Reg-118499-23

[4830-01-p]

This document is scheduled to be published in the
Federal Register on 04/12/2024 and available online at
https://federalregister.gov/d/2024-07118, and on https://govinfo.gov

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 58
[REG-118499-23]
RIN 1545-BQ60
Excise Tax on Repurchase of Corporate Stock – Procedure and Administration
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking.
SUMMARY: This document contains proposed regulations that would provide guidance
regarding reporting and payment of the new excise tax on repurchases of corporate
stock made after December 31, 2022. The proposed regulations would affect certain
publicly traded corporations that repurchase their stock or whose stock is acquired by
certain specified affiliates. Another notice of proposed rulemaking on this topic is
published elsewhere this issue of the Federal Register to propose rules on the general
application of, and exceptions to, this new excise tax.
DATES: Written or electronic comments and requests for a public hearing must be
received by [INSERT DATE 30 DAYS AFTER DATE OF PUBLICATION IN THE
FEDERAL REGISTER].
ADDRESSES: Commenters are strongly encouraged to submit public comments
electronically. Submit electronic submissions via the Federal eRulemaking Portal at
https://www.regulations.gov (indicate IRS and REG-118499-23) by following the online
instructions for submitting comments. Requests for a public hearing must be submitted
as prescribed in the “Comments and Requests for a Public Hearing” section. Once
submitted to the Federal eRulemaking Portal, comments cannot be edited or withdrawn.
The Department of the Treasury (Treasury Department) and the IRS will publish for

public availability any comment submitted electronically or on paper to the IRS’s public
docket.
Send paper submissions to: CC:PA:01:PR (REG-118499-23), Room 5203, Internal
Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations,
Samuel G. Trammell at (202) 317-6975; concerning submissions of comments and
requests for a public hearing, Vivian Hayes at (202) 317-6901 (not toll-free numbers) or
by email at [email protected] (preferred).
SUPPLEMENTARY INFORMATION:
Background
I. Overview
This notice of proposed rulemaking proposes regulations under section 4501 of
the Internal Revenue Code (Code) that would provide rules on procedure and
administration applicable to the reporting and payment of the new excise tax on
repurchases of corporate stock (stock repurchase excise tax) imposed by section 4501
for repurchases made after December 31, 2022. As proposed in this notice of proposed
rulemaking, the regulations are proposed to be added as subpart B of new 26 CFR part
58 (Stock Repurchase Excise Tax Regulations), which is proposed to be added to
subchapter D of 26 CFR chapter I (Miscellaneous Excise Taxes).
Proposed subpart A of part 58, contained in another notice of proposed
rulemaking (REG-115710-22) published elsewhere in this issue of the Federal
Register, would provide operative rules under section 4501. Proposed §58.4501-1
would provide an overview of the stock repurchase excise tax, generally applicable
definitions, the scope of the regulations implementing the tax, and certain operating
rules applicable to those regulations. Proposed §58.4501-2 would provide general rules
regarding the application and computation of the stock repurchase excise tax.

Proposed §58.4501-3 would provide rules regarding the application of the exceptions in
section 4501(e) (other than the de minimis exception described in section 4501(e)(3)
and to which proposed §58.4501-2(b)(2) applies). Proposed §58.4501-4 would provide
rules regarding the application of section 4501(c)(3). Proposed §§58.4501-5 and
58.4501-6 would provide examples and applicability dates. Proposed §58.4501-7 would
provide rules specifically relating to the application of section 4501(d).
II. Section 4501; Notice 2023-2
Section 4501 was added to a new chapter 37 of the Code by the enactment of
section 10201 of Public Law 117-169, 136 Stat. 1818 (August 16, 2022), commonly
referred to as the Inflation Reduction Act of 2022 (IRA). In general, section 4501
imposes the stock repurchase excise tax on each covered corporation (as defined in
section 4501(b)) for repurchases made after December 31, 2022. See section 10201(d)
of the IRA. The stock repurchase excise tax is equal to 1 percent of the fair market
value of any stock of the corporation that is repurchased (as defined in section
4501(c)(1)) by the corporation during the taxable year. Section 4501(a). The term
“covered corporation” includes an entity treated as a covered corporation under section
4501(d)(1)(A) or (d)(2)(A).
Section 4501(f) authorizes the Secretary of the Treasury or her delegate
(Secretary) to prescribe regulations and other guidance as are necessary or appropriate
to carry out, and to prevent the avoidance of, the purposes of section 4501.
On January 17, 2023, the Treasury Department and the IRS published Notice
2023-2, 2023-3 I.R.B. 374, to provide initial guidance on the application of the stock
repurchase excise tax. The notice describes certain operating rules for purposes of the
stock repurchase excise tax that the Treasury Department and the IRS announced the
intent to include in proposed regulations, along with anticipated rules for reporting and
paying any liability for the stock repurchase excise tax.

