In this section, we provide a summary of brief updates from the previous quarter on legislative, judicial, and administrative developments in tax that may impact Japanese companies operating in the United States.
Initial impressions of draft rules for tax base determinations under Pillar One Amount A
February 18, 2022
The Organisation for Economic Cooperation and Development (OECD) today issued a release seeking comments on a public consultation document [PDF 1MB] setting out draft rules for tax base determinations under Amount A of Pillar One—part of the ongoing work of the OECD/G20 Inclusive Framework on base erosion and profit shifting (BEPS) in implementing the two-pillar solution to address the tax challenges arising from the digitalisation of the economy.
California: “Unprotected” activities resulting in internet sellers losing P.L. 86-272 protection clarified
February 16, 2022
The California Franchise Tax Board (FTB) issued a Technical Advice Memorandum—TAM 2022-01 [PDF 97 KB] (February 14, 2022)—addressing whether the protections of Public Law (P.L.) 86-272 apply to fact patterns that are common in the current economy due to “technological advancements.”
United States and Japan reach tariff agreement on steel products under Section 232
February 8, 2022
The United States and Japan released a joint statement announcing a new “232 tariff agreement” to allow historically-based sustainable volumes of Japan’s steel products to enter the U.S. market without the application of Section 232 tariffs.
United States and Japan reach tariff agreement on steel products under Section 232 (PDF)
Year-in-review list of U.S. federal tax developments for 2021 (as reported in TaxNewsFlash)
February 8, 2022
KPMG LLP has compiled an easy-to-use list of many recent federal tax developments to help users quickly identify what happened in 2021 in the federal tax arena.
Delaware: Unclaimed property, voluntary disclosure agreement invitations to be mailed for 2022
February 7, 2022
Letters will be mailed to companies inviting them to join the state’s unclaimed property voluntary disclosure agreement program
Rev. Proc. 2022–14: List of automatic changes, accounting methods
January 31, 2022
The IRS today released an advance version of Rev. Proc. 2022-14 providing an updated list of automatic changes to which the automatic change procedures of Rev. Proc. 2015-13 (as clarified and modified by subsequent revenue procedures) apply.
Regulations addressing tax treatment of U.S. partnerships and S corporations that own stock of CFCs and PFICs
January 28, 2022
Initial impressions and observations about regulations addressing tax treatment of U.S. partnerships, S corporations that own stock of CFCs and PFICs
Certain states currently accepting Form 1099-NEC under CF/SF program
January 24, 2022
The updated version of Publication 1220 issued by the IRS in the fall of 2021 included a noteworthy change—the inclusion of Form 1099-NEC into the “Combined Federal State Filing” (CF/SF) program.
U.S. tax season starts January 24, 2022; most individual returns due April 18, 2022
January 10, 2022
The IRS today announced that the “tax season” for individual taxpayers will start January 24, 2022, at which time the IRS will begin accepting and processing individual income tax returns for 2021.
Initial analysis of final regulations concerning foreign tax credit
January 5, 2022
Final regulations released in late December 2021 and published yesterday (January 4, 2022) in the Federal Register relate primarily to the determination of the foreign tax credit (FTC) and the allocation and apportionment of deductions (including foreign income taxes) in determining the FTC limitation.
KPMG report: Initial analysis of final regulations concerning foreign tax credit (PDF)
Outline of measures in IBOR final regulations
December 31, 2021
The U.S. Treasury Department and IRS late yesterday released for publication in the Federal Register final regulations (T.D. 9961) concerning the tax consequences of the transition away from the use of certain “interbank offered rates” (IBOR) in debt instruments, derivative contracts, and other contracts.
Initial analysis of Pillar Two model rules for global minimum tax under OECD/G20 Inclusive Framework
December 22, 2021
The OECD/G20 Inclusive Framework on base erosion and profit shifting (BEPS) on 20 December 2021 released a report of model rules—the “Global Anti-Base Erosion” (GloBE) rules—under Pillar Two.
R&E changes from TCJA effective for tax years beginning after December 31, 2021
December 22, 2021
The “Tax Cuts and Jobs Act” (TCJA)—signed into law on December 22, 2017—includes certain research and experimentation (R&E) measures that have a delayed effective date. The measures are scheduled to take effect for tax years beginning after December 31, 2021.
R&E changes from TCJA effective for tax years beginning after December 31, 2021 (PDF)
IRS releases five practice units, covering topics including BEAT and foreign tax credit
December 14, 2021
The IRS Large Business and International (LB&I) division today publicly released five “practice units”—part of a series of IRS examiner “job aides” and training materials intended to describe for IRS agents leading practices about tax concepts in general and specific types of transactions.
FBAR filings: Deadline extended once again—to April 15, 2023—for certain individuals with signature authority
December 13, 2021
The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a notice extending the filing date for the “Report of Foreign Bank and Financial Accounts (FBAR)” for certain individuals who have only signature or other authority over certain foreign financial accounts to April 15, 2023.
Legislative update: Senate Finance releases revised text of “Build Back Better Act”
December 12, 2021
U.S. Senate Finance Committee Chairman Ron Wyden (D-OR) on December 11, 2021, released updated legislative text related to the "Build Back Better Act."
Financial statement and potential U.S. GAAP implications of tax proposals in “Build Back Better Act”
December 3, 2021
The “Build Back Better Act” (BBBA) was passed by the U.S. House of Representatives on November 19, 2021, and while the bill is still pending consideration by the Senate (and thus is not yet final), it may be time to consider potential implications of the tax proposals in the BBBA for financial statement and potential U.S. GAAP purposes.
Rev. Procs. 2021-48, 2021-49, 2021-50: Tax treatment of PPP loan forgiveness; partnership allocations and stock basis adjustments
November 18, 2021
The IRS today released advance versions of three revenue procedures concerning the federal income tax treatment of Paycheck Protection Program (PPP) loan forgiveness (referred to as “tax-exempt income”) and amounts received under other coronavirus (COVID-19) pandemic-relief programs such as the Shuttered Venue Operator Grant program and Restaurant Revitalization Grant program.