On Thursday, August 4, 2022, Senate Democrats announced that in order to obtain the support of Senator Kyrsten Sinema for the Inflation Reduction Act of 2022 (the “Act”), the Act will no longer include the previously proposed changes to the taxation of carried interest. We previously discussed those proposed changes here. Senator Sinema’s support is contingent on eliminating the carried interest provisions in favor of another revenue-raising proposal—an excise tax on stock buybacks. Although this will come as welcome news to fund managers, Senator Sinema released a statement yesterday expressing her support for a further negotiation on a separate bill regarding carried interest. However, any separate legislation this year would almost certainly require the Senate to meet the 60-vote threshold to avoid a filibuster; therefore, the prospects for any standalone legislation on the taxation of carried interest are uncertain.