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25 October 2024 Report on recent US international tax developments - 25 October 2024 Five US House legislators, including the ranking member of the House Committee on Foreign Affairs, wrote an 18 October letter to the US Treasury Secretary and Secretary of State urging the Biden Administration to begin negotiations with Taiwan over a double taxation agreement. The letter requests that the Administration use its statutory authority to "lower these barriers to trade." The call to action is apparently a reaction to the stalled Tax Relief for American Families and Workers Act of 2024 (H.R. 7024). Among other things, the lagging legislation includes the United States-Taiwan Expedited Double-Tax Relief Act (H.R. 5988), which would provide double tax relief under the Internal Revenue Code and, separately, authorize the President to negotiate and enter into a tax agreement with Taiwan. In addition to the Taiwan-related measures, the broader bill would expand the Child Tax Credit and Low-Income Housing Credit and address the TCJA pre-cliffs, including IRC Section 174 five-year research-and-development amortization and IRC Section 163(j) interest deductibility, among others. H.R. 7024 originally passed the House on 31 January. The IRS this week announced the launch of their new passthrough field operations unit within the Large Business and International (LB&I) division "to more efficiently conduct audits of pass-through entities." According to a 22 October Information Release, the IRS also has begun examinations of 76 of the largest partnerships with average assets in excess of $10b. The partnerships under examination include hedge funds, real estate partnerships and publicly traded partnerships, among others. An earlier IRS announcement said one of the goals of the new passthrough field unit is to increase audit rates for complex and underexamined areas. An IRS official also provided some insight into the LB&I's corporate alternative minimum tax (CAMT) compliance campaign that was announced in December 2023. According to the official, the campaign is meant to collect information that will be used to develop processes to filter and review returns regarding the CAMT. The CAMT campaign has not yet resulted in any taxpayers being selected for audit, the official said. The Organisation for Economic Co-operation and Development (OECD) on 24 October released a Tax Report that was provided to G20 Finance Ministers and Central Bank Governors ahead of their final meeting of the Brazilian G20 Presidency on 23-24 October. According to the report, the remaining focus for BEPS Pillar One will be on reaching consensus on Amount B and its elective approach. Amount B is intended to simplify and streamline the application of the arm's-length principle to baseline marketing and distribution activities, with a particular focus on the needs of low-capacity countries (the so-called Amount B approach). The G20 communique released at the conclusion of the meeting called for the OECD Inclusive Framework "to expeditiously complete the negotiations on a final package on Pillar One by resolving the remaining issues on a framework for Amount B and allowing the Multilateral Convention (MLC) to be finalized and opened for signing as soon as possible." An EY Global Tax Alert is pending.
Document ID: 2024-1966 | ||||