The Internal Revenue Service released two notices with guidance on the new corporate alternative minimum tax, and on the corporate stock repurchase excise tax.
Both relate to provisions of the Inflation Reduction Act that was signed into law in August.
Notice 2023-2 provides interim guidance on the application of the IRA’s corporate stock repurchase excise tax, a 1% excise tax on the aggregate fair market value of stock repurchased by some corporations.
The goal of the interim guidance is to “provide certainty to taxpayers” before the new excise tax takes effect on Jan. 1, 2023. Taxpayers may rely on the definitions and regs in Notice 2023-2 until the service proposes final regulations, which it expects will be in line with the interim guidance.
The notice also asks for comments on the rules and some related questions; they should be submitted within 60 days at www.regulations.gov/.
The other notice, Notice 2023-7, offers interim guidance regarding the application of the new corporate alternative minimum tax until the issuance of proposed regulations.
The CAMT puts a 15% tax on the adjusted financial statement income of large corporations — generally, those with over $1 billion in income — starting Dec. 31, 2022. The notice aims to clarify which companies the tax applies to, and how the AMT should be calculated, as well as answering certain basic questions.
The IRS highlighted the fact that the notice gives smaller companies an “easy” method for determining whether tax applies to them or not.
Comments are also being sought on the interim regs in 2023-7, and on related questions; they should also be submitted within 60 days at www.regulations.gov/.