Accounting
Corporate AMT rules bring complications
The Internal Revenue Service and the Treasury Department issued
The CAMT was part of the Inflation Reduction Act of 2022 with the goal of ensuring billion-dollar corporations pay more in taxes. However, the draft rules have provoked pushback, not least because of their complexities.
“The regulations are really complex in all the various aspects,” said David Strong, a partner in the tax services group at Crowe in Grand Rapids, Michigan. Among the complicating factors is depreciation.
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“Probably the one that impacts a lot of companies are going to be depreciation adjustments, where it’s viewed as a favorable type of approach,” said Strong. “You generally would add back your book depreciation to your financial statement income and take a deduction for your tax depreciation. In years where companies are taking the benefit of bonus depreciation, it certainly goes to reduce your adjusted financial statement income in determining, number one, if you’re subject to the corporate alternative minimum tax, or secondarily in computing the tax itself. But if you take a look at just those rules, they’re fairly complex in how you go about computing that adjustment. Generally you have to track through [whether] you are taking impairment losses for financial statement purposes that effectively get added back for computing your corporate AMT, and then tracking the basis difference, both from a financial statement perspective and a tax perspective.”
He expects the IRS and the Treasury to be inundated with comments from tax practitioners, corporations, and other groups ahead of a scheduled public hearing in January.
“The mindset is that it’s a lot of larger companies that are going to have sophisticated tax departments [with] people that can address some of these complex issues,” said Strong. “But I think the fallout is that we take a look at one of the aspects of the adjustment to your financial statement income deals with partnerships. Generally, if I’m a partner in a partnership, and I include that partnership income in my financial statement income, I need to make an adjustment for whatever my distributive share of the partnership’s adjusted financial statement income needs to be adjusted in, let’s say, the corporate entity’s financial statement income. That calculation generally is pushed to the partnership. That’s probably one of the areas from my client base that’s been impacted the most. If I have an investment partnership where I have a corporate entity that could be subject to the alternative minimum tax, they’re requesting that the partnership provide them with their distributed share of financial statement income. What that does is it effectively takes all the rules that apply to these larger companies and applies those to the partnership, because the partnership has to go through, as if it were that corporate entity, and give its adjusted financial statement income in order to provide that information to its partner that would be subject to the tax.”
Some of the partnerships are investment funds that have invested in the billion-dollar companies, he noted.
“The rub is those complex rules now need to be applied by smaller entities in order to provide the corporate entity that’s a partner in this partnership the requisite information they need in order to compute their corporate AMT,” said Strong.
It can get even more complicated with a tiered partnership. “The lower-tier company could be a corporation, or it could be another partnership,” said Strong. “If it’s another partnership, you have a second layer of having to do this computation. So the lower-tier partnership would have to go through and compute its AFSI, the adjusted financial statement income, and report that to the upper tier partnership, and then the upper tier partnership provides that information to the corporate entity. It can get fairly complex for companies that generally are much smaller than those that are paying the tax.”
The outcome may depend on the November election contest between Vice President Kamala Harris and former President Donald Trump. “If Harris wins the presidency, I think the shift there is to keep the corporate alternative minimum tax in place, but increase the rate from its current 15% to 21%,” said Strong. “If that’s the case, then the rules will be in place for a longer period of time.”
If Trump wins, he has expressed interest in eliminating the Inflation Reduction Act and lowering the corporate tax rate further. “The main focus of what the corporate alternative minimum tax was funding were a lot of those energy incentives that were part of the Inflation Reduction Act,” Strong noted.
The CAMT rules for a 15% minimum tax
Corporate taxpayers will also need to be aware of a safe harbor that the Treasury and the IRS provided in
“One of the things in an earlier notice that the government provided for was called a safe harbor method for determining if you’re an applicable corporation and subject to these rules or not,” said Strong. “It didn’t necessarily mean that you wouldn’t have to pay the tax if you went through this safe harbor. But generally what it did is it simplified the process of saying if these rules would apply.”
The safe harbor reduces the $1 billion in adjusted financial statement income down to $500 million for wholly domestic entities, and $50 million for foreign-parented multinational entities. But that doesn’t mean they’re off the hook completely.
“If I’m above those thresholds, even though I might not be subject to the tax itself, I still have a filing requirement,” said Strong.
Companies will still have to go through the process of completing the forms to effectively show the IRS that they’re not subject to the tax.
Jody Padar, an author and speaker known as “The Radical CPA,” and Katie Tolin, a growth strategist for CPAs, together launched a training and technology platform called XcelLabs.
XcelLabs provides solutions to help accountants use artificial technology fluently and strategically. The Pennsylvania Institute of CPAs and CPA Crossings joined with Padar and Tolin as strategic partners and investors.
“To reinvent the profession, we must start by training the professional who can then transform their firms,” Padar said in a statement. “By equipping people with data and insights that help them see things differently, they can provide better advice to their clients and firm.”
The platform includes XcelLabs Academy, a series of educational online courses on the basics of AI, being a better advisor, leadership and practice management; Navi, a proprietary tool that uses AI to help accountants turn unstructured data like emails, phone calls and meetings into insights; and training and consulting services. These offerings are currently in beta testing.
“Accountants know they need to be more advisory, but not everyone can figure out how to do it,” Tolin said in a statement. “Couple that with the fact that AI will be doing a lot of the lower-level work accountants do today, and we need to create that next level advisor now. By showing accountants how to unlock patterns in their actions and turn client conversations into emotionally intelligent advice, we can create the accounting professional of the future.”
“AI is transforming how CPAs work, and XcelLabs is focused on helping the profession evolve with it,” PICPA CEO Jennifer Cryder said in a statement. “At PICPA, we’re proud to support a mission that aligns so closely with ours: empowering firms to use AI not just for efficiency, but to drive growth, value and long-term relevance.”