Section 4 of Notice 2023-2 describes the anticipated rules for reporting and
paying any liability for the stock repurchase excise tax. As described in Notice 2023-2,
those anticipated rules would provide that (1) the stock repurchase excise tax must be
reported on IRS Form 720, Quarterly Federal Excise Tax Return, (2) taxpayers must
attach an additional form to the Form 720 reflecting the computation of the stock
repurchase excise tax, (3) the stock repurchase excise tax must be reported once per
taxable year on the Form 720 that is due for the first full quarter after the close of the
taxpayer’s taxable year, (4) the deadline for payment of the stock repurchase excise tax
is the same as the filing deadline, and (5) no extensions are permitted for reporting or
paying the stock repurchase excise tax owed.
Consistent with Notice 2023-2, and as explained in the Explanation of Provisions,
these proposed regulations would prescribe the manner and method of reporting and
paying the stock repurchase excise tax by adding rules on procedure and administration
in proposed subpart B of the proposed Stock Repurchase Excise Tax Regulations (26
CFR part 58) under sections 6001, 6011, 6060, 6061, 6065, 6071, 6091, 6107, 6109,
6151, 6694, 6695, and 6696 of the Code. The Treasury Department and the IRS have
added items relevant to the stock repurchase excise tax to tax return forms other than
Form 720, to assist in the identification of transactions subject to the stock repurchase
excise tax. See Form 1120, U.S. Corporation Income Tax Return and Form 1065, U.S.
Return of Partnership Income. The Treasury Department and the IRS continue to
evaluate amending or developing other forms, including for information reporting with
respect to foreign owners of domestic business entities and domestic owners of foreign
business entities, to assist in the identification of transactions subject to the stock
repurchase excise tax.
Explanation of Provisions
I. Requirement for Return and Recordkeeping

Under proposed §58.6011-1(a), a stock repurchase excise tax return would be
required to be filed by any covered corporation, or any person treated as a covered
corporation, that makes a repurchase (as defined in section 4501(c)(1)), or that is
treated as making a repurchase under section 4501(c)(2)(A), (d)(1)(B), or (d)(2)(B), after
December 31, 2022. Any covered corporation or person treated as a covered
corporation, that makes a repurchase, or that is treated as making a repurchase, would
be required to keep complete and detailed records sufficient to establish accurately the
amount of repurchases, adjustments, or exceptions required to be shown on its stock
repurchase excise tax return. See proposed §58.6001-1(a). Under the proposed
regulations, any covered corporation that makes a repurchase must comply with these
requirements, even if every repurchase is eligible for a statutory exception (for example,
in the case of repurchases by a regulated investment company or a real estate
investment trust) or is offset by issuances.
Under proposed §58.6011-1(b), the stock repurchase excise tax return would
include the Form 720, on which the stock repurchase excise tax liability would be
reported, and an attached Form 7208, Excise Tax on Repurchase of Corporate Stock,
on which the stock repurchase excise tax would be calculated. Proposed §58.6001-1(b)
provides that the IRS may require any covered corporation or person treated as a
covered corporation, to make such returns, render such statements, or keep such
specific records as to enable the IRS to determine whether the covered corporation or
person treated as a covered corporation is liable for the stock repurchase excise tax.
The records that would be required to be maintained would need to be available for
inspection by the IRS and retained for so long as their contents may become material.
See proposed §58.6001-1(c).
Under proposed §58.6061-1(a), the person required to file the stock repurchase
excise tax return would be required to sign that return in accordance with the applicable

forms and their corresponding instructions, and the signature would be prima facie
evidence that the individual is authorized to sign the stock repurchase excise tax return.
In addition, proposed §58.6065-1(a) would provide that any person signing a stock
repurchase excise tax return is required to include a written declaration that the return is
made under penalties of perjury when required by the return or the forms or their
corresponding instructions.
II. Time and Place for Filing Return and Paying Tax
With respect to a covered corporation or person treated as a covered
corporation, with a taxable year ending after December 31, 2022, and on or before the
date of publication of final regulations in the Federal Register, proposed §58.6071-1(c)
would require the stock repurchase excise tax return for such taxable year to be filed by
the due date of the Form 720 for the first full calendar quarter after the date of
publication of final regulations in the Federal Register.
For example, if a covered corporation had a taxable year ending December 31,
2023, and if the date of publication of final regulations in the Federal Register were
September 16, 2024, the covered corporation would be required to file the stock
repurchase excise tax return for its 2023 taxable year by January 31, 2025 (the due
date of the Form 720 for the calendar quarter ending December 31, 2024).
Proposed §58.6071-1(a) generally would require the stock repurchase excise tax
return to be filed by the due date of the Form 720 for the first full calendar quarter after
the taxable year of the covered corporation or person treated as a covered corporation
ends. This rule would be applicable for taxable years ending after the date of
publication of final regulations in the Federal Register.
For example, if a covered corporation had a taxable year ending December 31,
2024, and if the date of publication of final regulations in the Federal Register were
September 16, 2024, the covered corporation would be required to file the stock

