By Doug Connolly, MNE Tax
The US Internal Revenue Service priority guidance plan for 2021–2022, released September 9, lists several new corporate and international tax guidance projects for the coming year, supplementing much of the running list carried over from the previous administration.
The plan lists a total of 193 tax guidance projects that are the IRS’s top priorities for new regulations and other guidance for the agency’s fiscal year ending June 2022. Inclusion in the list does not guarantee that the IRS will issue guidance in the area within the year, and some projects remain on the list year-to-year.
New international projects
Among the new projects listed this year are regulations addressing the inbound transfer of intangible property under Internal Revenue Code section 367(d).
The plan also lists modifying the regulations under IRC 367 (foreign corporations) with respect to certain triangular reorganizations involving one or more foreign corporations. This guidance would pick up where the Obama–Biden Administration left off, with the last guidance published late in Obama’s last term (Notice 2016-73).
In addition, the IRS intends to expand on some regulations related to hybrid instruments issued under the Trump administration. In this respect, the plan adds to the list regulations to treat hybrid instruments and certain tax-favored equity as a financing transaction for purposes of the regulations on conduit financing arrangements. Last year, the IRS issued final rules on hybrid instruments but not tax-favored equity.
The guidance planned with respect to transfer pricing is generally consistent with the previous year. The plan remains to finalize 2015 regulations under IRC 367 and IRC 482 (allocation of income and deductions among taxpayers), including addressing statutory changes in IRC 367(d) and IRC 482.
Other new and notable corporate guidance projects
With the change in research and development (R&D) expensing scheduled to take effect in 2022, the plan also includes new guidance to address amortization of research and experimental expenditures under IRC 174.
The IRS and Treasury under the Biden Administration also plan to finalize proposed regulations issued during the Obama administration in April 2016 under IRC 305(c) on deemed distributions of stock and rights to acquire stock.
Tax accounting projects
The plan also adds several new projects related to tax accounting. Among these is a revenue procedure on complying with certain regulations affecting small businesses, including procedures for making automatic changes in methods of accounting. Another revenue procedure is planned to address the gross receipts safe harbor for the employee retention credit.
Additional new tax accounting guidance would address the treatment of capitalized costs for IRC 355 distributions and final regulations under IRC 453B on non-recognition of gain or loss on disposition of certain installment sales.
Doug Connolly
Doug Connolly is Editor-in-Chief of MNE Tax. He has more than 10 years of experience covering tax legal developments, previously working with both a Big Four firm and a leading legal publisher. He holds a law degree from American University Washington College of Law.
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