Washington, D.C. (September 28, 2026) – In a letter submitted to the Department of Treasury and the Internal Revenue Service (IRS), the American Institute of CPAs (AICPA) recommended improvements to the Corporate Alternative Minimum Tax (CAMT) guidance for financially troubled companies, specifically Notices 2025-46 and 2026-07. These notices address the application of the CAMT to domestic corporate transactions, troubled companies and tax consolidated groups.
The letter’s specific recommendations include:
I. Treatment of cancellation of debt income (CODI)
Refine the order of the CAMT CODI attribute reduction rule.
Refine the liability floor limitation.
Refine the catch-all CAMT basis reduction rule.
Clarify the coordination between the CAMT attribute reduction with subsequent adjusted financial statement remeasurements.
Provide a true-up mechanism to address applicable financial statement (AFS) and Tax CODI timing differences.
II. Insolvency Exclusion
Refine and clarify the insolvency exclusion rules.
III. Bankruptcy Exclusion
Align the “debtor” rule with section 108(d)(2).
Clarify eligibility for the bankruptcy exclusion.
Exclude from applicable financial statement income (AFSI) one-time AFS deconsolidation effects.
IV. Emergence from Bankruptcy
Clarify the AFSI consequences resulting from fresh start accounting.
Treat emergence from bankruptcy as a qualifying ownership change.
“The AICPA’s recommendations are intended to promote consistency in CAMT guidance for financially troubled companies, reduce the compliance burden, improve administrability and provide greater certainty for taxpayers and tax practitioners,” said Ning Yim, Senior Manager, AICPA Tax Policy & Advocacy. “As Treasury and the IRS continue to provide CAMT guidance, these recommendations would help ensure the rules are workable in practice and provide greater certainty for financially troubled companies and the tax professionals who advise them.”
About the American Institute of CPAs
The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education, and consulting. A founding member of the Association of International Certified Professional Accountants, the AICPA sets ethical standards for the profession, attestation standards, and U.S. auditing standards for private companies, not-for-profit organizations, and federal, state, and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, partners across the profession to build future talent, and drives continuing education to advance the vitality, relevance, and quality of the profession.
# # #
Background:
January 15, 2025 - AICPA Corporate Alternative Minimum Tax (CAMT)
August 7, 2026 - AICPA Comment Letter on CAMT Notices 2025-46, 2025-49 and 2026-7
Contact: Veronica L. Vera
202-434-9215
Veronica.Vera@aicpa-cima.com