There was not much movement in terms of a budget reconciliation bill, with most of the attention centered around a House-Senate conference on so-called China competitiveness legislation. Senator Joe Manchin this week again said he would support a budget reconciliation bill, saying: “My main thing is inflation, fighting inflation with tax reforms.” Senator Manchin has continued to call for tax rate increases that are opposed by Senator Kyrsten Sinema.
A Treasury official this week said the Government is working on rules governing so-called “Killer B” cross-border triangular reorganizations. The Internal Revenue Service earlier released Notices 2016-73 and Notice 2014-32 on the topic. The official was quoted as saying the Government is “actively working on putting those into regulations.”
The official further noted that the Government is also working on regulations under Internal Revenue Code Section 367(d) dealing with the situation when intangible property is transferred from the United States (US) and then repatriated. The official noted that the present regulations do not address the issue “so the implication right now is that if you bring it back, you are still subject to the 367(d) regime.” The future guidance, which is included in the 2021-2022 priority guidance plan, reportedly will be narrow in scope but broader than existing private letter rulings that address intangible property returning to the US.
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.
