October 22, 2023
Americas Tax Policy: This Week in Tax Policy for October 20
This week (October 23-27)
Congress: The House is scheduled to be in session this week to consider new candidates for Speaker.
The House Ways & Means Committee has announced the following hearings for this week:
- Work & Welfare Subcommittee hearing on "Measuring Poverty: How the Biden Administration Plans to Redraw the Poverty Line and Rob Resources from Rural America" on Tuesday, October 24 (at 2 p.m.)
- full Committee hearing on education tax policy, likely to have a focus, at least in part, on college/university issues, on Wednesday, October 25 (at 10 a.m.)
- Social Security Subcommittee hearing on improving the disability adjudication process on Thursday, October 26 (at 9 a.m.)
The Senate stands adjourned until Monday, October 23, when it will convene for a pro forma session only. A vote has been set for 2:15 p.m. on Tuesday, October 24, on the nomination of Michael Whitaker to be Administrator of the Federal Aviation Administration. Whitaker received a unanimous vote in the Senate Commerce Committee Wednesday and, as the Washington Post reported, enjoys strong support.
The Senate Finance Committee is holding a hearing, "Exploring Paid Leave: Policy, Practice, and Impact on the Workforce," on Wednesday, October 25 (at 10 a.m.).
OECD: Also this week, on October 26, the OECD will hold a technical webinar on the Multilateral Convention to Implement Amount A of Pillar One.
Last week (October 16-20)
The big picture: The House ended another workweek without a Speaker. Rep. Jim Jordan (R-OH) failed in numerous attempts to gain the necessary votes to become House Speaker, and so House Republicans will return to Washington next week to seek new candidates. Jordan entered the weekend falling short of the 217 votes required (or fewer based on absences/attendance) in votes on October 17, 18, and 20, when he won 200 votes, 199 votes, and 194 votes, respectively. Efforts to vote on granting Rep. Patrick McHenry (R-NC) additional powers as acting speaker stalled October 19 amid further disagreement within the Republican conference. Without a Speaker, the House can't advance legislation, including any approach to extending government funding and other programs beyond the November 17 expiration. Congress was also asked by the White House to pass two supplemental funding packages, for domestic priorities and national security. The national security request of more than $100 billion was submitted to Congress on October 20. Punchbowl reported October 19, "The White House is expected to roll out a domestic-focused supplemental funding package as soon as next week, centering on disaster relief, childcare and broadband. This will be separate from the national-security supplemental … "
Taiwan: The U.S.-Taiwan Expedited Double Tax Relief Act that was passed unanimously by the Senate Finance Committee in September was formally introduced in the Senate (S. 3084) October 19 by Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) and in the House (H.R. 5988) by Ways and Means Committee Chairman Jason Smith (R-MO) and Ranking Member Richard Neal (D-MA). The updated text reflects the Finance Committee's amendment to prevent double taxation on entertainment income and athletic activities, and some other changes. Politico reported this morning, "The goal, as it has seemed for a while, is for that legislation to pass as part of a year-end tax package, as one Finance aide told Morning Tax." The Senate Foreign Relations Committee July 13 approved the separate Taiwan Tax Agreement Act (S. 1457) to authorize the President to negotiate and enter into a tax agreement with Taiwan to relieve US and Taiwanese tax residents from double taxation. Senator Ben Cardin (D-MD), who serves on Foreign Relations, said at the time he hoped members of the two committees could reach a holistic approach given the importance of Taiwan to US business. Senator Cardin is now Foreign Relations Chairman and was reported in Tax Notes October 20 as saying he and Chairman Wyden decided they will try to advance both bills because they are compatible. "But the nature of each bill — one explicitly changing the tax code and the other a tax agreement — means they may need separate vehicles, Cardin said. 'Foreign Relations has a little bit easier time than Finance because we don't need a tax bill' to attach the fix to, according to Cardin … He suggested upcoming legislation aimed at addressing competition with China and end-of-year omnibus work as possible vehicles for the Foreign Relations Committee bill."
Global tax: Treasury Secretary Janet Yellen said October 16 that the US won't be ready by the end of 2023 to sign the new multilateral convention (MLC) on Pillar One of the OECD/G20 Inclusive Framework BEPS 2.0 project. While "much of the treaty has been agreed to … there are some matters that are important to the United States and other countries that remain unresolved," and these "need to be resolved before the treaty can be signed, so these processes will take into next year," Yellen said, as reported by Politico.
Energy tax: Treasury, IRS, and the Department of Energy announced October 19 that applications for the Low-Income Communities Bonus Credit program under IRC Section 48(e) of the Internal Revenue Code are now being accepted.
In an October 16 letter to Sec. Yellen, a group of Democratic senators led by Sheldon Whitehouse (D-RI) called for forthcoming guidance on the IRC Section 45V hydrogen tax credit to avoid "weak standards for what constitutes clean hydrogen." The letter said "45V must not be applied to hydrogen chemically derived from natural gas" nor "serve as yet another subsidy for the fossil fuel industry."
An EY Tax Alert, "IRS releases details on claiming IRC Section 45L credit for new energy-efficient homes," is available here.
An EY Tax Alert, "IRS releases guidance on transferring clean vehicle credits," is available here.
IRA guidance tracker: This table describes select IRS guidance related to the Inflation Reduction Act.
