The AICPA has written to the IRS and Treasury for immediate guidance on various provisions of the new Alternative Minimum Corporate Tax (AMT), which was enacted as part of the Inflation Reduction Act, PL 117-169, which Congress passed in August.
“Immediate advice is particularly needed with regard to [corporate AMT] because businesses will struggle to report the impact of the minimum tax on financial returns given the number of significant issues delegated to the Treasury Department,” the AICPA wrote in a letter from Jan Lewis, CPA, Chair of the AICPA Tax Executive Committee, dated October 14, 2022.
The letter says companies focused on financial statement reporting “will face a challenge unless guidance is available when the impact will need to be disclosed in the first quarter 2023 financial statements. Companies also need immediate advice on how to properly make estimated tax payments from April 2023.”
The AICPA has already written letters to Congress in June 2022 and October 2021 oppose 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 corporations with foreign capital. The AICPA said in the October 2021 letter that it was reported that the companies’ AMT would apply to approximately 200 companies.
The most recent letter makes recommendations in five areas: financial reporting and accounting for income taxes; intercom problems; general concepts and methods and periods; international; and mergers and acquisitions matters.
“Companies should generally include the impact of a new law in the reporting period in which it is enacted,” the letter states. “Even though the law won’t be in effect until 2023, some companies will have to disclose the anticipated effects in future financial filings.”
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