On June 28, 2024, the IRS and the U.S. Treasury Department issued final regulations regarding the reporting and payment of the one percent (1%) excise tax on repurchases of publicly traded corporate stock made after December 31, 2022.  The excise tax was imposed by the Inflation Reduction Act of 2022, as discussed in an article published by attorneys in Vedder Price’s Tax group.  The Inflation Reduction Act exempts repurchases made by a regulated investment company (as defined in Section 851 of the Internal Revenue Code) and real estate investment trusts (REITs) from the excise tax.

Although the regulations exempt regulated investment companies and REITs from the obligation to file a stock repurchase excise tax return, these entities are subject to certain recordkeeping requirements. Specifically, regulated investment companies and REITs must keep complete and detailed records as are sufficient to establish accurately the amount of repurchases, adjustments or exceptions that would otherwise be required to be reported on any stock repurchase excise tax return. 

The final regulations took effect on June 28, 2024 and are available here.