repurchase excise tax return for its 2024 taxable year by April 30, 2025 (the due date of
the Form 720 for the calendar quarter ending March 31, 2025). Proposed §58.60911(a) and (b) would require the stock repurchase excise tax to be filed at the place
specified in the instructions applicable to Form 720 or, if the return is hand-carried, with
any person assigned the responsibility to receive hand-carried returns in the local IRS
office that serves the principal place of business, principal office, or agency of the
taxpayer. In exceptional cases, proposed §58.6091-1(c) would provide that the
Commissioner of Internal Revenue (Commissioner) would be able to permit the filing of
the stock repurchase excise tax return in any local IRS office. Full payment of the stock
repurchase excise tax liability would be required to accompany the filed stock
repurchase excise tax return. See proposed §58.6151-1(a).
A covered corporation or a person treated as a covered corporation that is
required to file a stock repurchase excise tax return or pay the stock repurchase excise
tax but does not timely file such return or pay such tax may be subject to additions to
tax under section 6651 and §301.6651-1.
III. Tax Return Preparers
Proposed §58.6107-1(a) would require a person who is a signing tax return
preparer (as defined in §301.7701-15(b)(1) of the Procedure and Administration
Regulations) of any stock repurchase excise tax return or claim for refund of the stock
repurchase excise tax to furnish a completed copy of the return or claim for refund to
the taxpayer and retain a completed copy or record in the manner stated in §1.6107-1 of
the Income Tax Regulations (26 CFR Part 1).
Proposed §58.6109-1(a) would require each stock repurchase excise tax return
or claim for refund of the stock repurchase excise tax prepared by one or more signing
tax return preparers to include the identifying number of the preparer required by
§1.6695-1(b) to sign the return or claim for refund in the manner stated in §1.6109-2.

In addition, proposed §58.6060-1(a) would require a person that engages or
employs one or more signing tax return preparers to prepare a stock repurchase excise
tax return or claim for refund of the stock repurchase excise tax (other than for the
person itself) to satisfy the recordkeeping and inspection requirements in §1.6060-1.
These proposed regulations also would provide certain rules relating to penalties
that may be assessed against tax return preparers under sections 6694, 6695, and
6696. Under proposed §58.6694-1(b) and (c), a person who is a tax return preparer of
any stock repurchase excise tax return or claim for refund of the stock repurchase
excise tax would be subject to penalties under section 6694(a) for an understatement of
liability due to an unreasonable position or under section 6694(b) for an understatement
of liability due to willful or reckless conduct.
Under proposed §58.6695-1(a), a person who is a tax return preparer of any
stock repurchase excise tax return or claim for refund of the stock repurchase excise tax
would be subject to penalties for: (1) a failure to furnish a copy of the tax return or claim
for refund to the taxpayer under section 6695(a); (2) a failure to sign the return under
section 6695(b); (3) a failure to furnish an identifying number under section 6695(c);
(4) a failure to retain a copy or list under section 6695(d); (5) a failure to file a correct
information return under section 6695(e); or (6) endorsing or negotiating any check
issued to the taxpayer under section 6695(f).
Lastly, proposed §58.6696-1(a) would require a claim for credit or refund of a
penalty assessed against a tax return preparer under section 6694 or 6695 (or the
corresponding regulations) to be made in the manner set forth in §1.6696-1.
Proposed Applicability Date
Proposed §58.6001-1 would be applicable to repurchases, adjustments, or
exceptions required to be shown in any stock repurchase excise tax return required to
be filed after the date of publication of final regulations in the Federal Register.