Date — Guidance
Link for more information
11/29/22 — Notice 2022-61, prevailing wage and apprenticeship requirements
started clock for construction 60 days after guidance: new requirements apply to facilities that begin construction on or after January 29, 2023
See EY Tax Alert 2022-1832
12/12/22 — Revenue Procedure 2022-42, EVs
agreements between manufacturers and Treasury regarding production of vehicles eligible for credit
See EY Tax Alert 2023-0076
12/19/22 — Notice 2023-06 provides guidance on the new sustainable aviation fuel (SAF) credits
primarily addresses the SAF credit requirements applicable to a qualified mixture
See EY Tax Alert 2022-1912
12/22/22 — Fact Sheet (FS-2022-40) on efficient home, residential credits
lists improvements eligible for credits, credit amounts, information on labor costs
See EY Tax Alert 2022-1935
12/27/22 — Notice 2023-2, stock buyback tax
rules and procedures for the 1% excise tax on the aggregate fair market value of stock repurchased by certain corporations
See EY Tax Alert 2023-0054
12/27/22 — Notice 2023-7, corporate alternative minimum tax (CAMT)
clarifies which corporations the CAMT applies to and how the alternative minimum tax is calculated
See EY Tax Alert 2023-0091
12/29/22 — FS-2022-42 on EV credits; Updated FS-2023-04, FS-2023-08
address how the credit applies to, defines qualified manufacturer; situations in which vehicle's classification changed; whether credit can be split among multiple owners
See EY Tax Alert 2023-0660
12/29/22 — Notice 2023-1, EV credits; modified by
definitions for new clean vehicles, critical mineral and battery component requirements
See EY Tax Alert 2023-0251
12/29/22 — White Paper on
critical mineral requirements
percentage must be extracted or processed in the US or a country with free trade agreement with US
12/31/22 — Notice 2023-9, IRC Section 45W, EVs
Safe harbor regarding the incremental cost of vehicles
See EY Tax Alert 2023-0076
2/13/23 — Notice 2023-17 Low-Income Communities Bonus Credit
applies to owners of solar and wind facilities in low-income communities that are eligible for the IRC Section 48 energy investment credit
See EY Tax Alert 2023-0333
2/13/23 — Notice 2023-18, 48C advanced energy
5/31/23 — Notice 2023-44
$10 billion in tax credits,
information on "energy communities census tracts"
See EY Tax Alert 2023-1012
2/17/23 — Notice 2023-20, interim guidance for insurance companies and others for the CAMT
determination of adjusted financial statement income for variable contracts, reinsurance, "fresh start" basis adjustment
See EY Tax Alert 2023-0384
3/9/23 — Notice 2023-24, nuclear credit (45J)
computing the credit, amount of unutilized NMCL, unutilized NMCL, transfer of credit to an "eligible project partner"
See EY Tax Alert 2023-0504
3/31/23 — Proposed regulations (REG-120080-22), EV credit
domestic sourcing requirements
See EY Tax Alert 2023-0660
4/4/23 — Notice 2023-29, "energy communities"
6/15/23 — Notice 2023-45
6/15/23 — Notice 2023-47, energy community bonus
for purposes of PTC under IRC Sections 45 and 45Y, ITC under IRC Sections 48 and 48E for electricity facilities;
Updates eligibility based on updated local unemployment rate data
See EY Tax Alert 2023-1083
5/12/23 — Notice 2023-38, domestic content bonus under IRC Sections 45, 45Y, 48, and 48E
how to categorize solar, wind and energy storage components for purposes of the manufactured products requirements
See EY Tax Alert 2023-0908
5/31/23 — Proposed regs (REG-110412-23) on Low-Income Communities Bonus Credit
definitions and requirements that would be applicable for the program allocating the calendar year 2023 capacity limitation
See EY Tax Alert 2023-1018
6/7/23 — Notice 2023-42, CAMT
waives addition to tax for a corporation's failure to make estimated tax payments of its CAMT
See EY Tax Alert 2023-1038
6/14/23 — Proposed regulations (REG-101610-23) on tax credit transferability
allows an eligible taxpayer to transfer all or a portion of an eligible credit to an unrelated transferee taxpayer for cash
See EY Tax Alert 2023-1103
6/14/23 — Proposed regulations (REG-101607-23) on direct pay
allows entities like tax-exempt organizations to treat credits as a payment against tax, rather than as a nonrefundable credit
See EY Tax Alert 2023-1102
6/15/23 — FAQs on energy communities
how areas may qualify as an energy community, whether a project is located in an energy community
See EY Tax Alert 2023-1083
6/29/23 — Announcement 2023-18, stock buybacks
taxpayers not required to report or pay excise tax on any tax return filed before regulations are published
See EY Tax Alert 2023-1166
8/10/23 — Final regulations (TD 9979) and Revenue Procedure 2023-27 on Low-income Communities Bonus Credit
implements bonus energy investment credit program for solar or wind facilities in low-income communities: information an applicant must submit, application review, obtaining an allocation
8/29/23 — Proposed regulations (REG-100908-23) on prevailing wage and apprenticeship requirements
satisfying requirements, correction payments to workers, penalties to IRS
See EY Tax Alert 2023-1469
9/12/23 — Notice 2023-64, CAMT
describes rules IRS intends on issues like the determination of a taxpayer's applicable financial statement
See EY Tax Alert 2023-1570
9/27/23 — Notice 2023-65, IRC Section 45L New Energy Efficient Home Credit
addresses eligibility, applicable amount of the credit, energy saving requirements, certification requirements, substantiation
See EY Tax Alert 2023-1741
10/6/23 — Proposed regulations (REG-113064-23) on transfer of EV credits, plus Revenue Procedure 2023-33
clarifies how taxpayers can elect to transfer new and previously owned clean vehicle credits to dealers who are eligible to receive advance payments of either credit. The revenue procedure includes procedures for how a dealer would register with the IRS to be eligible to receive the credit transfers from taxpayers and provides details on the registration process.
See EY Tax Alert 2023-1723
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