The outcome of the United States (US) mid-term congressional election on 8 November remains unresolved, with control of both the House and Senate unclear at this time. Which political party controls one or both chambers will influence what can be attached to must-pass legislation in the lame-duck session to extend government funding beyond its 16 December expiration, including whether there will be a tax package and what it would include. The election results will also establish the policy direction for Congress on tax and many other issues for the next two years. Tax committee leaders quoted in the press before the election suggested that they expected that there would be a year-end tax package, though members could opt to push some business into next year depending on who controls Congress when it reconvenes next year.
The House and Senate have been out of session in the lead up to the mid-term election. The Senate will return to Washington on 14 November.
An Internal Revenue Service (IRS) official on 7 November was quoted as saying that the proposed foreign tax credit regulations will be released within the next 10 days. According to the official, the notice of proposed rulemaking “was largely done quite a long time ago. … Certain aspects and certain parts of the process have kept it from being released,” he said, hinting that taxpayers may be pleased with how the government will address the cost recovery rules in the proposed regulations.
The IRS official confirmed that the government remains largely focused on the new corporate alternative minimum tax (CAMT). In terms of CAMT guidance, the official said: “There will be a notice of some kind this year, likely to cover none of the international issues, likely to cover more big picture — the ones that have been in the press about recognition transactions, nonrecognition transactions.” A second notice will follow soon after, not before the end of the year but “in time for first-quarter stuff,” he said.
Treasury and the IRS on 4 November released the 2022–2023 Priority Guidance Plan (pdf). The plan contains 205 guidance projects that are priorities for allocating Treasury Department and IRS resources during the 12-month period from 1 July 2022 through 30 June 2023.
In a 3 November letter to Treasury Secretary Janet Yellen and Secretary of State Antony Blinken, House Ways and Means Committee Ranking member Kevin Brady, Senate Finance Committee Ranking Member Mike Crapo, and Senate Foreign Relations Committee Ranking Member Jim Risch expressed concern about Treasury terminating the US-Hungary tax treaty. “As we approach the end of the six-month advance-notice period to terminate the Treaty, we urge the Administration to reverse this decision and reengage with our treaty partner to ensure the United States upholds our treaty commitments.” The treaty is scheduled to terminate in January 2023, absent action by the US government.
And President Joe Biden on 10 November announced that he was nominating former acting IRS commissioner Daniel Werfel to lead the IRS. The position requires US Senate confirmation.
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (United States), International Tax and Transaction Services, Washington, DC
- Arlene Fitzpatrick
- Joshua Ruland
For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.
