IRS Issues Guidance for Corporate Alternative Minimum Tax

The Internal Revenue Service (IRS) recently issued Notice 2023-64 to provide additional interim guidance to assist corporations in determining the applicability and calculation of the new corporate alternative minimum tax (CAMT). The new CAMT was enacted under the Inflation Reduction Act of 2022. It imposes a 15% minimum tax on the adjusted financial statement income (AFSI) of large corporations for taxable years beginning after December 31, 2022. The CAMT generally applies to large corporations with average annual financial statement income exceeding $1 billion. This notice supplements guidance issued earlier this year in Notice 2023-07, Notice 2023-20, and Notice 2023-42, and it will be consistent with forthcoming proposed regulations.

The notice includes the following guidance and clarification:

• Definition of applicable financial statements, for purposes of the CAMT
• General rules for determining AFSI for a consolidated group
• AFSI adjustments required to prevent duplications or omissions
• AFSI adjustments needed for certain taxes, credits, and Section 168 property
• Rules for calculating net operating losses
• Rules for determining who is an applicable corporation subject to CAMT

Because of the complexities involved in determining the CAMT liability, earlier guidance provided that the IRS will waive the penalty for a corporation’s estimated income tax with respect to its CAMT for a taxable year that begins after December 31, 2022, and before January 1, 2024.

Finally, the notice provides a request for comments and the procedure for submitting such comments by October 12, 2023.

If you have questions or concerns related to the new tax or how it impacts your income tax liability, please contact our professionals listed below.

TECHNICAL INFORMATION CONTACTS:
Ian Boccaccio
Principal and Practice Leader
Ryan
860.985.3234
ian.boccaccio@ryan.com

Mary Bernard
Director
Ryan
401.272.3363
mary.bernard@ryan.com

The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.