The U.S. Department of the Treasury and Internal Revenue Service issued proposed regulations on the stock buyback or “repurchase” excise tax, a key provision of the Inflation Reduction Act that helps ensure large corporations pay more of their fair share in taxes.
As the tax code has favored stock buybacks, many companies have failed to reinvest profits in their workers, growth, and innovation. The stock buyback excise tax begins to change that.
The proposed regulations provide additional clarity to taxpayers and tax professionals on how to properly calculate and pay the new stock buyback excise tax on corporate stock buybacks.
The Treasury said the proposed regulations would provide that the stock repurchase excise tax must be reported on the IRS Form 720, Quarterly Federal Excise Tax Return, with the Form 7208 attached.
National Economic Advisor Lael Brainard said the stock buyback tax will encourage companies to invest in workers and the U.S. economy, rather than paying out stock buybacks to wealthy investors, and make corporations pay more of their fair share.
The Treasury Department’s proposed regulations are a key step toward implementing President Biden’s tax fairness agenda, according to him.
He alleged that the Trump administration’s tax cuts giveaways to large corporations led to record high stock buybacks.
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