IRS T.D.: Final Regulations for Excise Tax on Repurchase of Corporate Stock (IRC §4501)

The IRS published final regulations implementing the excise tax on corporate stock repurchases under the Inflation Reduction Act of 2022. The regulations establish a 1 percent excise tax on the fair market value of stock repurchased by publicly traded corporations after Dec. 31, 2022. The final rules provide guidance on determining covered corporations, computing the tax base with netting adjustments for stock issuances, applying statutory exceptions, and special rules for acquisitions involving foreign corporations. Key changes from proposed regulations include narrowing the scope of economically similar transactions, excluding take-private transactions and acquisitive reorganizations from the tax, providing transition relief for ...