The US Treasury of 29 October announced it will shortly begin negotiations for a comprehensive tax agreement with Taiwan. The American Institute in Taiwan, which carries out US relations with Taiwan, and the Taipei Economic and Cultural Representative Office in the United States will begin negotiations on the agreement. The Treasury release specifically noted that a tax agreement with Taiwan will support US efforts to bolster the semiconductor industry and supply chains. The future text is expected to be based on the US Model Tax Treaty.

Congress has indicated its concern over the lack of a double taxation agreement with Taiwan. The stalled Tax Relief for American Families and Workers Act of 2024 (H.R. 7024) 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.

The IRS on 22 October announced (IR-2024-276) that the new passthrough field operations unit has "officially started work in [the] Large Business and International (LB&I) division" in an effort to more efficiently audit passthrough entities. The new unit, announced last year, is specifically devoted to assuring compliance of passthrough entities of all sizes and type, including partnerships, S corporations and trusts.

On 29 October, the IRS also announced (IR-2024-284) it has picked former EY Principal, Jeff Erickson as the first Associate Chief Counsel to lead the newly created Passthroughs, Trusts and Estates office. Expected to begin the new role in January 2025, Erickson will coordinate and direct the activities of the office and oversee legal advisory services that support the uniform interpretation, application, enforcement and litigation of tax laws involving partnerships, S corporations, trusts and estates.

The IRS in Notice 2024-78 this week announced the extension of temporary Foreign Account Tax Compliance Act (FATCA) relief for foreign financial institutions (FFIs) to report US Taxpayer Identification Numbers (TINs) in Model 1 Intergovernmental agreement jurisdictions. Notice 2024-78 extends the temporary relief in Notice 2023-11 (for tax years 2022 - 2024) for certain FFIs required to report US TINs "for certain preexisting accounts (as defined in an applicable Model 1 intergovernmental agreement)" through 2027 so long as certain requirements are met.

Treasury and IRS officials this week said the government is considering substantive changes to the proposed corporate alternative minimum tax (CAMT) regulations that were released in September, and they are considering some of the policy choices affecting mergers and acquisitions as well as some other amendments. A senior Treasury official was quoted as saying the final rules will "definitely flesh out a bit" rules addressing income inclusions when a subsidiary is sold or spun-off.

An IRS official indicated the government is also putting together a CAMT technical corrections package. Among the issues to be addressed will be certain examples in the proposed regulations that do not accurately reflect the underlying rules.

And a senior IRS official this week was quoted as recommending that Article 25 in the Organisation for Economic Co-operation and Development (OECD) Model Tax Treaty be expanded in scope to provide mutual agreement procedure (MAP) access beyond the parent company. According to the official, Article 25 should be broadened to situations in which the parent company's tax base is affected by a subsidiary's tax position in another jurisdiction. The official conceded, however, that this would significantly expand the burden on tax administrations.

An OECD official this week said the Inclusive Framework (IF) is in "very active discussion" that will continue into November with regard to Base Erosion and Profit Sharing Pillar Two permanent safe harbors, reportedly based on the transitional country-by-country reporting (CbCR) safe harbor. The transitional CbCR Safe Harbor is a temporary provision to ease the administrative burden for companies; the framework simplifies the determination of whether top-up taxes may apply in a specific jurisdiction with less-extensive calculations than the full Global Anti-Base Erosion (GloBE) rules.

According to the official, the IF is also discussing GloBE administrative guidance on the allocation of the substance-based income exclusion for mobile assets and deferred tax accounting for foreign tax credits, as well as adjustments after a financial period closes. Further, the IF is considering additional anti-arbitrage rules and related benefits that would support the GloBE framework. Dispute prevention and resolution are other areas under review, the official said.

The OECD is also planning soon to release an updated GLoBE information return template and XML schema that will provide the format for information exchange among tax administrations.