The Treasury Department and the Internal Revenue Service recently issued proposed regulations (REG-115710-22 and REG-118499-23) implementing new section 4501, which imposes an excise tax of 1 percent on repurchases of stock by certain publicly traded corporations beginning after December 31, 2022. The excise tax was enacted under the Inflation Reduction Act of 2022 (P.L. 117-169).
The new guidance largely adopts the provisions in Notice 2023-2 (released in December of 2022), which announced the government’s intention to issue proposed regulations addressing the application of the excise tax and provided taxpayers with interim guidance until those proposed regulations were published.
The proposed regulations also provide a revised “funding rule” for publicly traded, foreign-parented groups and set a new expected deadline for the information reporting and payment of the excise tax, tied to the later of the date of release of final regulations or taxpayers’ year-ends.
Find out more
A new alert from Deloitte Tax LLP provides an overview of the proposed regulations.
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