Proposed §§58.6011-1, 58.6060-1, 58.6061-1, 58.6065-1, 58.6071-1, 58.6091-1,
58.6107-1, 58.6109-1, 58.6151-1, 58.6694-1, 58.6695-1, and 58.6696-1 would be
applicable to stock repurchase excise tax returns and claims for refund required to be
filed after the date of publication of final regulations in the Federal Register.
Statement of Availability for IRS Documents
Any IRS Revenue Procedure, Revenue Ruling, Notice, or other guidance cited in
this preamble is published in the Internal Revenue Bulletin (or Cumulative Bulletin) and
is available from the Superintendent of Documents, U.S. Government Publishing Office,
Washington, DC 20402, or by visiting the IRS website at https://www.irs.gov.
Special Analyses
I. Regulatory Planning and Review—Economic Analysis
Pursuant to the Memorandum of Agreement, Review of Treasury Regulations
under Executive Order 12866 (June 9, 2023), tax regulatory actions issued by the IRS
are not subject to the requirements of section 6 of Executive Order 12866, as amended.
Therefore, a regulatory impact assessment is not required.
II. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520) (PRA) requires
that a Federal agency obtain the approval of Office of Management and Budget (OMB)
before collecting information from the public, whether such collection of information is
mandatory, voluntary, or required to obtain or retain a benefit.
The collections of information in these proposed regulations contain reporting
and recordkeeping requirements in §§58.6001-1 and 58.6011-1 necessary for the IRS
to accurately determine the stock repurchase excise tax due. The collection of
information is required by law to comply with the provisions of section 4501 of the Code
as enacted by section 10201 of the IRA. A Federal agency may not conduct or
sponsor, and a person is not required to respond to, a collection of information unless

the collection of information displays a valid control number.
The recordkeeping requirements mentioned within these proposed regulations
are considered general tax records under section 6001. These records are required for
the IRS to validate that taxpayers have met the regulatory requirements. For PRA
purposes, general tax records are already approved by OMB under 1545-0123 for
business filers and 1545-0074 for individual filers.
The reporting requirements, including the written penalty of perjury statement,
will be covered within Form 7208 and its instructions. The IRS is seeking OMB
approval and requesting a new OMB control number for Form 7208 in accordance with
the procedures outlined in 5 CFR 1320.10.
These proposed regulations mention reporting, third-party disclosures, and
recordkeeping requirements for tax preparers. These proposed regulations are not
changing the requirements contained within §1.6107-1, which is included in 1545-1231.
III. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby
certified that these proposed regulations will not have a significant economic impact on
a substantial number of small entities. This certification is based on the fact that these
proposed regulations provide specific administrative, procedural, and recordkeeping
rules that would apply only to certain tax return preparers and to publicly traded
corporations, which tends to consist of larger businesses. Specifically, based on data
available to the IRS, for tax year 2021, 4,366 corporations reported publicly traded
common stock. Of those corporations, 2,407 (over 55 percent) reported gross receipts
over $100 million, and 3,272 (approximately 75 percent) reported gross receipts over
$10 million. Meanwhile, for tax year 2021, the IRS received 7,464,790 Corporation
Income Tax Returns and 4,710,457 U.S. Returns of Partnership Income. IRS
Publication 6292, Fiscal Year Projections for the United States: 2022-2029, Fall 2022,

Table 2. Of these corporation and partnership returns for tax year 2021, 11,685,207
reported total assets below $10 million. Thus, the number of corporations affected by
these proposed regulations that reported total assets below $10 million is less than one
hundredth of one percent of the total number of businesses that reported total assets
below $10 million for tax year 2021. Therefore, these proposed regulations will not
create additional obligations for, or impose an economic impact on, a substantial
number of small entities. Accordingly, the Secretary certifies that the proposed
regulations will not have a significant economic impact on a substantial number of small
entities and a regulatory flexibility analysis under the Regulatory Flexibility Act is not
required.
IV. Section 7805(f)
Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking has
been submitted to the Chief Counsel for the Office of Advocacy of the Small Business
Administration for comment on its impact on small business.
V. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995 requires that
agencies assess anticipated costs and benefits and take certain other actions before
issuing a final rule that includes any Federal mandate that may result in expenditures in
any one year by a State, local, or Tribal government, in the aggregate, or by the private
sector, of $100 million in 1995 dollars, updated annually for inflation. These proposed
regulations do not include any Federal mandate that may result in expenditures by
State, local, or Tribal governments, or by the private sector in excess of that threshold.
VI. Executive Order 13132: Federalism
Executive Order 13132 (Federalism) prohibits an agency (to the extent
practicable and permitted by law) from promulgating any regulation that has federalism
implications, unless the agency meets the consultation and funding requirements of

