📢 Interim Guidance Aims to Cut Compliance Costs
Issued via IRS Notice 2025-27 on June 2, 2025
🏢 What is the CAMT?
💼 Corporate Alternative Minimum Tax (“Book Minimum Tax”)
🔍 Purpose:
To ensure large, profitable corporations pay at least a 15% minimum tax — even if they report lower taxable income via deductions and credits.
📘 Introduced under:
Inflation Reduction Act (IRA), 2022
📊 Calculation Base:
CAMT is based on a corporation’s Adjusted Financial Statement Income (AFSI) — a metric closer to financial accounting income than traditional taxable income.
📉 What’s the Problem?
Taxpayers and businesses said the original CAMT rules were too complex and difficult to implement.✅ The IRS responded by issuing Notice 2025-27 — offering an optional, simplified method for determining CAMT applicability for tax year 2025.
🆕 Key Changes in the Interim Guidance
| 🧠 Concept | 🔧 New Simplified Rule (2025 only) |
| AFSI Threshold for Applicability | 📉 Reduced from $1 billion to $800 million average annual AFSI over 3 years |
| AFSI Threshold for Foreign-Parented Multinationals (FPMG) | 📉 Reduced from $1 billion & $100 million to $800 million & $80 million |
| Complex Adjustments (Code Sec. 56A(c/d)) | 🚫 Disregarded in simplified method — including credit transfers and certain elections |
| Estimated Tax Penalty (Code Sec. 6655) | 🙌 Waived for corporations relying on simplified CAMT in 2025 |
❓ Who’s Affected?
✅ Applicable Corporations
Corporations with:
- 📈 Average AFSI > $1 billion (or $800M using simplified method)
- 🌎 FPMG members with U.S. AFSI > $100 million (or $80M simplified)
🚫 Not Affected:
- S Corporations
- Real Estate Investment Trusts (REITs)
- Regulated Investment Companies (RICs)
🧾🛠️ IRS Clarifies:
Using the simplified method won’t count against you in future IRS audits or violate proposed CAMT regulation reliance rules.
You may still follow the original complex method or the September 2023 proposed regulations, if preferred.
New regulations are coming — expected to permanently incorporate this simplified approach
📝 Practical Takeaways
| ✅ What You Should Know | 💡 Why It Matters |
| IRS now offers simplified CAMT thresholds | Helps reduce compliance costs and complexity |
| Estimated tax penalties waived for 2025 | Less pressure for corporations in transition |
| You can opt in to simplified method — it’s voluntary | Offers flexibility during ongoing regulatory updates |
| New permanent regs are on the way | Plan for possible reporting changes in future years |
📢 Final Thoughts
This IRS update is a win for corporations navigating complex CAMT compliance. If your business operates near the $1 billion AFSI threshold, the simplified rule for 2025 may reduce your reporting burden and offer valuable safe-harbor protections.
✅ Consult with your tax advisor to assess whether the simplified AFSI thresholds make your corporation non-applicable for CAMT in 2025.
