Treasury and IRS Issue Guidance on Corporate Stock Repurchase Excise Tax
The Treasury Department and IRS recently issued Notice 2023-2 providing interim guidance regarding the application of the corporate stock repurchase excise tax until the issuance of proposed regulations.
The new code section added by the Inflation Reduction Act imposes a 1% excise tax on the aggregate fair market value of stock repurchased by certain corporations during the taxable year, subject to adjustments. The Treasury and IRS have issued the new notice to provide certainty to taxpayers in advance of Jan. 1, 2023, the date on which the new excise tax will apply to stock repurchases.
The notice describes certain rules and procedures that the Treasury and IRS intend to include in the forthcoming proposed regulations. Taxpayers may rely upon Notice 2023-2 until the issuance of the forthcoming proposed regulations.
In addition, the notice solicits comments on the rules contained in the notice and other issues under consideration. The Treasury and IRS recommend comments be submitted within 60 days of the date on which the notice is published in the Internal Revenue Bulletin.