section 6 of the Executive order, if the rule either imposes substantial, direct compliance
costs on State and local governments, and is not required by statute, or preempts State
law. This proposed rule does not have federalism implications and does not impose
substantial direct compliance costs on State and local governments or preempt State
law within the meaning of the Executive order.
Comments and Requests for a Public Hearing
Before the proposed regulations are adopted as final regulations, consideration
will be given to any comments that are submitted timely to the IRS as prescribed in this
preamble under the ADDRESSES heading. The Treasury Department and the IRS
request comments on all aspects of the proposed regulations and on forms related to
the proposed regulations. All commenters are strongly encouraged to submit
comments electronically. The Treasury Department and the IRS will publish for public
availability any comment submitted electronically or on paper to the IRS’s public docket
on https://www.regulations.gov.
A public hearing will be scheduled if requested in writing by any person who
timely submits electronic or written comments. Requests for a public hearing are
encouraged to be made electronically. If a public hearing is scheduled, a notice of the
date and time for the public hearing will be published in the Federal Register. A
telephonic option will remain available for those who prefer to attend or testify at a
public hearing by telephone. Any telephonic hearing will be made accessible to people
with disabilities.
Drafting Information
The principal author of these regulations is Samuel G. Trammell of the Office of
Associate Chief Counsel (Corporate). However, other personnel from the Treasury
Department and the IRS participated in their development.
List of Subjects in 26 CFR Part 58

Excise taxes, Stock repurchase excise tax, Reporting and recordkeeping
requirements.
Proposed Amendments to the Regulations
Accordingly, the Treasury Department and the IRS propose to amend 26 CFR
part 58, as proposed to be added elsewhere in this issue of the Federal Register, as
follows:
PART 58—STOCK REPURCHASE EXCISE TAX
Paragraph 1. The authority citation for part 58 is revised to read as follows:
Authority: 26 U.S.C. 4501(f) and 7805.
Section 58.6001-1 also issued under 26 U.S.C. 6001;
Section 58.6011-1 also issued under 26 U.S.C. 6011(a);
Section 58.6060-1 also issued under 26 U.S.C. 6060(a);
Section 58.6061-1 also issued under 26 U.S.C. 6061(a);
Section 58.6065-1 also issued under 26 U.S.C. 6065;
Section 58.6071-1 also issued under 26 U.S.C. 6071(a);
Section 58.6091-1 also issued under 26 U.S.C. 6091(a);
Section 58.6107-1 also issued under 26 U.S.C. 6107;
Section 58.6109-1 also issued under 26 U.S.C. 6109(a);
Section 58.6151-1 also issued under 26 U.S.C. 6151;
Section 58.6694-1 also issued under 26 U.S.C. 6694;
Section 58.6695-1 also issued under 26 U.S.C. 6695;
Section 58.6696-1 also issued under 26 U.S.C. 6696.
Par 2. Add subpart B to read as follows:
Subpart B—Procedure and Administration
Sec.
58.6001-1 Notice or regulations requiring records, statements, and special returns.
58.6011-1 General requirement of return, statement, or list.

58.6060-1 Reporting requirements for tax return preparers.
58.6061-1 Signing of returns and other documents.
58.6065-1 Verification of returns.
58.6071-1 Time for filing returns.
58.6091-1 Place for filing tax returns under chapter 37 of the Internal Revenue Code.
58.6107-1 Tax return preparer must furnish copy of return or claim for refund to
taxpayer and must retain a copy or record.
58.6109-1 Tax return preparers furnishing identifying numbers for returns or claims for
refund.
58.6151-1 Time and place for paying of tax shown on returns.
58.6694-1 Section 6694 penalties.
58.6695-1 Other assessable penalties with respect to the preparation of tax returns or
claims for refund for other persons.
58.6696-1 Claims for credit or refund by tax return preparers.
Subpart B—Procedure and Administration
§58.6001-1 Notice or regulations requiring records, statements, and special
returns.
(a) In general. Any covered corporation (as defined in section 4501(b) of the
Internal Revenue Code (Code)), or any person treated as a covered corporation (as
described in section 4501(d)(1)(A) or (d)(2)(A)), that makes a repurchase (as defined in
section 4501(c)(1)), or that is treated as making a repurchase under section
4501(c)(2)(A), (d)(1)(B), or (d)(2)(B), must keep such complete and detailed records as
are sufficient to establish accurately the amount of repurchases, adjustments, or
exceptions required to be shown by the covered corporation or person treated as a
covered corporation in any stock repurchase excise tax return (as defined in §58.60111(b)).
(b) Notice by IRS requiring returns, statements, or the keeping of records. The
Internal Revenue Service (IRS) may require any covered corporation or person treated
as a covered corporation, by notice served upon such corporation or person, to make
such returns, render such statements, or keep such specific records as will enable the
IRS to determine whether or not such corporation or person is liable for tax under
chapter 37 of the Code.
(c) Retention of records. The records required by this section must be kept at all

