On April 21, 2020, the U.S. Internal Revenue Service (IRS) and Department of the Treasury published guidance (Guidance) addressing the impact of certain business activities conducted in the United States as a result of the COVID-19 crisis on the U.S. taxable presence of a foreign corporation.1 As more fully described below, the Guidance describes certain business activities conducted within the United States solely as a result of the COVID-19 emergency by a foreign corporation2 that will be disregarded in determining under applicable law whether such person is engaged in a “trade or business within the United States” (USTB) or has a permanent establishment in the United States (USPE). The Guidance effectively provides immediate relief from potential adverse tax consequences resulting from certain personnel being unable or unwilling to leave the United States due to the COVID-19 crisis. The relief granted, however, is much narrower than members of the insurance industry had hoped for. Because the relief applies only to individuals who either are nonresidents of the United States or have tax homes outside the United States, it will be of no use to most foreign insurance industry participants. Thus, the Guidance appears narrower than the similar forms of relief provided by certain foreign governments facing the same issue.3
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