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Excise Tax on Stock Repurchases Under Current Tax Law and Impact of New IRS Proposed Regulations

Dividend Treatment, Substantiation Requirements, M&A Issues, Challenges for Certain Capital Markets, Notice 2023-2

Recording of a 90-minute premium CLE/CPE video webinar with Q&A

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Conducted on Wednesday, July 17, 2024

Recorded event now available

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This CLE/CPE webinar will guide tax counsel and advisers on critical provisions regarding stock repurchases in the Inflation Reduction Act of 2022 (the Act) and the impact of new IRS proposed regulations. The panel will discuss the new IRS regulations for the excise tax on stock repurchases under Section 4501, excise tax base, the netting rule, valuation, timing rules, and calculating and paying the excise tax. The panel will also discuss tax implications for M&A, capital markets transactions, and foreign-parented groups, as well as other vital items significantly impacting transactions.


The Act enacted an excise tax for the repurchase of stock made on or after December 31, 2022, impacting publicly traded corporations across various industries. Attorneys and tax professionals must assess the impact of excise tax provisions under current tax law and challenges stemming from recent IRS proposed regulations, how they are applied to taxpayers, and their effects on certain M&A transactions and tax planning.

One of the primary revenue raising tax provisions impacting M&A transactions, deal structures, and tax planning under the Act is an excise tax imposed upon stock repurchases or similar transaction. The stock repurchase excise tax is charged on the fair market value of the repurchased stock, reduced by the fair market value of such corporation's stock issued in the same taxable year.

On Apr. 12, 2024, the IRS published proposed regulations on the application of Section 4501, which imposes a one percent excise tax on certain repurchases of stock. The proposed regulations mostly align with guidance provided under Notice 2023-2, but adopt a broad approach to application of the excise tax, with limited exceptions. This presents significant issues for transactions that are not typically considered to be stock buybacks and companies may be subject to the new excise tax.

Listen as our panel discusses the excise tax on stock repurchases, the impact of recent IRS proposed regulations, and other critical matters impacting M&A transactions and other tax rules and challenges for certain transactions.



  1. Excise tax for stock repurchases
    1. Key provisions under current tax law
    2. Notice 2023-2
    3. New IRS proposed regulations
    4. Companies subject to the excise tax
    5. Timing rules
    6. Valuation methods
    7. Calculating and reporting
  2. Implications for M&A and capital markets transactions, and foreign-parented groups
  3. Best practices for tax counsel and advisers


The panel will discuss these and other key issues:

  • Key tax provisions regarding stock repurchases
  • Determining what entities are covered under the proposed regulations
  • Navigating netting and timing rules and substantiation requirements
  • Challenges for structuring M&A transactions
  • Issues for foreign-owned U.S. corporations
  • Best practices for tax advisers and M&A counsel


Maynor, James
James Maynor

Greenberg Traurig

Mr. Maynor focuses his practice on the U.S. taxation of international transactions and investments. He advises public...  |  Read More

Strong, David
David Strong, CPA


Mr. Strong is a leader in the delivery of tax accounting services related to inventory valuation, accounting method...  |  Read More

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