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IRS Clarifies Rules for Corporate Alternative Minimum Tax

S.J. Steinhardt
Published Date:
Sep 13, 2023

The IRS has issued Notice 2023-64 to provide interim guidance on the potential application and computation of the corporate alternative minimum tax (CAMT).

The CAMT, which took effect in January, was created by the Inflation Reduction Act of 2022. It  imposes a 15 percent minimum tax on the adjusted financial statement income of certain large corporations for taxable years beginning in 2023. Taxpayers generally affected by the CAMT are corporations, including insurance companies, with an average annual adjusted financial statement income exceeding $1 billion.

The IRS and the Treasury Department had previously issued a notice regarding penalty relief for corporations that have yet to pay their estimated CAMT.

The new notice provides a list of financial statements that meet the definition of an applicable financial statement as well as priority rules for identifying a taxpayer's applicable financial statement. It also  provides general rules for determining a taxpayer's adjusted financial statement income, including when the taxpayer's financial results are reported on a consolidated financial statement.

The notice includes guidance on when corporations are subject to CAMT, CAMT foreign tax credits, tax consolidated groups, foreign corporations, depreciable property, wireless spectrum, duplications and omissions of certain items, and financial statement net operating losses.

To learn about the latest and most relevant business tax issues, attend the Foundation for Accounting Education’s Tax Planning for Business Entities Conference on Dec. 5.

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