times available for inspection by the IRS and must be retained for so long as the
contents thereof may become material in the administration of any internal revenue law.
(d) Applicability date. This section applies to repurchases, adjustments, or
exceptions required to be shown in any stock repurchase excise tax return required to
be filed after [DATE OF PUBLICATION OF FINAL REGULATIONS IN THE FEDERAL
REGISTER], and during taxable years ending after [DATE OF PUBLICATION OF
FINAL REGULATIONS IN THE FEDERAL REGISTER].
§58.6011-1 General requirement of return, statement, or list.
(a) In general. Any covered corporation (as defined in the Internal Revenue
Code (Code), section 4501 (section 4501), subsection (b)), or any person treated as a
covered corporation (as described in section 4501(d)(1)(A) or (d)(2)(A)), that makes a
repurchase (as defined in section 4501(c)(1)), or that is treated as making a repurchase
under section 4501(c)(2)(A), (d)(1)(B), or (d)(2)(B), after December 31, 2022, must file a
stock repurchase excise tax return.
(b) Stock Repurchase Excise Tax Return. For purposes of this part, the term
stock repurchase excise tax return means a Form 720, Quarterly Federal Excise Tax
Return, with an attached Form 7208, Excise Tax on Repurchase of Corporate Stock, or
any other forms, schedules, or statements prescribed by the Commissioner for the
purpose of making a return to report the tax under chapter 37 of the Code.
(c) Special rules for multiple section 4501(d) covered corporations with respect to
a covered surrogate foreign corporation. For special rules applicable for persons
treated as a covered corporation (as described in section 4501(d)(2)(A)) with respect to
a covered surrogate foreign corporation (as defined in section 4501(d)(3)(B)), see
§58.4501-7(d)(2).
(d) Applicability date. This section applies to stock repurchase excise tax returns
required to be filed after [DATE OF PUBLICATION OF FINAL REGULATIONS IN THE

FEDERAL REGISTER], and during taxable years ending after [DATE OF
PUBLICATION OF FINAL REGULATIONS IN THE FEDERAL REGISTER].
§58.6060-1 Reporting requirements for tax return preparers.
(a) In general. A person that engages or employs one or more signing tax return
preparers (as defined in §301.7701-15(b)(1) of this chapter) to prepare a stock
repurchase excise tax return (as defined in §58.6011-1(b)) or claim for refund of tax
under chapter 37 of the Internal Revenue Code, other than for the person, at any time
during a return period, must satisfy the recordkeeping and inspection requirements in
the manner stated in §1.6060-1 of this chapter.
(b) Applicability date. This section applies to stock repurchase excise tax returns
and claims for refund required to be filed after [DATE OF PUBLICATION OF FINAL
REGULATIONS IN THE FEDERAL REGISTER], and during taxable years ending after
[DATE OF PUBLICATION OF FINAL REGULATIONS IN THE FEDERAL REGISTER].
§58.6061-1 Signing of returns and other documents.
(a) In general. Any stock repurchase excise tax return (as defined in §58.60111(b)), statement, or other document required to be made with respect to the tax
imposed by chapter 37 of the Internal Revenue Code (chapter 37) must be signed by
the person required to file the return, statement, or other document, or by the persons
required or duly authorized to sign in accordance with the regulations, forms, or
instructions prescribed with respect to such return, statement, or document. An
individual’s signature on such a return, statement, or other document is prima facie
evidence that the individual is authorized to sign the return, statement, or other
document.
(b) Applicability date. This section applies to stock repurchase excise tax
returns, statements, or other documents that are required to be made with respect to
the tax imposed by chapter 37 and required to be filed after [DATE OF PUBLICATION

OF FINAL REGULATIONS IN THE FEDERAL REGISTER], and during taxable years
ending after [DATE OF PUBLICATION OF FINAL REGULATIONS IN THE FEDERAL
REGISTER].
§58.6065-1 Verification of returns.
(a) In general. If either a stock repurchase excise tax return (as defined in
§58.6011-1(b)), statement, or other document made with respect to any tax imposed by
chapter 37 of the Internal Revenue Code (chapter 37), or the related form and
instructions, requires that such return, statement, or other document contain or be
verified by a written declaration that it is made under the penalties of perjury, then it
must be so verified by the person or persons required to sign such return, statement, or
other document. In addition, any other statement or document submitted under any
provision of chapter 37, subtitle F, or regulations under this part with respect to any tax
imposed by chapter 37 may be required to contain or be verified by a written declaration
that it is made under the penalties of perjury.
(b) Applicability date. This section applies to stock repurchase excise tax
returns, statements, or other documents that are required to be made with respect to
the tax imposed by chapter 37 and required to be filed after [DATE OF PUBLICATION
OF FINAL REGULATIONS IN THE FEDERAL REGISTER], and during taxable years
ending after [DATE OF PUBLICATION OF FINAL REGULATIONS IN THE FEDERAL
REGISTER].
§58.6071-1 Time for filing returns.
(a) In general. Except as provided in paragraph (c) of this section, a stock
repurchase excise tax return required by §58.6011-1(a) must be filed by the due date of
the Form 720, Quarterly Federal Excise Tax Return, that is for the first full calendar
quarter after the taxable year of the covered corporation, or person treated as a covered
corporation (as described in the Internal Revenue Code (Code), section 4501 (section

