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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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American Rescue Plan Act (ARPA) Phase 5 Stimulus Package—Highlights of Certain Key Tax-Related Provisions in ARPA

Practices: Tax

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On March 11, 2021, President Biden signed into law the American Rescue Plan Act (ARPA), in furtherance of the fifth phase of the federal government’s response to the COVID-19 crisis. The full text of the bill is published here. The key tax provisions of the Phase 5 Stimulus are summarized in this Alert, and include the repeal of the worldwide interest allocation election, an expansion of the employee retention credit, and additional economic impact payments for individuals.

Click here to read the full alert.

 A separate Ropes & Gray client alert (Key Employee Benefit Provisions of the American Rescue Plan Act of 2021) provides a summary of the key employee benefit plan and executive compensation-related provisions outlined in the ARPA.

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