October 6, 2023
U.S. Tax This Week for October 6
Ernst & Young's U.S. Tax This Week newsletter for the week ending October 6 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 continues to focus on the proper entity to take into account sell-side transaction costs in a ruling granting target's request to make a late success-based fee election
In PLR 202335013, the IRS granted a privately held corporation an extension of time to make the safe harbor election described in Revenue Procedure 2011-29 for a success-based fee paid on the completion of a reverse merger transaction. This Tax Alert is one in a series discussing recent IRS rulings involving the proper entity to take transaction costs into account. EY Tax Alert 2023-1632 has details.
New York Division of Tax Appeals finds in favor of taxpayer for sourcing of certain financial services receipts based on reasonable approximation, investment capital election and certain tax credits
In Matter of Jefferies Group LLC & Subsidiaries, the State of New York Division of Tax Appeals (NY DTA) reversed determinations by the New York Division of Taxation (Division) on various broker-dealer specific issues related to the taxpayer's corporate tax filings under Article 9-A. EY Tax Alert 2023-1643 has details.
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).
How to energize a workforce in the great rebalance (October 17)
During this EY Webcast, Ernst & Young professionals discuss the EY 2023 Work Reimagined Survey with insights from 17,050 employees and 1,575 employers in 22 countries, revealing the contours of new workforce realities.
How transferable tax credits are changing the tax landscape (October 17)
The Inflation Reduction Act (IRA) introduced federal transferable tax credits. This EY Webcast, will cover many FAQs, including which tax credits are transferable, an update on the contents of the recently released proposed regulations and how the transfer process works.
Business impacts of sustainability and ESG tax policies (October 18)
During this first in a quarterly series of EY Webcast, Ernst & Young professionals will be discussing the role of tax in sustainability and how it can impact businesses’ ESG strategy and operations. Topics will include: (i) the impact of sustainability on business and tax operations; (ii) the sustainability tax landscape; and (iii) the legislative and tax policy emphasis on climate change.
EY Tax.Tech™ Ecosystem series: Finance and Tax convergence - the next transformation frontier (October 19)
In this dynamic, complex, and competitive landscape, Finance and Tax alignment is critical and can unlock data to help identify synergies and establish viable and enduring business value. During this EY Webcast, we will explore how Thomson Reuters tax and accounting clients have adopted a transformation mindset through better aligning with the finance agenda, integrating into an enterprise resource planning (ERP) strategy, and helping their people, processes and technology improve their tax function and better utilize their ONESOURCE suite of products.
Tax in a time of transition: legislative, economic, regulatory and IRS developments (October 20)
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; and (iii) breaking developments.
US corporate income tax compliance: Insights from Tax Year 2022 and considerations for the future (October 25)
During this EY Webcast, Ernst & Young professionals will provide the latest insights on dynamic compliance environment and how your company can continue navigating its complexity and challenges. We will also focus on preparing for tax year 2023 (TY23) and beyond.
Realizing the full potential of your tax and finance function: Insights and leading practices for financial services institutions (November 7)
During this EY Webcast, Ernst & Young professionals will discuss how financial services institutions are elevating their tax operating models to: (i) empower their people to shape change; (ii) utilize technology to improve efficiency and data integrity; and (iii) future-proof their tax and finance responsibilities.
Recent Tax Alerts
Internal Revenue Service
— Oct 04: Taxpayers can begin applying for allocations under Low-Income Communities Bonus Credit Program on October 19, 2023 (Tax Alert 2023-1647)
— Oct 02: IRS issues guidance on leave-based donation programs to support Hawaii wildfire victims (Tax Alert 2023-1634)
— Oct 02: IRS continues to focus on the proper entity to take into account sell-side transaction costs in a ruling granting target's request to make a late success-based fee election (Tax Alert 2023-1632)
— Oct 05: Argentine Tax Authority establishes new income tax prepayment for financial entities, insurance companies, payment service providers (Tax Alert 2023-1657)
— Oct 05: Pakistan | Sindh issues rules for collecting sales tax on IT and advertisement services remitted abroad (Tax Alert 2023-1654)
— Oct 05: EY Canada's Tax Matters @ EY for October 2023 (Tax Alert 2023-1652)
— Oct 05: UK's Migration Advisory Committee publishes its review of the Shortage Occupation List (Tax Alert 2023-1651)
— Oct 04: El Salvador's Tax Authority publishes list of tax havens for 2024 (Tax Alert 2023-1646)
