The IRS and the Treasury Department issued Notice 2023-07 on Dec. 27, which provides interim guidance regarding the application of the new corporate alternative minimum tax (CAMT) until the issuance of proposed regulations.

The Inflation Reduction Act created the CAMT, which imposes a 15% minimum tax on the adjusted financial statement income of large corporations for taxable years beginning after Dec. 31, 2022. The CAMT generally applies to large corporations with average annual financial statement income exceeding $1 billion. The IRS and the Treasury Department said Notice 2023-7 was issued to provide certainty to taxpayers in advance of the CAMT effective date.

In particular, Notice 2023-7 clarifies which corporations the CAMT applies to and how the alternative minimum tax is calculated. It also provides taxpayers with answers to basic questions about how certain transactions may be treated and certain adjustments that may be taken into account for purposes of the alternative minimum tax, including adjustments for depreciation and certain tax credits. In addition, Notice 2023-7 gives smaller corporations an easy method for determining that the new alternative minimum tax does not apply to them.