Compliance
How the IRS’s Interim CAMT Guidance (Notice 2026-7) Changes How Large Corporations Plan for Alternative Minimum Tax
New guidance under Notice 2026-7 modifies how adjusted financial statement income (AFSI) is defined, giving multinationals and domestic corporations clearer rules to reduce exposure under the Corporate Alternative Minimum Tax (CAMT).
By NomadicTax Research Team • 5-8 min read • March 24, 2026
## What is CAMT and Why Care About the Updates?
The Corporate Alternative Minimum Tax (CAMT) is a 15% minimum tax on the **adjusted financial statement income (AFSI)** of certain large corporations under sections 55, 56A, and 59 of the Internal Revenue Code. Because it treats financial statement income as a starting point, adjustments can lead to major tax liabilities when book income and tax rules diverge. ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-11.pdf?utm_source=openai))
On **February 18, 2026**, the Treasury and IRS issued **Notice 2026-7**, which adds and modifies several AFSI adjustments. The notice is *interim guidance*, meaning it'll apply until formal regulations are published. ([irs.gov](https://www.irs.gov/pub/irs-drop/n-26-07.pdf?utm_source=openai))
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## Key Changes Introduced by Notice 2026-7
| Area | What’s New | Practical Implications |
|--|--|--|
| **AFSI adjustments expanded** | Includes **repairs**, **eligible intangibles**, **domestic research amortization**, **qualified production costs**, **materials/supplies** ([kpmg.com](https://kpmg.com/us/en/taxnewsflash/news/2026/02/kpmg-report-additional-interim-camt-guidance-notice-2026-7.html?utm_source=openai)) | Corporations can reduce book–tax differences by mapping expenses carefully to align tax vs financial reporting. |
| **Financially troubled companies** | Clarifies CAMT treatment, including effects when emerging from bankruptcy. ([bdo.com](https://www.bdo.com/insights/tax/latest-interim-camt-guidance-expands-adjustments-to-financial-statement-income?utm_source=openai)) | Companies restructuring should consider CAMT exposure during both the troubled and recovery phases. |
| **International transactions** | Converts some anti-avoidance triggers for foreign covered asset transactions into rebuttable presumptions; refines how § 367(d) transfers of intangibles fit into CAMT to avoid double counting. ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-11.pdf?utm_source=openai)) | Multinationals need to revisit cross-border IP licensing or sales to ensure proper disclosures and statements. |
| **Return statement requirements** | New disclosure statements for certain adjustments, especially when invoking the rebuttable presumption. ([kpmg.com](https://kpmg.com/us/en/taxnewsflash/news/2026/02/kpmg-report-additional-interim-camt-guidance-notice-2026-7.html?utm_source=openai)) | Speak with your tax advisor about necessary statement attachments—noncompliance can lead to lost deductions or penalties. |
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## Effective Date & Reliance
- Notice 2026-7 is **effective February 18, 2026**. ([irs.gov](https://www.irs.gov/pub/irs-drop/n-26-07.pdf?utm_source=openai))
- Corporations may **rely** on its guidance for tax years beginning before the date when final CAMT regulations are published. ([irs.gov](https://www.irs.gov/pub/irs-drop/n-26-07.pdf?utm_source=openai))
- Once a taxpayer applies an adjustment (e.g., for eligible intangibles), consistency is required going forward until assets are disposed or new guidance changes rules. ([kpmg.com](https://kpmg.com/us/en/taxnewsflash/news/2026/02/kpmg-report-additional-interim-camt-guidance-notice-2026-7.html?utm_source=openai))
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## Action Items & Planning Tips
1. **Audit your AFSI adjustments**: Identify which book–tax differences (intangible amortization, production costs, etc.) may now be allowable.
2. **Review international transactions**: Especially those involving foreign-owned or foreign-influenced entities, or where intangible property or IP transfers occurred.
3. **Prepare required disclosures**: Make sure your 2026 returns include any statements required under Notice 2026-7 to document reliance or rebut presumption.
4. **Evaluate tax burden**: Model CAMT liability under both old and new interim guidance to project cash flow and effective tax rate.
5. **Monitor forthcoming regulations**: These interim rules likely to be mirrored or refined in proposed/final CAMT regs. Adjust early where possible.
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## Example Scenario
**Company X** publishes U.S. GAAP financials with significant domestic R&D expenses amortized over multiple years. Under pre-CAMT book vs tax differences, some of these R&D costs were excluded from AFSI. Now, under Notice 2026-7’s expanded adjustments, these expenses could be added back (or reduced) when computing CAMT exposure—lowering tax liability if carefully tracked.
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## Bottom Line
Notice 2026-7’s interim guidance provides **meaningful relief and clarity** for large corporations facing CAMT. While full regulations are still pending, the changes impact how book vs tax items are treated today—making it both an opportunity and a necessity for affected entities to act now.