The Inflation Reduction Act imposes a 1% excise tax on certain repurchases of stock of publicly traded US corporations (“Covered Corporations”) effected after December 31, 2022 (the “Excise Tax”). On December 27, 2022, the Department of the Treasury (“Treasury”) and the IRS issued Notice 2023-2 (the “Notice”), providing interim guidance on the Excise Tax. The Excise Tax generally applies to the fair market value of stock repurchased in a taxable year, net of the fair market value of stock issued in the same taxable year, with certain modifications. The Notice announces that proposed regulations addressing the Excise Tax are forthcoming and that taxpayers may rely on the Notice until such regulations are issued. This post highlights key guidance from the Notice as it relates to common M&A and capital market transactions.