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IRS Guidance Answers Certain Questions for SPACs on Applicability of Excise Tax, but Some Uncertainty Remains

On December 27, 2022, the IRS released initial guidance on the stock buyback excise tax (“Excise Tax”) enacted as part of the Inflation Reduction Act in August 2022, as discussed in our prior Alert. Notice 2023-2 (the “Notice”) provides interim guidance on which taxpayers may rely pending issuance of regulations, and addresses several ambiguities in the application of the Excise Tax. This Alert discusses the impact of this interim guidance on special purpose acquisition company (“SPAC”) operations and transactions.

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Senate Passes Tax Reform Bill


Time to Read: 1 minutes Practices: Tax

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Capital Insights.

On December 2, 2017, the Senate narrowly passed the Tax Cuts and Jobs Act, the Senate Republicans’ version of tax reform legislation. With this vote, Congress is one step closer to sending a tax reform bill to the President for his signature. Prior to the vote, several amendments were included to secure the support of key Republican senators and to bring some provisions of the Senate bill closer to the version passed by the House of Representatives on November 16, 2017. A comparison of the most significant provisions of the House and Senate bills can be found here. Our previous coverage of the tax reform legislative process up to this point can be found here and here.

Some of the late changes to the Senate legislation include:

  • Increasing the deduction for business income of sole proprietorships and pass-through entities from 17.4% to 23%;
  • Phasing out capital expensing through 2028 (instead of ending it in 2022);
  • Retaining the individual and corporate alternative minimum tax; and
  • Permitting (as in the House version) individuals to deduct up to $10,000 in state and local property taxes.

The Senate will now work with the House to reconcile the two bills. Although the House and Senate versions contain many similar provisions, there are important differences that will need to be resolved before legislation can be enacted.

We will be following developments closely as the legislative process moves forward. Please contact the Tax Group with any questions you may have.

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