The accountant the world urgently needs has evolved far beyond the traditional role we recognized just a few years ago.
The transformation of the accounting profession is not merely an anticipated change; it is a pressing reality that is currently shaping business decisions, academic programs and the expected contributions of professionals. Yet, in many areas, accounting education stubbornly clings to outdated, overly technical models that fail to connect with the actual demands of the market. We must confront a critical question: If we continue to train accountants solely to file tax reports, are we truly equipping them for the challenges of today’s world?
This shift in mindset extends beyond individual countries or educational systems; it is a global movement. The recent announcement of the
The CIMA/CGMA proposal for 2026 is not just a curriculum update; it is a powerful manifesto. This new program positions analytical thinking, strategic business partnering and technology application at the core of accounting education. It unequivocally highlights sustainability, aligning with IFRS S1 and S2, and expands the accountant’s responsibilities beyond mere numbers to encompass conscious leadership, environmental impact and corporate governance.
The current changes in the accounting profession underscore an urgent shift in expectations from both educators and employers. Today, companies of all sizes and industries demand accountants who can do far more than interpret balance sheets. They expect professionals who grasp the deeper context behind the numbers, identify inconsistencies, anticipate potential issues before they escalate into losses, and act decisively as a bridge between data and decision making.
To meet these expectations, a radical mindset shift is essential. There are firms still operating on autopilot, mindlessly repeating tasks with minimal critical analysis. Likewise, many academic programs continue to treat accounting as purely a technical discipline, disregarding the vital elements of reflection, strategy and behavioral insight. This outdated approach creates a significant mismatch. While the world forges ahead, parts of the accounting profession remain stuck in the past.
The consequences of this shift are already becoming evident. The demand for compliance, transparency and sustainability now applies not only to large corporations but also to small and mid-sized businesses. Many of these organizations rely on professionals ill-equipped to drive the necessary changes, putting both business performance and the reputation of the profession at risk.
The positive news is that accountants who are ready to thrive in this new era do not necessarily need additional degrees. What they truly need is a commitment to awareness, a dedication to continuous learning, and the courage to step beyond their comfort zones. The future of accounting is here, and it is firmly rooted in analytical, strategic and human-oriented perspectives. The 2026 curriculum is a clear indication of the changes underway. Those who fail to think critically and holistically will be left behind.
In contrast, accountants who see the big picture, understand the ripple effects of their decisions, and actively contribute to the financial and ethical health of organizations will undeniably remain indispensable, anywhere in the world.
Congressional Republicans are siding with Donald Trump in the messy divorce between the president and Elon Musk, an optimistic sign for eventual passage of a tax cut bill at the root of the two billionaires’ public feud.
Lawmakers are largely taking their cues from Trump and sticking by the $3 trillion bill at the center of the White House’s economic agenda. Musk, the biggest political donor of the 2024 cycle, has threatened to help primary anyone who votes for the legislation, but lawmakers are betting that staying in the president’s good graces is the safer path to political survival.
“The tax bill is not in jeopardy. We are going to deliver on that,” House Speaker Mike Johnson told reporters on Friday.
“I’ll tell you what — do not doubt, don’t second guess and do not challenge the President of the United States Donald Trump,” he added. “He is the leader of the party. He’s the most consequential political figure of our time.”
A fight between Trump and Musk exploded into public view this week. The sparring started with the tech titan calling the president’s tax bill a “disgusting abomination,” but quickly escalated to more personal attacks and Trump threatening to cancel all federal contracts and subsidies to Musk’s companies, such as Tesla Inc. and SpaceX which have benefitted from government ties.
Republicans on Capitol Hill, who had — until recently — publicly embraced Musk, said they weren’t swayed by the billionaire’s criticism that the bill cost too much. Lawmakers have refuted official estimates of the package, saying that the tax cuts for households, small businesses and politically important groups — including hospitality and hourly workers — will generate enough economic growth to offset the price tag.
“I don’t tell my friend Elon, I don’t argue with him about how to build rockets, and I wish he wouldn’t argue with me about how to craft legislation and pass it,” Johnson told CNBC earlier Friday.
House Budget Committee Chair Jodey Arrington told reporters that House lawmakers are focused on working with the Senate as it revises the bill to make sure the legislation has the political support in both chambers to make it to Trump’s desk for his signature.
“We move past the drama and we get the substance of what is needed to make the modest improvements that can be made,” he said.
House fiscal hawks said that they hadn’t changed their prior positions on the legislation based on Musk’s statements. They also said they agree with GOP leaders that there will be other chances to make further spending cuts outside the tax bill.
Representative Tom McClintock, a fiscal conservative, said “the bill will pass because it has to pass,” adding that both Musk and Trump needed to calm down. “They both need to take a nap,” he said.
Even some of the House bill’s most vociferous critics appeared resigned to its passage. Kentucky Representative Thomas Massie, who voted against the House version, predicted that despite Musk’s objections, the Senate will make only small changes.
“The speaker is right about one thing. This barely passed the House. If they muck with it too much in the Senate, it may not pass the House again,” he said.
Trump is pressuring lawmakers to move at breakneck speed to pass the tax-cut bill, demanding they vote on the bill before the July 4 holiday. The president has been quick to blast critics of the bill — including calling Senator Rand Paul
As the legislation worked its way through the House last month, Trump took to social media to criticize holdouts and invited undecided members to the White House to compel them to support the package. It passed by one vote.
Senate Majority Leader John Thune — who is planning to unveil his chamber’s version of the bill as soon as next week — said his timeline is unmoved by Musk.
“We are already pretty far down the trail,” he said.
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