On June 11, TEI submitted comments on the proposed regulations on the stock repurchase excise tax. TEI requested clarification on the method for electing to apply the proposed regulations retroactively to issuances and repurchases that occurred after December 31, 2022, but before the publication of the proposed regulations. TEI also urged the Treasury Department and the Internal Revenue Service to reconsider some of its requests in its prior comments on Notice 2023-2, including carve-outs from the tax for redemptions of nonparticipating, nonconvertible preferred stock and carve-outs for certain ordinary course business transactions and Treasury functions from the funding rule. TEI also argued for the removal of the funding rule entirely, or, at a minimum, the removal of the expanded scope of the “a principal purpose” prong of the rule.
