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December 8, 2023
2023-2023

U.S. Tax This Week for December 8

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

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Top of the Week

Proposed regulations on conservation contributions clarify when charitable contributions by partnerships and S corporations would be disallowed, increase reporting requirements

In proposed regulations (REG-112916-23), the Treasury Department and IRS clarify when a tax deduction for a qualified conservation contribution made by a partnership or an S corporation is disallowed. The proposed regulations include definitions, methods to calculate the relevant basis of the contribution, statutory exceptions to the statutory disallowance rule. The proposed regulations also would also implement increased reporting requirements for all in-kind donations, including qualified conservation contributions. EY Tax Alert 2023-1976 has details.

IRS rules that restructuring will not result in credit recapture

In PLR 202347009, the IRS ruled that a proposed transaction in which a consolidated group is restructured will not result in any credit recapture under IRC Section 50I.This ruling shows the IRS is amenable to issuing rulings on investment tax credit (ITC) deals for companies considering moving tax equity investments around within their consolidated group to optimize their structure without the tax credits being recaptured. EY Tax Alert 2023-1998 has details.

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Upcoming Webcasts

Accounting for income taxes: A quarterly perspective (December 12)
During this EY Webcast, a panel of experienced EY professionals will address developments and issues in accounting for income taxes.

Spotlight on BEPS 2.0: Developments and practical implications for US MNEs (December 13)
Jurisdictions are enacting and proposing legislation implementing the Pillar Two rules developed under the Organisation for Economic Co-operation and Development/G20’s project on addressing the tax challenges of the digitization of the economy (BEPS 2.0). 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. Join this EY Webcast 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).

Tax in a time of transition: Legislative, economic, regulatory and IRS developments (December 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; and (iii) breaking developments.

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Recent Tax Alerts

Courts

— Dec 07: Tax Court addresses limited partner exception for purposes of self-employment tax (Tax Alert 2023-2013)

Internal Revenue Service

— Dec 06: IRS revises process for requesting tax-exempt organization documents (Tax Alert 2023-2009)

— Dec 04: IRS rules that restructuring will not result in credit recapture (Tax Alert 2023-1998)

International

— Dec 08: Brazil announces new online visa application system for nationals of Australia, Canada and the US (Tax Alert 2023-2021)

— Dec 08: EU Council proposes simpler residence requirement for long-term resident status applicants (Tax Alert 2023-2022)

— Dec 08: New Zealand Government reinstates bill introducing Pillar Two rules, following General Election (Tax Alert 2023-2019)

— Dec 08: Canadian government releases proposed changes for applying GST/HST to joint ventures (Tax Alert 2023-2017)

— Dec 07: Denmark passes Pillar Two (Tax Alert 2023-2014)

— Dec 07: Canada's significant changes to alternative minimum tax will affect taxpayers in 2024 (Tax Alert 2023-2012)

— Dec 06: Ecuadorian President proposes new tax bill, expected to be effective by year-end (Tax Alert 2023-2008)

— Dec 07: Hong Kong introduces bill to enhance aircraft leasing preferential tax regime (Tax Alert 2023-2006)

— Dec 06: UK announces five-point plan to curb abuse of the immigration system (Tax Alert 2023-2004)

— Dec 05: Switzerland publishes updated vacancy reporting requirement for employers (Tax Alert 2023-2003)

— Dec 05: Canadian Bill C-59 to implement Budget 2023 and other measures receives first reading (Tax Alert 2023-2002)

— Dec 04: Colombia issues regulations on Significant Economic Presence (Tax Alert 2023-1997)

— Dec 05: Expired Portuguese permits and visas automatically extended until 30 June 2024 (Tax Alert 2023-1995)

— Dec 05: Sweden's certification process for expedited processing of work permit applications to end on 15 December 2023 (Tax Alert 2023-1994)

— Dec 01: Switzerland to retain work permit quotas for EEA, UK and third-country nationals in 2024 (Tax Alert 2023-1983)

— Dec 01: China implements new visa-free policy for nationals of France, Germany, Italy, Malaysia, the Netherlands and Spain (Tax Alert 2023-1982)

— Dec 01: Turkiye removes right to deduct import VAT calculated due to certain trade policy measures (Tax Alert 2023-1979)

— Dec 01: Finland closes last crossing point on land border with Russia (Tax Alert 2023-1977)

— Dec 01: Canada's new reporting rules for digital platform operators take effect 1 January 2024 (Tax Alert 2023-1975)

— Dec 01: European Commission announces €4b funding call under the EU Innovation Fund for net-zero tech innovation projects (Tax Alert 2023-1973)

Legislation

— Dec 06: What to expect in Washington (December 6) (Tax Alert 2023-2007)

States

— Dec 07: Ohio Board of Tax Appeals denies CAT agency exclusion absent written contract authorizing company to act as agent (Tax Alert 2023-2020)

— Dec 06: Colorado announces new definition of taxable wages for paid family and medical leave insurance (Tax Alert 2023-2005)

— Dec 04: Minnesota Supreme Court rules gain on sale of goodwill is apportionable business income (Tax Alert 2023-2000)

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IRS Weekly Wrap-Up

Proposed Regulations

 REG–132422–17Income and Currency Gain or Loss With Respect to a Qualified Business Unit; Correction
 REG–132422–17Revising Consolidated Return Regulations To Reflect Statutory Changes, Modernize Language, and Enhance Clarity; Correction
 REG–118492–23Section 30D Excluded Entities

Revenue Procedures

 2023-4126 CFR 601.201: Rulings and determination letters
 2024-8Qualified Mortgage Bonds – Qualified Census Tracts

Notices

 2023-792023 Required Amendments List for Individually Designed Qualified and Section 403(b) Plans

Internal Revenue Bulletin

 2023-49Internal Revenue Bulletin of December 4, 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.

 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

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