KPMG report: Analysis and observations on the proposed CAMT regulations
A report that summarizes a number of key issues from the proposed regulations and provides observations.
The U.S. Treasury Department and IRS in September 2024 released proposed regulations (REG-112129-23) relating to the corporate alternative minimum tax (CAMT) created by Pub. L. No. 117-169 (commonly called the “Inflation Reduction Act of 2022” or “IRA”). Concurrent with the release of the proposed regulations, the IRS released Notice 2024-66, providing a waiver of the addition to tax under section 6655 for underpayment of estimated income tax with regards to CAMT liability for tax years beginning in 2024.
The proposed regulations address a number of issues regarding the application of CAMT that remained after the guidance provided in previous notices. However, many previously identified issues remain unaddressed. Furthermore, the proposed regulations would provide exceptionally limited relief from the complexity of CAMT by way of safe harbors and de minimis rules. As such, many taxpayers who are not in scope of CAMT as applicable corporations will likely need to expend significant time complying with this novel regime.
Most taxpayers generally do not need to revisit their 2023 tax return positions and may generally continue relying on the statute or some combination of statute and guidance from the notices for 2023 tax returns. However, fiscal year taxpayers with tax years ending after September 13, 2024, may need to consider certain provisions for their 2023–2024 tax years. Moreover, the preamble to the proposed regulations contemplates an AFSI adjustment in the year of transition to implement the final regulations if a taxpayer took a position under CAMT that is inconsistent with the final regulations. This may cause certain taxpayers to reconsider certain 2023 CAMT positions while simultaneously submitting comments highlighting the administrative challenges and impracticalities of applying the final CAMT regulations retroactively.
Read an October 2024 report prepared by KPMG LLP that summarizes a number of key issues from the proposed regulations and provides observations.