Ernst & Young ITTS Washington Dispatch

Status update on US tax reform -- IRS opens online FATCA registration system -- US, Cayman Islands initial FATCA Model I IGA -- IRS 2013-2014 Priority Guidance Plan released -- IRS finalizes certain cost sharing regulations on determining taxable income -- US-Belgium competent authority agreement released

OECD releases base erosion and profit shifting (BEPS) action plan -- OECD releases revised Discussion Draft on the Transfer Pricing Aspects of Intangibles -- OECD White Paper on Transfer Pricing Documentation issued -- President Obama resumes call for business tax reform -- IRS revises FATCA timelines, provides other guidance -- IRS releases updated Model 1 and Model 2 FATCA IGAs -- IRS will cease granting rulings to early adopt 2006 Section 987 proposed regulations -- CTB regs to add Croatian Dionicko Drustvo to per se list corporations -- US Tax Court has jurisdiction to review cancellation of APAs under abuse of discretion standard

G8 summit calls for greater transparency with tax authorities -- OECD provides update on BEPS project -- House Ways and Means Committee hearing highlights MNCs' use of tax havens -- Senate Finance Committee Chairman supports "clean" federal debt ceiling increase -- IRS expands automated Form 5471 penalty program to Form 5472 -- IRS retroactively applies Notice 2012-39 to outbound F reorganization -- US-Brazil TIEA is effective -- US, Japan sign FACTA "statement" -- UN launches Practical Manual on Transfer Pricing for Developing Countries

Debt talks could spur movement on US tax reform -- Senate subcommittee highlights US MNC's tax planning -- US Supreme Court rules UK windfall profits tax creditable under Section 901 -- US officials discuss OECD BEPS report -- IRS officials detail upcoming international tax guidance -- FACTA update -- OECD publishes report on Co-operative Compliance -- OECD publishes new "Draft Handbook on Transfer Pricing Risk Assessment" -- OECD issues final guidance on transfer pricing safe harbors.

Obama Administration's proposed FY 2014 Budget recycles international tax provisions -- US continues momentum on FATCA IGAs -- Tax Court applies step transaction to repatriation transactions -- Partnerships with ECTI allocable to foreign partners must file 2012 Form 8804 for any tax year beginning in 2012 -- US, Norway sign competent authority agreement

Sequester in force, federal government avoids shutdown -- IRS issues regulations on outbound asset reorganizations -- IRS concludes equity-linked debt creates straddle, requires capitalization -- NRA selling US partnership interest engaged in US trade or business had US ECI -- FATCA update -- IRS issues annual APA report -- IRS Competent Authority statistics released -- OECD releases report, "Aggressive Tax Planning Based on After-Tax Hedging"

President Obama delivers State of the Union address; sequester looms -- Ways and Means Committee Chairman releases draft proposals on tax treatment of financial products -- The Cut Unjustified Tax Loopholes Act introduced in Senate -- US and Poland sign new tax treaty -- US, Norway sign mutual agreement on fiscally transparent entities -- IRS proposes changes to rules for failure to comply with GRAs, other filings -- OECD releases report on base erosion and profit shifting

US issues final FATCA regulations -- US fiscal debate turns to sequestration -- US, Japan sign comprehensive tax protocol -- US, Spain sign amending tax protocol -- IRS issues final anti-abuse regulations under Section 304 -- Treasury grants further extension for FBAR reporting signature authority over certain foreign financial accounts -- IRS publishes revised instructions for Form 5471 -- IRS announces domestic entities not required to report interests in foreign financial assets on Form 8938 for tax years beginning before 31 December 2012 -- Noticeable increase in IRS audits of intercompany loans -- IRS closes record-high 140 APA cases in 2012

Congress approves "fiscal cliff" agreement including all tax extenders; sequestration delayed two months -- US initials FATCA agreements with Switzerland, Ireland, and Spain -- IRS expands type of Section 988 FX losses that do not trigger reportable transaction disclosure -- IRS to withdraw Industry Director Directive offering GRA flexibility -- IRS generic advice disregards securities lending transaction based on economic substance -- Tax Court disregards foreign corporation's contribution of built-in loss property to domestic subsidiary

November elections leave status quo unchanged for "fiscal cliff" talks - Treasury issues second Model FATCA Intergovernmental Agreement -- FATCA negotiations moving forward -- REIT's Subpart F and PFIC inclusions qualify under 95% income test -- IRS releases 2012 - 2013 Business Plan