The Inflation Reduction Act, which was passed last summer, established the corporate alternative minimum tax.
On December 27, the IRS and the Treasury Department released Notice 2023-07 https://www.irs.gov/pub/irs-drop/n-23-07.pdf, which offers temporary guidance regarding the implementation of the new corporate alternative minimum tax (CAMT) prior to the publication of proposed regulations.
For taxable years beginning after December 31, 2022, the CAMT, which was established by the Inflation Reduction Act, will levy a 15% minimum tax on the adjusted financial statement income of large corporations. The CAMT typically applies to big businesses with average annual financial statement incomes over $1 billion. In order to give taxpayers assurance prior to the CAMT’s effective date, according to the IRS and the Treasury Department, Notice 2023-7 was published.
Notice 2023-7, in particular, clarifies which corporations are subject to the CAMT and how the alternative minimum tax is calculated. Additionally, it gives taxpayers basic responses to inquiries about how particular transactions may be handled and specific adjustments that may be considered when determining the alternative minimum tax, such as depreciation and tax credit adjustments. Furthermore, Notice 2023-7 provides smaller corporations with a simple way to determine whether the new alternative minimum tax applies to them.
Additionally, Notice 2023-7 requests feedback on the notice’s rules as well as a few other matters. The Internal Revenue Service (IRS) and the Treasury advise that comments be submitted within 60 days of the date Notice 2023-7 is published in the Internal Revenue Bulletin.
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