The guidance offers a simplified method to determine “applicable corporation” status under IRC Sec. 59(k), increasing minimum thresholds and waiving some estimated tax penalties.

The US Internal Revenue Service (IRS) issued Notice 2025-27, providing interim guidance on the corporate alternative minimum tax (CAMT) introduced by the Inflation Reduction Act of 2022.

Notice 2025-27 will be published in Internal Revenue Bulletin 2025-26 on 23 June 2025.

The notice includes an optional simplified method for determining applicable corporation status under Internal Revenue Code (IRC) Section 59(k). It also waives certain tax additions under Section  6655 related to a corporation’s CAMT liability under Section 55.

The interim simplified method will remain in effect for any taxable year ending on or before the publication date of final regulations implementing a permanent simplified method.

The overview and background provided in the notice are as follows:

Section 1. Overview

This notice provides interim guidance regarding the application of the corporate alternative minimum tax (CAMT) and relief from certain additions to tax for an applicable corporation’s underpayment of estimated tax under Section  6655 of the Internal Revenue Code (Code). Section 3 of this notice provides an optional simplified method for determining applicable corporation status (interim simplified method). Section 4 of this notice waives certain additions to tax under Section  6655 with respect to a corporation’s CAMT liability under Section 55.

Prior to the publication of any final regulations relating to the CAMT, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) intend to issue a notice of proposed rulemaking that revises the CAMT proposed regulations described in section 2.02(2) of this notice to include a method for determining applicable corporation status similar to the interim simplified method as well as other revisions.

Section 2. Background

P.01 Overview of the CAMT. Section 10101 of Public Law 117-169, 136 Stat. 1818, 1818-1828 (August 16, 2022), commonly referred to as the Inflation Reduction Act of 2022, amended Section  55 to impose the CAMT based on the “adjusted financial statement income” (AFSI) of an “applicable corporation” for taxable years beginning after 31 December 2022.

The definition of “applicable corporation” is provided in Section 59(k)(1) and described in Section 2.03 of this notice. Section 55(a) provides that, for the taxable year of an applicable corporation, the amount of CAMT imposed by Section 55 equals the excess (if any) of (i) the tentative minimum tax for the taxable year, over (ii) the sum of the regular tax, as defined in Section 55(c), for the taxable year plus the tax imposed under Section 59A.

Section 55(b)(2)(A) provides that, in the case of an applicable corporation, the tentative minimum tax for the taxable year is the excess of (i) 15% of AFSI for the taxable year (as determined under Section  56A), over (ii) the CAMT foreign tax credit for the taxable year (as determined under Section  59(l)).

In the case of any corporation that is not an applicable corporation, Section  55(b)(2)(B) provides that the tentative minimum tax for the taxable year is zero.

Earlier, the US Treasury and IRS announced an extension for submitting comments on the proposed regulations (REG-112129-23) concerning corporate alternative minimum tax (CAMT) on 4 December 2024.