June 9, 2023
Report on recent US international tax developments — 9 June 2023
Republican House Ways and Means Committee members are expected to soon release proposals that would address certain TCJA tax provisions (among others), with a committee markup of the bill possibly the week of 12 June. According to press reports, the measures will include restoring R&D expensing in place of the IRC Section 174 R&D five-year amortization requirement, the prior-law calculation for the IRC Section 163(j) interest deduction limitation, and the bonus depreciation phasedown.
Treasury and the IRS on 7 June released Notice 2023-42, providing penalty relief for corporations that did not pay estimated tax in regard to the new 15% corporate alternative minimum tax (CAMT) enacted by the Inflation Reduction Act. According to an IRS press release, the government has taken into consideration the "challenges" in determining CAMT liability as well as whether or not an applicable corporation is subject to the CAMT.
The IRS is planning to issue additional guidance regarding US inbound and outbound intellectual property (IP) transfers that will address issues not covered in recent proposed regulations. Treasury and the IRS issued proposed regulations on 2 May that would apply new rules to "repatriations" of IP subject to IRC Section 367(d). In certain circumstances, the proposed regulations would permit the annual inclusions that IRC Section 367(d) and its regulations require, to cease. An IRS official this week was quoted as saying there will be "subsequent packages" or rules, one or more of which will relate to IRC Section 367(d). The official did not offer a timeline.
President Biden has nominated Marjorie Rollinson to be the next IRS Chief Counsel, one of only two IRS positions requiring Senate confirmation. Rollinson spent most of her career at EY, retiring as EY Deputy Director of National Tax, and has held several senior positions at the IRS including Associate Chief Counsel (International).
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (United States), International Tax and Transaction Services, Washington, DC
Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor