What Is the Corporate Alternative Minimum Tax (CAMT)?
CAMT is a tax on large corporations, introduced by the Inflation Reduction Act, intended to ensure that corporations with large financial reporting income pay a minimum level of tax. Applies to taxable years beginning after 2022. (irs.gov)
Recent IRS/Treasury Guidance in Notice 2026-7
In Bulletin No. 2026-11 (March 9, 2026), Notice 2026-7 provides additional interim guidance on CAMT application:
- Adjustments to Adjusted Financial Statement Income (AFSI) rules.
- Clarification on financially troubled companies and anti-abuse rules for covered asset transactions including intangibles under section 367(d). (irs.gov)
- Guidance on applicability dates and what taxpayers can rely on, especially regarding previous Notice 2025-49 and this notice. (irs.gov)
Who Is Affected?
- Large corporations whose financial statement income exceeds certain thresholds, subject to CAMT requirements. Those that have covered transactions and those owning intangible property are especially impacted. (irs.gov)
- Companies engaged in cross-border transactions dealing with section 367(d), where property transfer under foreign vs domestic arrangements matters. (irs.gov)
Actionable Steps for Businesses
- Review financial statements and assess AFSI adjustments under CAMT to project tax liability.
- For groups with intangible property transactions, map out transfers, especially section 367(d) transactions, to identify potential room for anti-abuse rules to apply. Involve transfer pricing and legal teams.
- Monitor finalized regulations — current guidance is interim; policies may shift when rules are finalized. (irs.gov)
- Engage tax advisors early to test what qualifies as “financially troubled” and how that affects eligibility or relief provisions.
Practical Example
- A corporation with $500 million in income from financial statements but materially lower taxable income due to deductions may find its CAMT base increased by restoring non-deductible expenses under AFSI adjustments.
- A tech company transferring IP abroad under section 367(d) may now be subject to stricter scrutiny and potential adjustment; plan carefully around timing and documentation.
Timeline and What’s Next
- These interim rules are effective now and can be relied upon in tax years for which guidance is applicable. (irs.gov)
- Final regulations are expected later; until then, taxpayers relying on these interim rules should document their positions clearly.
- Consider updating internal tax models and compliance processes immediately to account for CAMT exposure.
For corporations, this isn’t just a compliance detail—it’s a strategic imperative. With CAMT in full swing, understanding adjustments, avoiding surprises, and maintaining transparent documentation are your best protections.