The American Institute of CPAs asked the Treasury Department and the Internal Revenue Service to revise three of their recent notices on the corporate alternative minimum tax.
In a
Last year, the Treasury and the Internal Revenue Service issued
The AICPA letter aims to reduce compliance burdens, prevent double counting of income, improve consistency between financial and tax reporting, and make the CAMT rules more administrable for taxpayers and tax professionals. The recommendations focus on purchase accounting and push-down accounting, domestic research and experimental (R&E) expenditures under section 174A, intangible drilling cost and the Controlled Foreign Corporations (CFC) double counting issue.
The letter requests guidance and offers recommendations in the following areas:
- Withdraw the purchase accounting, push down accounting adjustment rules and the corresponding interim rule in Section 3.04(3) of Notice 2025-46to better align CAMT with its statutory intent and reduce significant taxpayer compliance burdens. These adjustment rules require taxpayers to reverse purchase accounting and push-down accounting adjustments for CAMT purposes.
- Provide guidance under section 56A(c)(15) and section 56A(e) coordinating applicable financial statement income (AFSI) with domestic R&E expenditures under section 174A. The AICPA's letter requests guidance coordinating AFSI with section 174A domestic R&E expenditures by recommending a targeted adjustment allowing tax recovery to be reflected in AFSI when book recovery is slower, while preventing double deductions.
- Allow a common parent (or other designated agent) of a CAMT tax consolidated group to file a single Form 4626, computing CAMT on a tax consolidated group basis. That CAMT liability and related attributes should then be allocated between the separate regular tax consolidated return groups using an administrable method. Additional guidance is needed for both administrability and to avoid disputes between taxpayers and the government.
- Provide additional guidance clarifying the adjustment under section 56A(c)(13), as amended by the OBBBA. Specifically, the AICPA's letter requests guidance to assist taxpayers with determining the amount of "depletion expense that is taken into account on the taxpayer's applicable financial statement (AFS) with respect to the intangible drilling and development costs of such property" (AFS depletion).
- State that taxpayers are not required to early adopt multiple disparate provisions in order to obtain relief for the CFC double counting issue. The letter asks that until the final regulations are issued, taxpayers be allowed to rely on Notice 2024-10, interim CAMT guidance.
"The AICPA's recommendations focus on reducing unnecessary complexity, improving administrability and aligning the CAMT framework with its statutory intent and policy objectives," said Reema Patel, senior manager of AICPA tax policy and advocacy, in a statement Tuesday. "The clarity of the CAMT matters not only to affected companies and their advisors, but also to investors and the broader economy, influencing business decisions, investment plannings and financial reporting."
The changing rules and notices with the CAMT have been forcing firms like Ernst & Young to help their corporate clients continually adjust their modeling.
Enrica Ma, a principal in the Washington office of EY's national tax practice, has been closely tracking how large corporate taxpayers are navigating CAMT modeling and quarterly payment strategy. She wasn't originally seeing much of a change in their quarterly estimated payments until the most recent notice.
"I've seen most recently a dramatic change in a majority of our clients' CAMT profile," she said in an interview last month. "The timing for that was in connection with the issuance of the most recent IRS Notice 2026-7 in the middle of February of this year. We also got two major, very dramatic CAMT Notices, 2025-46 and 2025-49. When the OBBBA was released in the summer last year, there was a lot of interest and focus from a lot of our clients trying to revisit their CAMT modeling and trying to understand what those new notices mean to them because it was a very significant change from the proposed regulations and the consistency required for early adoption. A lot of new rules came out from those notices, but I would say from last summer to all the way until early this year, before the latest notice was issued, we had a lot of companies that were projecting they were CAMT taxpayers, and a few of them even what we call a permanent CAMT taxpayer. Everybody was hearing this new notice would come out, and we were waiting and looking forward to receiving it. When it came out in February, it was an extremely favorable rule change in the CAMT adjustment, particularly for the domestic R&D expenditure amortization rule, and also there's a Section 197 intangible eligible rule. For those two rules together, I'm seeing a lot of clients who, if they can apply either or both of those AFSI adjustment rules, their CAMT profile would significantly improve from CAMT taxpayer to no longer owning owning any tax, or from a permanent CAMT taxpayer to just a timing difference, like a CAMT taxpayer for a year or two."
