April 2024 / United States

April 18 2024

US: Underpayment Penalties Waived for Corporate Alternative Minimum Tax

Under Notice 2024-33, the IRS is waiving underpayment penalties for the first quarterly estimated income tax payment for the corporate alternative minimum tax (CAMT) that is due on or before 15 April 2024 or, in the case of a fiscal year taxpayer with a taxable year beginning in February 2024, 15 May 2024 (see Note).

Note: The CAMT was implemented under the Inflation Reduction Act (IRA), which imposes a 15% minimum tax on the adjusted financial statement income (AFSI) of large corporations

Source: IBFD tax research platform news

May 6 2024

US: IRS Proposes Regulations to Implement 1% Excise Tax on Corporate Stock Repurchases

The IRS has issued proposed regulations (REG-115710-12, RIN 1545-BQ59 and REG-118499-23, RIN 1545-BQ60), which would implement the 1% excise tax on corporate stock repurchases enacted by Congress under the Inflation Reduction Act (IRA).

The proposed regulations are derived from - and once finalized would replace - interim guidance issued by the IRS in December 2022.

The excise tax will apply to stock repurchases that occur after 31 December 2023 and is based on the aggregate fair market values of the stock.

Under the proposed regulations, a statutory netting principle is implemented, in which the total fair market value of the stock issued by a taxpayer in a fiscal year is deducted from the total fair market value of the stock that the same taxpayer repurchased in that year.

The regulations would also implement a statutory de minimis exception, which exempts a taxpayer from the stock repurchase excise tax for a fiscal year if the total fair market value of the stock that the taxpayer repurchased in that year is not more than USD 1,000,000.

Source: IBFD tax research platform news