Senate Passes Inflation Reduction Act

Below is a summary of the tax provisions in the Inflation Reduction Act of 2022 (the “IRA”), as passed by the Senate, that are likely to be of most interest to U.S. corporate taxpayers, financial institutions, hedge funds, private equity funds, and their investors. The IRA now heads to the House, where Democrats hold a narrow majority, for consideration. The IRA could become law as early as this week.

Introduction

On August 7, 2022, the Senate passed the IRA. The new bill contains significantly fewer revenue-generating tax proposals than the House-passed Build Back Better Act (“BBBA”) in November 2021, which we summarized  here.  

The IRA's tax provisions include:

• establishing a 15% corporate minimum tax based on book income;