This Week’s Internal Revenue Bulletin

HIGHLIGHTS OF THIS ISSUE

These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations.

INCOME TAX

Announcement 2020-10, page 385. The competent authorities of the United States of America and Switzerland hereby enter into the following arrangement (“the Arrangement”) that references to North American Free Trade Agreement in the Convention between the Swiss Federation and the United States of America for the Avoidance of Double Taxation with Respect to Taxes on Income (the “Convention”) shall be understood as references to the United States-Mexico-Canada Agreement (“USMCA”) upon entry into force of the USMCA. The Arrangement is entered into under paragraph 3 of Article 25 (Mutual Agreement Procedure) of the Convention.

Announcement 2020-11, page 385. This document contains corrections to TD 9900, published in Internal Revenue Bulletin 2020-30 on Monday, July 20, 2020.

REG-127732-19, page 385. This document contains proposed regulations under the subpart F income and global intangible low-taxed income provisions of the Internal Revenue Code regarding the treatment of certain income that is subject to a high rate of foreign tax. This document also contains proposed regulations under the information reporting provisions for foreign corporations to facilitate the administration of certain rules in the proposed regulations. The proposed regulations would affect United States shareholders of controlled foreign corporations.

Rev. Proc. 2020-37, page 381. This revenue procedure provides: (1) tables of limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2020; and (2) a table of amounts that must be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2020. The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by section 280F(d)(7). For purposes of this revenue procedure, the term “passenger automobiles” includes trucks and vans.

T.D. 9901, page 266. These final regulations provide guidance on the deduction for Foreign-Derived Intangible Income and Global Intangible Low-Taxed Income under section 250 of the Code, which was added to the Internal Revenue Code (the “Code”) by the Tax Cuts and Jobs Act, Pub. L. No. 155-97 (2017). The final regulations replace previously issued proposed regulations and provide guidance on both the computation of the deductions available under section 250 and the definition and determination of FDII. In addition, the final regulations provide rules, pursuant to section 1502 of the Code, for the computation of FDII in a consolidated group. Finally, these final regulations contain amendments to regulations under sections 962, 6038 and 6038A of the Code.

T.D. 9902, page 349. This document contains final regulations under the global intangible low-taxed income and subpart F income provisions of the Internal Revenue Code regarding the treatment of income that is subject to a high rate of foreign tax. The final regulations affect United States shareholders of foreign corporations. This guidance relates to changes made to the applicable law by the Tax Cuts and Jobs Act, which was enacted on December 22, 2017.