and digital asset information reporting (September 27)
Recently issued proposed regulations for digital asset information reporting (Form 1099) would require reporting by centralized and de-centralized exchanges, among others, and may have a sweeping impact on an organization’s operational process. For example, onboarding will now require an entity to collect tax forms, transaction systems will need to capture cost basis and sale/transfer information and Forms 1099 will need to be issued annually to the customer and the IRS. The proposed regulations would require reporting in 2026 for sales in 2025. Importantly, that reporting would require cost basis information going back to January 1, 2023. Join this EY Webcast for a discussion of these proposed changes.

BorderCrossings with EY transfer pricing and tax professionals ... OECD BEPS 2.0 transfer pricing update (September 28)
During this EY Webcast, Ernst & Young professionals will provide a transfer pricing update on the Base Erosion and Profit Shifting (BEPS) 2.0 initiative of the Organisation for Economic Co-operation and Development (OECD), with particular emphasis on Pillar One and the country-by-country (CbC) report safe harbor that is part of Pillar Two.

Metaverse event: Charitable giving with appreciated assets and cryptocurrency (September 29)
During this EY Webcast, Ernst & Young professionals and Fidelity Charitable® on Friday, September 29 as we explore the metaverse and discuss the tax impacts of charitable giving and the world of cryptocurrencies.

Refocusing on the global trade functional organization ... A global trade perspective (October 5)
Global trade professionals have navigated higher customs duty costs, increased complexity from the ever-changing regulatory environment, and a need for increased operational efficiencies to help reduce supply chain delays. During this EY Webcast, Ernst & Young professionals will share the benchmarking results of peer global trade professionals on how they are organizing their global trade functions to be more efficient, reduce customs duty costs and effectively manage risks, also taking into consideration technology advancements.

Spotlight on BEPS 2.0: developments and practical implications for US MNEs (October 11)
Global minimum tax rules are set to take effect as soon as 2024, and many multinational entities (MNEs) still have a lot to do to prepare. To help with these efforts, EY is launching a one-hour webcast series focused on steps MNEs can take to prepare for, and comply with, these new rules. During this EY Webcast, Ernst & Young Pillar Two subject-matter professionals for an action-oriented panel discussion, moderated by EY’s Jose Murillo, National Tax Department Leader and former US Department of the Treasury Deputy Assistant Secretary (International Tax Affairs).

Recent Tax Alerts

Internal Revenue Service

— Sep 13: IRS announces intent to issue proposed regulations for IRC Section 174 (Tax Alert 2023-1526)

— Sep 12: IRS enforcement efforts will focus on large partnerships, high-income earners (Tax Alert 2023-1512)

— Sep 08: IRS announces new compliance initiative focusing on large partnerships, high-income taxpayers (Tax Alert 2023-1491)


— Sep 13: Bahrain's Interior Ministry announces online service for renewal of residency and work permits from outside Bahrain (Tax Alert 2023-1532)

— Sep 13: Dominican Republic signs Multilateral Competent Authority Agreement for automatic exchange of transfer pricing information (Tax Alert 2023-1524)

— Sep 13: Italy launches BEPS 2.0 Pillar Two draft law for public consultation (Tax Alert 2023-1517)

— Sep 12: Nigeria Tax Appeal Tribunal judgment partially voids Income Tax Country-by-Country Reporting Regulations 2018 (Tax Alert 2023-1511)

— Sep 12: Kenya revamps Transfer Pricing rules (Tax Alert 2023-1509)

— Sep 12: Costa Rican Congress approves bill to counter exclusion from the European Union's list of non-cooperative jurisdictions in tax matters (Tax Alert 2023-1508)

— Sep 12: Hong Kong introduces new patent-box tax incentive; accepting comments until 30 September (Tax Alert 2023-1507)

— Sep 11: Italian Supreme Court decision extends capital gains participation exemption to nonresident entities (Tax Alert 2023-1505)

— Sep 11: Brazil introduces individual income tax bill affecting taxation of foreign investment income (Tax Alert 2023-1504)

— Sep 11: Canada joins Apostille Convention (Tax Alert 2023-1503)

— Sep 11: Uruguay enacts new initiative to attract IT professionals using tax incentives (Tax Alert 2023-1502)

— Sep 11: UK publishes Statement of Changes to Immigration Rules (Tax Alert 2023-1499)

— Sep 11: Ireland announces new visa requirement for Bolivian nationals (Tax Alert 2023-1498)

— Sep 08: Peruvian Supreme Court establishes guidelines to determine Peruvian-source income for nonresident entities (Tax Alert 2023-1494)

— Sep 08: Australia employers under the compliance spotlight (Tax Alert 2023-1493)

— Sep 08: Costa Rican Tax Authority issues a private letter ruling related to the tax treatment of crypto assets (Tax Alert 2023-1492)


— Sep 13: What to expect in Washington (September 13) (Tax Alert 2023-1519)

— Sep 12: US proposed digital asset rules would redefine key terms and introduce new standards (Tax Alert 2023-1513)

— Sep 12: Finance Committee sets Taiwan tax markup, releases mark (Tax Alert 2023-1510)

— Sep 11: Congress returns to deadlines (Tax Alert 2023-1506)

— Sep 08: Tax-exempt organizations could be impacted by state law developments (Tax Alert 2023-1490)


— Sep 13: New Jersey issues corporate income tax nexus guidance, adds various internet and financial activities to lists of protected and unprotected activities under P.L. 86-272 (Tax Alert 2023-1527)

— Sep 11: Texas trial court holds law preempting local employment practice ordinances unconstitutional; law remains in effect during litigation (Tax Alert 2023-1501)

— Sep 08: Puerto Rico's Treasury Department issues guidance on reporting foreign financial accounts for individuals (Tax Alert 2023-1496)

Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

Ohio Supreme Court takes new approach to statutory construction in applying a sales and use tax exemption statute to fracking activities In Stingray Pressure Pumping, LLC v. Harris, the Supreme Court of Ohio took a new approach to construing tax statutes, particularly exemptions, and allowed most of a taxpayer's claimed Ohio sales/ use tax exemptions for oil and gas production for certain equipment it purchased for fracking activities.

—  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

Revenue Procedures

 2023-31Exceptions from the Electronic Filing Requirements for Certain Filers of Forms 8955-SSA and 5500-EZ


 2023-64Additional Interim Guidance Regarding the Application of the Corporate Alternative Minimum Tax under Sections 55, 56A, and 59 of the Internal Revenue Code

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.