4501), paragraph (d)(1)(A) or (d)(2)(A)), ends.
(b) Example. Corporation X is a covered corporation with a taxable year that
ends on December 31. During its 2024 taxable year, Corporation X makes a
repurchase within the meaning of section 4501(c)(1). Because Corporation X’s taxable
year ends in the fourth quarter of the calendar year, Corporation X must file a stock
repurchase excise tax return reporting liability for the tax imposed by chapter 37 of the
Code by the due date for a first-quarter Form 720 (that is, April 30, 2025).
(c) Taxable years ending before date of publication of final regulations. With
respect to a covered corporation, or person treated as a covered corporation, with a
taxable year ending after December 31, 2022, and on or before [EFFECTIVE DATE OF
FINAL RULE], the stock repurchase excise tax return required by §58.6011-1(a) for
such taxable year must be filed by the due date of the Form 720 for the first full calendar
quarter after [DATE OF PUBLICATION OF FINAL REGULATIONS IN THE FEDERAL
REGISTER]. If a covered corporation, or person treated as a covered corporation, has
more than one taxable year ending after December 31, 2022, and on or before
[EFFECTIVE DATE OF FINAL RULE], the covered corporation, or person treated as a
covered corporation, should file a single Form 720 with two separate Forms 7208 (one
for each taxable year) attached.
(d) Example. Corporation Y is a covered corporation with a taxable year ending
December 31, 2023. During its 2023 taxable year, Corporation Y makes a repurchase
within the meaning of section 4501(c)(1). If the date the Treasury decision adopting
these rules as final regulations is published in the Federal Register were September
16, 2024, Corporation Y would be required to file the stock repurchase excise tax return
for its 2023 taxable year by the due date for a fourth-quarter Form 720 (that is, January
31, 2025).
(e) Applicability date. This section applies to stock repurchase excise tax returns

required to be filed after [DATE OF PUBLICATION OF FINAL REGULATIONS IN THE
FEDERAL REGISTER], and during taxable years ending after [DATE OF
PUBLICATION OF FINAL REGULATIONS IN THE FEDERAL REGISTER].
§58.6091-1 Place for filing tax returns under chapter 37 of the Internal Revenue
Code.
(a) In general. Except as provided in paragraphs (b) and (c) of this section, stock
repurchase excise tax returns required by §58.6011-1(a) must be filed in accordance
with the instructions applicable to such returns.
(b) Hand-carried returns. Notwithstanding paragraph (a) of this section, stock
repurchase excise tax returns that are filed by hand carrying must be filed with any
person assigned the responsibility to receive hand-carried returns in the local Internal
Revenue Service (IRS) office that serves the principal place of business, principal office,
or agency of the taxpayer.
(c) Exceptional cases. Notwithstanding paragraph (a) of this section, the
Commissioner may permit the filing of any stock repurchase excise tax return in any
local IRS office.
(d) Applicability date. This section applies to stock repurchase excise tax returns
required to be filed after [DATE OF PUBLICATION OF FINAL REGULATIONS IN THE
FEDERAL REGISTER], and during taxable years ending after [DATE OF
PUBLICATION OF FINAL REGULATIONS IN THE FEDERAL REGISTER].
§58.6107-1 Tax return preparer must furnish copy of return or claim for refund to
taxpayer and must retain a copy or record.
(a) In general. A person who is a signing tax return preparer (as defined in
§301.7701-15(b)(1) of this chapter) of any stock repurchase excise tax return required
by §58.6011-1(a) or claim for refund of tax under chapter 37 of the Internal Revenue
Code must furnish a completed copy of the stock repurchase excise tax return or claim
for refund to the taxpayer and retain a completed copy or record in the manner stated in

