IRS’s First Tranche of Key Stock Buyback Final Rules, Explained

The final IRS rules on procedures to pay the 1% stock buyback excise tax lay out how and when it should be paid and carve out exemptions for certain groups that qualify.

Left untouched, though, is guidance around how to calculate what a company owes under the buyback tax, which will be addressed when the IRS finalizes a second set of proposed regulations also issued in April.

Enacted in the 2022 tax-and-climate law, the tax applies to straightforward corporate share repurchases as well as economically similar transactions. That includes buyback of corporate stock in connection with certain mergers, separations and ...