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Inflation Reduction Act of 2022 Includes Key Tax Changes

August 10, 2022

Congressional Tax Deal Includes Key Tax Changes
The Senate passed the Inflation Reduction Act of 2022 (H.R. 5376). The bill would impose a 15% corporate minimum tax for companies with higher than $1 billion in annual revenue and a 1% excise tax on stock buybacks, expected to raise an estimated $739 billion in revenue. The bill includes increased tax enforcement, up to $7,500 tax credit for electric vehicle purchases, and $60 billion in incentives for clean energy manufacturers. A provision raising taxes on carried interest was dropped after Senator Kyrsten Sinema opposed the measure. The tax bill is scheduled for a vote in the House.

IRS Updates U.S. Residency Certifications Instructions
The Internal Revenue Service (IRS) updated the Instructions for Form 8802, Application for United States Residency Certification, to reflect the revised penalty of perjury for a disregarded entity statement. The instructions state that Form 6166, U.S. Residency Certification, can be mailed to a foreign address if the address is listed on Form 8802.

IRS Clarifies Election Procedures for Partnership Properties
The IRS released final regulations on how to make elections to adjust the basis of partnership properties. In the final regulations, the current requirement for an election filed pursuant to Section 754 to be signed by a partner is removed. The regulations will make it easier for partnerships to make an election to adjust the basis of partnership property.

Advocacy Group Argues for SEC’s Requirement of Public Tax Reporting by U.S. Multinationals
The Financial Accountability and Corporate Transparency Coalition, a nonpartisan group of state and national organizations, issued a report calling on the Securities and Exchange Commission (SEC) to require large U.S. multinational companies publicly disclose data regarding tax obligations in each country they operate. The coalition recommended in the report that an SEC public country-by-country reporting rule applies to all industries and jurisdictions. Senator Chris Van Hollen, whose remark at a webinar is present in the report, said releasing public information on a country-by-country basis will provide investors with the information they need to better understand the tax strategies and risks taken by the companies in which they invest.

Information contained in this publication should not be construed as legal advice or opinion or as a substitute for the advice of counsel. The articles by these authors may have first appeared in other publications. The content provided is for educational and informational purposes for the use of clients and others who may be interested in the subject matter. We recommend that readers seek specific advice from counsel about particular matters of interest.

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