US | Interim guidance on stock buyback excise tax offers mixed bag for corporate taxpayers

Notice 2023-2 announces upcoming proposed regulations and provides interim guidance under Internal Revenue Code Section 4501, which generally imposes a non-deductible, 1% excise tax on the fair market value (FMV) of repurchases of corporate stock made after 31 December 2022.

The Notice confirms that transactions such as preferred stock redemptions and certain leveraged buyout transactions are subject to the 1% excise tax.

Some "outlier" transactions, such as Internal Revenue Code Section 304(a)(1)…