Report on recent US international tax developments – 13 January 2023

United States (US) Representative Kevin McCarthy became the new Speaker of the House on 7 January, reaching the necessary majority vote on the 15th ballot. Days later, the House GOP Steering Committee elected Representative Jason Smith to be the new chairman of the Ways and Means Committee. In a statement, Representative Smith listed out his priorities, which included examining whether to “continue showering tax benefits on corporations that have shed their American identity” and using trade and tax policy to “re-shore and strengthen our supply chains, where products and services vital to our national security are made here at home using American labor,” among others.

The press reported this week that President Biden requested that Treasury Secretary Janet Yellen stay on in her post and that she accepted. The Treasury Secretary is expected to continue implementing provisions of the Inflation Reduction Act and to move forward with the BEPS 2.0 agenda.

Interim guidance (Notice 2023-7 (pdf)) on the new 15% Corporate Alternative Minimum Tax (CAMT) enacted by the Inflation Reduction Act answers many questions, but other issues remain unanswered. Taxpayers may rely on the interim guidance pending the release of proposed regulations, which are anticipated to apply for tax years beginning after 31 December 2022.

The Internal Revenue Service (IRS) has indicated it will be releasing further interim guidance before the proposed regulations are issued. The Notice provides a lengthy list of items on which the IRS invites written comments, including which guidance "is needed most quickly." Interested parties should submit written comments to the IRS electronically within 60 days after Notice 2023-7 is published in the Internal Revenue Bulletin. For an overview of the CAMT and outline of certain outstanding considerations, see EY Global Tax Alert, US IRS releases interim guidance on 15% corporate alternative minimum tax, dated 13 January 2023.

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.