Tax News Update    Email this document    Print this document  

This Week (July 1 - 5)

Congress: The House is out this week, and the Senate remains out for a second week, for the Independence Day recess.

Last Week (June 24 - 28)

Congress: The Bloomberg Daily Tax Report (DTR) June 28 reported on plans for the House Ways & Means Committee Republican Tax Teams announced in April to hold public-facing meetings across the country and deliver recommendations. "Republican lawmakers are hitting the road this summer to meet with businesses and members of the public, as they endeavor to lay the groundwork for legislation to address the expiration of much of the 2017 GOP tax law … " the report said. "The locations for public meetings on topics ranging from global tax to working families are being finalized but will likely include California's Silicon Valley, Atlanta, Pennsylvania, and Virginia, lawmakers who spoke to Bloomberg Tax said. The events are slated to happen throughout the summer." A previous report cited Rep. Kevin Hern (R-OK), who chairs the Ways & Means global competitiveness tax team, as saying while at the OECD USCIB Tax Conference June 25 that his group would hold an August 8 meeting with stakeholders in Atlanta and (likely later this year) "come out with a white paper with what we've learned."

Separately, the Ways & Means Committee may hold a July 9 markup, following the Independence Day recess, to consider legislation related to campus protests and 529 education plans, Punchbowl News reported.

Debate: The CNN debate between former President Trump and President Biden June 27 touched on tax and other policy areas among many other issues. Asked to justify plans to extend TCJA individual and pass-through provisions that expire at the end of 2025 and further reduce taxes, potentially resulting in "top earners and corporations [paying] even less in taxes than they do now," former President Trump said, "Because the tax cuts spurred the greatest economy that we've ever seen just prior to COVID, and even after COVID. It was so strong that we were able to get through COVID much better than just about any other country." He further highlighted the TCJA corporate tax rate reduction to 21% — which doesn't expire at the end of 2025 but is already part of the conversation about paying for provisions that do expire — and said, "we took in more revenue with much less tax and companies were bringing back trillions of dollars back into our country. The country was going like never before. And we were ready to start paying down debt." Then, he said, "We got hit with COVID."

President Biden focused on the cost of the TCJA. "He had the largest tax cut in American history, $2 trillion. He raised the deficit larger than any president has in any one term … " he said of President Trump. "He got a two trillion-dollar tax code, benefited the very wealthy. What I'm going to do is fix the taxes," including by increasing taxes on billionaires. Biden further said of Trump, "Now you want a new tax cut of $5 trillion over the next ten years, which is going to fundamentally bankrupt the country." Former President Trump drew contrasts with President Biden on tax and trumpeted the benefits of the TCJA. "He wants to raise your taxes by four times. He wants to raise everybody's taxes by four times. He wants the Trump tax cuts to expire so everybody, including the two of you are going to pay four to five times … " Trump said. "All my life I'd grow up and I'd see politicians talking about cutting taxes. When we cut taxes, as I said, we did more business … and all these companies, they were bringing money back into our country."

Global tax: At the annual OECD USCIB Tax Conference in Washington this week, focused on OECD tax policy developments and business interaction, US Treasury officials continued to call for Amount B of Pillar One, which was intended to simplify and streamline the application of the arm's-length principle to in-country baseline marketing and distribution activities, to be mandatory and linked to Amount A. Aviva Aron-Dine, Acting Assistant Treasury Secretary for Tax Policy, said the Department is focused on closing gaps that remain on Amount B and believes it should remain linked with Amount A. An optional version of Amount B is understandable as an initial phased approach but to achieve the promised tax certainty of Pillar One it will ultimately need to apply broadly and without option, she said. Scott Levine, Acting Deputy Assistant Treasury Secretary (International Tax Affairs), said the primary deliverables for Pillar One are the removal of digital services taxes (DSTs) in response to Amount A and the mandatory application of Amount B. Officials have long cited a robust and mandatory Amount B among conditions for the United States to sign on to a Multilateral Convention (MLC).

Also, at the USCIB conference, Rep. Hern criticized the OECD-led global tax agreement as leaving the United States at a competitive disadvantage, Tax Notes reported. "No matter how you change the rules, multinational businesses and market jurisdictions will find a way to play the game to their advantage," he said. "I'm concerned that the U.S. is not equipped to play the game as the rules are currently written."

Stock buyback excise tax: On June 28, Treasury and IRS released final regulations (TD 10002) regarding the reporting and payment of the excise tax on repurchases of corporate stock.

Digital assets: On June 28, Treasury and IRS released final regulations on the Infrastructure Investment and Jobs Act's (IIJA) reporting requirements for brokers of digital assets. "The final regulations announced will require brokers to report gross proceeds on the sale of digital assets beginning in 2026 for all sales in 2025," Treasury said in a news release. "Brokers will be required to also report information on the tax basis for certain digital assets beginning in 2027 for sales in 2026."

Energy tax: An EY Alert, "Final regulations on prevailing wage and apprenticeship requirements provide more details for taxpayers seeking bonus renewable energy tax credits," is available here.

IRA guidance tracker: This list describes select IRS guidance related to the Inflation Reduction Act (IRA).