— Oct 03: Portugal enacts legislation introducing public country-by-country reporting for multinational enterprises (Tax Alert 2023-1642)
— Oct 03: Egypt issues transfer pricing Explanatory Instructions (Tax Alert 2023-1641)
— Oct 03: Norway's pilot program to expedite work permit processing times (Tax Alert 2023-1640)
— Oct 03: Denmark announces extension of Special Act on displaced persons from Ukraine until March 2025 (Tax Alert 2023-1639)
— Oct 03: Pakistan | Punjab modifies Sales Tax on Services Act 2012, changing descriptions, rates and more (Tax Alert 2023-1638)
— Oct 02: Costa Rica enacts law making reforms to achieve exclusion from EU's list of non-cooperative jurisdictions in tax matters (Tax Alert 2023-1636)
— Oct 02: Kenya Revenue Authority enforces VAT and DST compliance for electronic, internet and digital marketplace supplies (Tax Alert 2023-1633)
— Sep 29: Kenya's new anti-money laundering law adds compliance obligations for companies, branches, limited liability partnerships and foreign LLPs (Tax Alert 2023-1625)
— Sep 29: French Government releases draft Finance Bill for 2024, including OECD Pillar Two rules (Tax Alert 2023-1624)
— Sep 29: Saudi Arabia proposes amendments to the Income Tax Law (Tax Alert 2023-1623)
— Sep 29: USCIS work authorization and travel program updates end fiscal year 2023 on a positive note (Tax Alert 2023-1622)
— Oct 04: What to expect in Washington (October 4) (Tax Alert 2023-1645)
— Oct 05: Massachusetts governor signs bill that adopts single sales factor apportionment, reduces short-term capital gains tax rate, makes other tax changes (Tax Alert 2023-1655)
— Oct 04: State corporate income and franchise tax developments in the third quarter of 2023 (Tax Alert 2023-1644)
— Oct 03: New York Division of Tax Appeals finds in favor of taxpayer for sourcing of certain financial services receipts based on reasonable approximation, investment capital election and certain tax credits (Tax Alert 2023-1643)
— Oct 02: New Jersey Division of Taxation issues additional guidance on new convenience of the employer rule (Tax Alert 2023-1637)
— Sep 29: Ohio Board of Tax Appeals addresses construction of CAT situsing rule for sales of tangible personal property (Tax Alert 2023-1628)
— Sep 29: Montana law lowers the maximum number of weeks that claimants can receive unemployment insurance benefits (Tax Alert 2023-1621)
State and Local Tax Weekly
Highlights of this edition include:
— Ohio Board of Tax Appeals addresses construction of CAT situsing rule for sales of tangible personal property. The Ohio Board of Tax Appeals (BTA) recently issued decisions in two cases — VVF Intervest, LLC and Jones Apparel Group/Nine West Holdings — that involved refund claims focused on the application of ORC 5751.033(E), the Commercial Activity Tax (CAT) rule governing situsing sales of tangible personal property.
— Nebraska district court denies dividend received deduction for IRC § 965(a) inclusion income. In Precision Castparts v. Nebraska Department of Revenue, the Lancaster County District Court (court) upheld a determination from the Nebraska Department of Revenue (Department) denying a taxpayer's state dividend received deduction (DRD) for IRC § 965(a) inclusion income.
— Income/Franchise, Sales & Use, Business Incentives, Property Tax, Compliance & Reporting, Payroll & Employment Tax, Miscellaneous Tax, Value Added Tax, Upcoming Webcasts
Highlights of this edition include:
- Senate Finance Committee approves US-Taiwan tax bill
- House Republicans want countries to delay BEPS Pillar Two, adopt GILTI-like regime
- IRS publishes additional interim guidance clarifying CAMT
- IRS announces intent to issue proposed regulations for Section 174, would affect cost sharing arrangements
- US Government considering extension of temporary FTC relief, guidance on taxes paid under BEPS Pillar Two
- IRS official offers international regulatory update
- 2024 CAP program accepting new applications
- IRS announces major new compliance initiative targeting large partnerships
IRS Weekly Wrap-Up
| ||TD 9980||Preparer Tax Identification Number (PTIN) User Fee Update|
| ||REG-115559-23||Excise Tax on Designated Drugs; Procedural Requirements|
| ||REG-106203-23||Preparer Tax Identification Number (PTIN) User Fee Update|
| ||RIN 0938-ZB81||Request for Information; Coverage of Over-the-Counter Preventive Services|
| ||REG-117614-14||Guidance Under Section 367(b) Related to Certain Triangular Reorganizations and Inbound Nonrecognition Transactions|
| ||2023-35||Examination of returns and claims for refund, credit or abatement; determination of correct tax liability|
| ||2023-33||Transfer of credit under Sections 30d and 25e from taxpayer to eligible entity and updated requirements for qualified manufacturers and sellers|
| ||2023-18||Section 1274 — Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property|
Internal Revenue Bulletin
| ||2023-39||Internal Revenue Bulletin of September 25, 2023|
| ||2023-40||Internal Revenue Bulletin of October 2, 2023|
| ||2023-41||Internal Revenue Bulletin of October 10, 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.