§1.6107-1 of this chapter.
(b) Applicability date. This section applies to stock repurchase excise tax returns
and claims for refund required to be filed after [DATE OF PUBLICATION OF FINAL
REGULATIONS IN THE FEDERAL REGISTER], and during taxable years ending after
[DATE OF PUBLICATION OF FINAL REGULATIONS IN THE FEDERAL REGISTER].
§58.6109-1 Tax return preparers furnishing identifying numbers for returns or
claims for refund.
(a) In general. Each stock repurchase excise tax return required by §58.60111(a) or claim for refund of tax under chapter 37 of the Internal Revenue Code prepared
by one or more signing tax return preparers (as defined in §301.7701-15(b)(1) of this
chapter) must include the identifying number of the preparer required by §1.6695-1(b) of
this chapter to sign the stock repurchase excise tax return or claim for refund in the
manner stated in §1.6109-2 of this chapter.
(b) Applicability date. This section applies to stock repurchase excise tax returns
and claims for refund required to be filed after [DATE OF PUBLICATION OF FINAL
REGULATIONS IN THE FEDERAL REGISTER], and during taxable years ending after
[DATE OF PUBLICATION OF FINAL REGULATIONS IN THE FEDERAL REGISTER].
§58.6151-1 Time and place for paying of tax shown on returns.
(a) In general. The tax shown on any stock repurchase excise tax return
required by §58.6011-1(a) must, without assessment or notice and demand, be paid to
the Internal Revenue Service at the time and place for filing such stock repurchase
excise tax return. For provisions relating to the time and place for filing the stock
repurchase excise tax return required under §58.6011-1(a), see §§58.6071-1 and
58.6091-1.
(b) Applicability date. This section applies to payments of stock repurchase
excise tax required to be paid after [DATE OF PUBLICATION OF FINAL
REGULATIONS IN THE FEDERAL REGISTER], and during taxable years ending after

[DATE OF PUBLICATION OF FINAL REGULATIONS IN THE FEDERAL REGISTER].
§58.6694-1 Section 6694 penalties.
(a) Penalties applicable to tax return preparer. For general definitions regarding
penalties under section 6694 of the Internal Revenue Code (section 6694) applicable to
preparers of tax returns or claims for refund of tax under chapter 37 of the Code, see
§1.6694-1 of this chapter.
(b) Penalties for understatement due to an unreasonable position. A person who
is a tax return preparer of any return or claim for refund of tax under chapter 37 may be
subject to penalties under section 6694(a) in the manner stated in §1.6694-2 of this
chapter.
(c) Penalties for understatement due to willful, reckless, or intentional conduct. A
person who is a tax return preparer of any return or claim for refund of tax under chapter
37 may be subject to penalties under section 6694(b) in the manner stated in §1.6694-3
of this chapter.
(d) Extension of period of collection when tax return preparer pays 15 percent of
a penalty for understatement of taxpayer’s liability and certain other procedural matters.
The rules under §1.6694-4 of this chapter, relating to the extension of period of
collection when a tax return preparer who prepared a return or claim for refund for tax
pays 15 percent of a penalty for understatement of taxpayer’s liability and procedural
matters relating to the investigation, assessment, and collection of the penalties under
sections 6694(a) and (b), apply to a tax return preparer who prepared a return or claim
for refund for tax under chapter 37 of the Code.
(e) Applicability date. This section applies to returns and claims for refund filed,
and advice provided, after [DATE OF PUBLICATION OF FINAL REGULATIONS IN
THE FEDERAL REGISTER], and during taxable years ending after [DATE OF
PUBLICATION OF FINAL REGULATIONS IN THE FEDERAL REGISTER].

§58.6695-1 Other assessable penalties with respect to the preparation of tax
returns or claims for refund for other persons.
(a) In general. A person who is a tax return preparer of any return or claim for
refund of tax under chapter 37 of the Internal Revenue Code (Code) may be subject to
penalties for failure to furnish a copy to the taxpayer under section 6695(a) of the Code,
failure to sign the return under section 6695(b), failure to furnish an identifying number
under section 6695(c), failure to retain a copy or list under section 6695(d), failure to file
a correct information return under section 6695(e), and endorsement or negotiation of a
check under section 6695(f), in the manner stated in §1.6695-1 of this chapter.
(b) Applicability date. This section applies to returns and claims for refund filed
after [DATE OF PUBLICATION OF FINAL REGULATIONS IN THE FEDERAL
REGISTER], and during taxable years ending after [DATE OF PUBLICATION OF
FINAL REGULATIONS IN THE FEDERAL REGISTER].
§58.6696-1 Claims for credit or refund by tax return preparers.
(a) In general. The rules under §1.6696-1 of this chapter apply to claims for
credit or refund by a tax return preparer who prepared a return or claim for credit or
refund for tax under chapter 37 of the Internal Revenue Code.
(b) Applicability date. This section applies to returns and claims for credit or
refund filed, and advice provided, after [DATE OF PUBLICATION OF FINAL
REGULATIONS IN THE FEDERAL REGISTER], and during taxable years ending after
[DATE OF PUBLICATION OF FINAL REGULATIONS IN THE FEDERAL REGISTER].

Douglas W. O’Donnell,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2024-07118 Filed: 4/9/2024 4:15 pm; Publication Date: 4/12/2024]