Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

September 24, 2021

Report on recent US international tax developments 24 September 2021

The White House and House and Senate Democratic leaders this week tried to navigate a path forward on the massive House-passed budget reconciliation bill that must be whittled down to address the concerns of Democratic moderates. In a letter to House Democrats on 20 September, House Speaker Nancy Pelosi wrote that they “must be prepared for adjustments” to the package. House Majority Leader Steny Hoyer on 21 September was quoted as saying, “If the Senate can’t do $3.5 trillion, we’ve got to see what they can do.”

In an attempt to bring the parties together, President Joe Biden met on 22 September with Congressional Democratic leaders and others, including Senator Joe Manchin, who said the President asked that moderates come up with a top line budget reconciliation number that they could support. The next day, Senate Majority Leader Chuck Schumer announced during a press conference with Speaker Pelosi that, “The White House, the House, and the Senate have reached an agreement on a framework that will pay for any final negotiated agreement. So, the revenue side of this, we have an agreement on.” The framework reportedly will use the Ways and Means Committee’s tax proposal reported out of committee, including international tax provisions, along with select Senate proposals that were not included in the House package.

Senator Schumer later called the deal a “menu of options.” A top line spending number has not been agreed to, and that will determine how much tax revenue is needed and which options are included in a compromise bill. The spending and tax plans are still under discussion with moderate Democrats, whose support will greatly influence the final package.

In the background is Speaker Pelosi’s commitment to moderate House Democrats to hold a vote on the Senate-passed US$1 trillion infrastructure package on 27 September. Progressive Democrats continue to say they want a final deal on reconciliation before they will vote for the infrastructure bill.

The Director of the Internal Revenue Service Advance Pricing and Mutual Agreement (APMA) this week warned taxpayers from accepting unilateral relief by treaty partner jurisdictions, and said that taxpayers should instead stick with bilateral mutual agreement procedures. The Director was quoted as saying that companies accepting unilateral deals may not end up with full relief from double taxation, suggesting it may be considered a failure to exhaust all available remedies and result in denial of creditability of foreign taxes paid in the jurisdiction.

The Director also reiterated earlier comments that taxpayers need to cite more than general economic trends related to COVID to justify a change in the terms in an advance pricing agreement (APA). He said that the APMA program and their foreign counterparts have been able to come to mutually agreeable results when the taxpayer has shown that the pandemic has indeed changed the circumstances affecting the terms of an APA.


For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (United States), International Tax and Transaction Services, Washington, DC


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.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more