CAMT

• April 15, 2024 — Notice 2024-33 waived the penalty for a corporation's failure to pay estimated tax CAMT payments due on or before April 15, 2024, or May 15, 2024
• December 15, 2023 — Notice 2024-10 included rules for determining the adjusted financial statement income (AFSI) of a U.S. Shareholder when a controlled foreign corporation (CFC) pays a dividend to the US shareholder or another CFC
• September 12, 2023 — Notice 2023-64 included rules for consolidated groups and foreign corporations
• June 7, 2023 — Notice 2023-42 granted penalty relief for corporations that do not pay estimated tax in connection with the CAMT
• February 17, 2023 — Notice 2023-20 provided interim CAMT guidance for insurance companies
• December 27, 2022 — Notice 2023-7 addressed issues regarding IRC subchapters C and K, "troubled corporations," groups of corporations that file consolidated returns, depreciation of IRC Section 168 property, and the treatment of federal income tax credits under the CAMT

Stock buyback excise tax

• April 9, 2024 - Proposed regulations (REG-115710-22) that, among other things, would impose the excise tax on many ordinary course intercompany funding transactions, including distributions, between US subsidiaries and a foreign parent unless the taxpayer can assert the transactions did not have a principal purpose of funding a stock buyback by the foreign parent
• June 28, 2024 — Final regulations (TD 10002) regarding the reporting and payment of the excise tax on repurchases of corporate stock

Domestic Content Bonus

• May 16, 2024 — Notice 2024-41 expands list of Applicable Projects to include hydropower

EVs

• May 3, 2024 — Final rules (TD 9995) on clean vehicle credits under IRC Sections 25E and 30D, transfer of credits, critical minerals and battery components, and foreign entities of concern

Sustainable Aviation Fuel

• April 30, 2024 — Notice 2024-37 provides guidance and safe harbors using the 40BSAF-GREET 2024 model

Transferability

• April 25, 2024 — Final regulations (TD 9993) describing rules and definitions for the transfer of eligible credits in a taxable year, including specific rules for partnerships and S corporations

Direct pay

• March 5, 2024 — Final regulations (TD 9988) include rules for the elective payment of credit amounts, including definitions and special rules applicable to partnerships and S corporations and regarding repayment of excessive payments

Alternative Fuel Vehicle Refueling Property Credit

• January 19, 2024 — Notice 2024-20 provides guidance on eligible census tracts

IRC Section 45V clean hydrogen credit

• December 22, 2023 — Proposed regulations (REG-117631-23) include definitions of key terms in the statute, including lifecycle greenhouse gas emissions, qualified clean hydrogen, and qualified clean hydrogen production facility

IRC Section 45X Advanced Manufacturing Production Credit

• December 14, 2023 — Proposed regulations (REG-107423-23) clarifying definitions and confirm credit amounts for eligible components, including solar and wind energy components, inverters

IRC Sections 45Y, 48E clean electricity credits

• May 29, 2024 - Proposed regulations (REG-119283-23) on greenhouse gas emission rates

IRC Section 45Z Clean Fuel Production Credit

• May 31, 2024 — Notice 2024-49 on registration requirements

Low-income Communities Bonus Credit

• August 10, 2023 — Final regulations (TD 9979) and Revenue Procedure 2023-27 provide guidance necessary to implement the Program, including, in relevant part, information an applicant must submit, the application review process, and the manner of obtaining an allocation

Advanced Energy Project Credit

• February 13, 2023 — Notice 2023-18, first allocation round (Round 1), which began on May 31, 2023, $4 billion of qualifying advanced energy project credits
• April 29, 2024 — Notice 2024-36 for owners of clean energy manufacturing and recycling projects, greenhouse gas emission reduction projects and critical material projects, announcing the second round of credit allocations for the program to allocate the remaining $6 billion credits
• May 22 — IR-2024-144 announced that the DOE Qualified Advanced Energy Project Credit Program Applicant Portal (IRC Section 48C Portal) is open for any applicants to register for a new round of allocations

IRC Section 48 ITC

• November 17, 2023 — Proposed regulations (REG-132569-17) update types of energy property eligible for the energy credit, requirements and rules generally applicable to energy property

IRC Section 45L Energy Efficient Home Credit

• September 27, 2023 - Notice 2023-65 addresses: person eligible for the credit, determining the applicable credit amount, energy saving, certification and substantiation requirements

Wage and apprenticeship

• June 18, 2024 — Final regulations (TD 9998) providing employers and workers with more clarity on what's required for recordkeeping, and employers to adopt worker-centric practices like project labor agreements

Energy Community Bonus Credit

• June 15, 2023 — Notice 2023-45, guidance for purposes of the production tax credit (PTC) under IRC Sections 45 and 45Y and the investment tax credit (ITC) under IRC Sections 48 and 48E for electricity facilities
• June 7, 2024 — Notice 2024-48 publishes lists of information that taxpayers may use to determine whether they meet certain requirements under the Statistical Area Category or the Coal Closure Category as described for purposes of qualifying for energy community bonus credit amounts or rates under IRC Sections 45, 45Y, 48, and 48E

IRC Section 45J Nuclear Credit

• March 9, 2023 — Notice 2023-24 provides guidance for computing credit, amount of unutilized NMCL, apply for and allocating unutilized NMCL, and transfer to "eligible project partner"

CHIPS Act IRC Section 48D Advanced Manufacturing Investment Credit

• March 21, 2023 — Proposed regulations (REG-120653-22) address the eligibility requirements, including defining what constitutes an eligible taxpayer, qualified property and an advanced manufacturing facility
• March 5, 2024 — Final regulations (TD 9989) on direct pay