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Federal Tax

Proposed Rules for Reporting Excise Tax Liability on Designated Drugs Issued

Checkpoint Federal Tax Update Staff  

· 5 minute read

Checkpoint Federal Tax Update Staff  

· 5 minute read

The IRS has issued proposed regs that will provide guidance to taxpayers on how to report their liability for the excise tax imposed on manufacturers, producers, or importers of certain designated drugs. These proposals follow the IRS’s announcement in Notice 2023-52, 2023-35 IRB 650, that it would propose regs addressing substantive and procedural issues related to the Code Sec. 5000D excise tax. (Preamble to Prop Reg REG-115559-23)

Code Sec. 5000D(b), which was created by the Inflation Reduction Act of 2022, imposes an excise tax on the sale of “designated drugs” by a manufacturer, producer, or importer during a day that falls within a period described in that section. These proposed rules address how a taxpayer would report their tax liability and satisfy other procedural requirements related to this excise tax.

The proposed rules also would except the excise tax from semimonthly deposit requirements.

Comments requested.

The IRS is seeking public comments on the proposed regs. Written comments must be received by December 2, 2023, and should be submitted electronically via the Federal eRulemaking Portal. Indicate IRS and REG-115559-23.

Requests for a public hearing must be submitted as prescribed in the “Comments and Requests for a Public Hearing” section on the Federal eRulemaking Portal.

Note. Once submitted, comments can’t be edited or withdrawn. Commenters should not include any personally identifiable information or confidential business information with their comments.

For more information see, excise tax imposed on sales by drug manufacturers of designated drugs during noncompliance period, in Checkpoint’s Federal Tax Coordinator ¶ W-6601. 


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