The Internal Revenue Service (IRS) recently issued Notice 2022-36 (pdf), granting relief from certain failure-to-file penalties and certain information return penalties for most individual and business taxpayers who did not file tax returns for tax years 2019 and 2020, provided the returns are filed before 30 September 2022. In addition, the IRS will automatically (1) abate assessed, but unpaid, penalties or (2) refund or credit any penalties that were already paid by taxpayers who would have been granted this failure-to-file relief.
The penalty relief applies to certain international information returns. In particular, penalty relief applies to Form 5471 (Information Return of U.S. Persons With Respect To Certain Foreign Corporations) and Form 5472 (Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business) when they are attached to a late-filed Form 1120 or Form 1065.
The penalty relief does not apply to international information returns not listed in the notice, such as Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation) and Form 8865 (Return of U.S. Persons With Respect to Certain Foreign Partnerships).
The OECD on 25 August released the public comments it received on the Progress Report on Amount A of BEPS Pillar One. EY submitted extensive comments (pdf) on the Amount A Pillar One progress report. According to the comment letter submitted by EY, applying the complex mechanics for Pillar One that have been specified to date, it becomes clear that the overall result would be that a relatively small number of mature market jurisdictions would gain additional taxing rights, with the bulk of jurisdictions around the world likely receiving little benefit or seeing a reduction in their taxing rights. This outcome is largely due to the formulaic approach used to determine Amount A.
The OECD announced that the public consultation meeting on Amount A of Pillar One will take place on 12 September 2022 in hybrid format.
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.
