October 27, 2023
U.S. Tax This Week for October 27
Ernst & Young's U.S. Tax This Week newsletter for the week ending October 27 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 data migration and management services company is not engaged in consulting for IRC Section 1202 gain exclusion purposes
In PLR 202342013, the IRS ruled that a company providing data migration and management services to businesses is not engaged in a trade or business providing consulting services under IRC Section 1202(e)(3)(A). As a result, assuming all other requirements were met, the taxpayer would be eligible for the applicable exclusion under IRC Section 1202 upon selling the company's stock. EY Tax Alert 2023-1773 has details.
Final regulations on supporting organizations modify proposed regulations
The Treasury Department and IRS have released final regulations (TD 9981) on gifts or contributions to Type I and Type III supporting organizations from donors that control their supported organizations. The final regulations also address certain other requirements for Type III organizations, such as (1) meeting the Type III responsiveness test, (2) qualifying as a functionally integrated Type III supporting organization (including a definition of a governmental supported organization), and (3) the required annual distributions by non-functionally integrated Type III supporting organizations. EY Tax Alert 2023-1772 has details.
EY Guides and Publications
Tax M&A Update for September 2023
Tax M&A Update is a monthly newsletter that provides a summary of developments in the marketplace, leading technical developments, and other thought leadership notes in the area of mergers and acquisitions (M&A) taxation and general corporate taxation. Highlights of this edition include (i) no modification for debt of DRE that becomes a corporation; (ii) additional CAMT guidance; and (iii) R&E amortization guidance.
QUEST Economic Update highlights key US and global economic trends - October 20, 2023
EY's Quantitative Economics and Statistics (QUEST) group has developed the attached publication summarizing the latest key economic and employment trends in a short, easy-to-read format. Developments such as growth trends in US gross domestic product (GDP), US employment and Federal Reserve activity are highlighted, as are economic trends outside the United States that may affect US businesses.
Crypto and digital asset information reporting: Navigating the operational challenges of the recently proposed regulations (November 1)
The proposed regulations issued by the IRS and Treasury Department introduce new standards unlike any seen previously in the digital asset space. From traditional financial institutions to decentralized exchanges, firms across the industry will need to determine how the new regulatory requirements impact any existing processes and technology, from customer onboarding to reporting. During this EY Webcast, Ernst & Young professionals will discuss operational challenges, implementation considerations, and maintaining a seamless client experience in the dynamic digital asset sector.
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.
Tax considerations for asset managers and their families: The individual year-end tax matters you need to know (November 9)
Asset managers and high-income earners have been making tax headlines in the past year with recent tax court filings, IRS enforcement efforts and more. During this EY Webcast, Financial Services Private Tax professionals will share insights on key tax developments and what they might mean for asset managers and their family offices.
International tax talk quarterly series with the EY Global Tax Desk Network (November 14)
During this EY Webcast, part of an ongoing series, a panel of experienced EY professionals will provide you with information on major tax law changes in the countries and jurisdictions covered by our US-based Global Tax Desk Network.
Tax in a time of transition: Legislative, economic, regulatory and IRS developments (November 17)
Companies need to keep pace with a tax and economic environment in transition. This requires understanding tax policy trends and anticipating future developments that could impact their operations. Please join this EY webcast 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 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.
Recent Tax Alerts
Internal Revenue Service
— Oct 20: IRS incorporates temporary e-signature rules into Internal Revenue Manual (Tax Alert 2023-1759)
— Oct 27: Hong Kong Chief Executive announces several upcoming immigration changes (Tax Alert 2023-1794)
— Oct 27: Germany to lower reporting thresholds for energy and electricity tax subsidies (Tax Alert 2023-1792)
— Oct 27: Chilean Congress asked to approve double tax treaty with United States (Tax Alert 2023-1791)
— Oct 26: India resumes processing Business and Conference Visa applications from Canadian nationals (Tax Alert 2023-1785)
— Oct 26: Canada launches pilot program to streamline work permit processing for Canadian employers recruiting in the Philippines (Tax Alert 2023-1783)
— Oct 26: Canadian High Commission provides update on visa processing delays in India (Tax Alert 2023-1784)
— Oct 26: Turkiye increases additional customs duty rates on textile industry (Tax Alert 2023-1779)
— Oct 25: India's Supreme Court rules 'notification' mandatory to invoke Most Favored Nations clause in India's tax treaties (Tax Alert 2023-1776)
— Oct 24: UK announces increase in Immigration Health Surcharge expected to go into effect on 16 January 2024 (Tax Alert 2023-1769)
— Oct 24: Italy publishes work permit quotas for 2023 until 2025 (Tax Alert 2023-1768)
— Oct 24: Ethiopia issues a Directive to regulate the opening and operations of offshore foreign-exchange accounts (Tax Alert 2023-1766)
— Oct 24: EU adopts Directive introducing tax transparency rules for crypto assets (DAC8) (Tax Alert 2023-1765)
— Oct 20: U.S. Department of Homeland Security announces commencement of visa-free travel for Israelis (Tax Alert 2023-1758)
— Oct 20: Qatar removed from EU ‘grey list’ (Tax Alert 2023-1755)
— Oct 20: Colombia introduces new citizenship regulations (Tax Alert 2023-1754)
— Oct 20: Mauritian Finance Minister issues new regulations on e-invoicing (Tax Alert 2023-1752)
— Oct 20: OECD Forum on Tax Administration agrees on action to support continued digital transformation, delivering Pillar Two and capacity building (Tax Alert 2023-1751)
— Oct 25: What to expect in Washington (October 27) (Tax Alert 2023-1793)
— Oct 25: New Mexico tax department proposes rules clarifying when receipts from digital advertising services are taxable (Tax Alert 2023-1796)
— Oct 25: Minnesota law prohibits inquiries into applicants' pay history starting in 2024 (Tax Alert 2023-1774)
— Oct 24: Maryland provides guidance for on-demand pay products (Tax Alert 2023-1767)
State and Local Tax Weekly
Highlights of this edition include:
— Massachusetts governor signs bill that adopts single sales factor apportionment, reduces short-term capital gains tax rate, makes other tax changes On Oct. 4, 2023, Massachusetts Governor Maura Healey signed into law H. 4104, a $951 million tax package containing various tax changes affecting businesses and individuals.
— North Carolina budget bill includes various business and individual tax changes North Carolina's budget bill, HB 259, which includes business and individual tax changes, became law without the governor's signature on Oct. 3, 2023.
— Income/Franchise, Sales & Use, Business Incentives, Property Tax, Controversy, Payroll & Employment Tax, Miscellaneous Tax, Unclaimed Property, Value Added Tax, Unclaimed Property
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.