AICPA seeks guidance on corporate alternative minimum tax

By Martha Waggoner

The AICPA has written to the IRS and Treasury seeking immediate guidance on various provisions of the new corporate alternative minimum tax (AMT), which was enacted as part of the Inflation Reduction Act, P.L. 117-169, that Congress passed in August.

"Immediate guidance is especially needed with respect to the [corporate AMT] because companies will struggle with reporting the impact of the minimum tax in financial filings given the number of significant issues delegated to the Department of the Treasury," the AICPA wrote in a letter from Jan Lewis, CPA, chair of the AICPA Tax Executive Committee, dated Oct. 14, 2022.

The letter states that companies focused on financial statement reporting "will face a challenge unless guidance is available by the time the impact will need to be disclosed within the financial statements for the first quarter of 2023. Companies also need immediate guidance to be able to properly make estimated tax payments beginning in April 2023."

The AICPA previously wrote letters to Congress in June 2022 and October 2021 opposing the corporate AMT, which imposes a 15% tax, based on book income rather than taxable income, on corporations with financial statement income over $1 billion and $100 million on foreign-parented companies. The AICPA said in the October 2021 letter that it had been reported that the corporate AMT would apply to about 200 corporations.

The most recent letter makes recommendations in five areas: financial reporting and accounting for income taxes; passthrough issues; general concepts and methods and periods; international; and mergers-and-acquisitions issues.

"Businesses typically need to include the impact of a new law in the reporting period in which it is enacted," the letter states. "Notwithstanding that the law will not be in effect until 2023, certain companies will need to disclose the anticipated effects in upcoming financial filings."

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