The IRS and Treasury Department have waived fines for billion-dollar companies that have not made estimated tax payments related to the new 15% corporate alternative tax included in last year’s Inflation Reduction Act.
On Wednesday, the Treasury and the IRS released Notice 2023-42, granting large businesses further flexibility.
IRS & Treasury Provide Penalty Relief for Unpaid Corporate Taxes
The CAMT was established by the Inflation Reduction Act last year, and it imposes a 15% minimum tax on the adjusted financial statement income of major firms for tax years beginning after December 31, 2022.
Large firms with average annual adjusted financial statement income over $1 billion are primarily subject to the new tax.
Since Congress approved the Inflation Reduction Act last summer, the IRS and the Treasury have started implementing a number of regulations.
Due to the challenges in determining a corporation’s CAMT liability and whether it is an applicable corporation subject to the new tax, the IRS announced it would waive the penalty for a corporation’s failure to pay estimated income tax with respect to the tax for a taxable year that begins after December 31, 2022, and before January 1, 2024.
Read more: Minnesota Democrats Plan To Raise Taxes And Spend Heavily In Their State Budget
Operations on Taxpayers
However, we are all aware of how difficult it is for the IRS to do its primary duty as the country’s leading tax collector.
Only 32 million, or roughly 11%, of the IRS’s record 282 million calls received during the fiscal year 2021 were answered by customer service representatives.
Congress last year gave final approval to a measure to increase funding and give the IRS additional power so that it can enforce tax collection policies more successfully.
This makes sense because every agency should be provided the right equipment to perform its duties more effectively and capably.
This new idea would also change the IRS’s job from tax preparer to tax collector to tax auditor. This strategy may seem like a fantastic idea at first because we all detest preparing and submitting taxes.
Yet after learning more about the problem, we’ve come to the conclusion that this proposal would be negative for the American taxpayer.
The IRS is mandated to use its resources and power to look into tax fraud, particularly when it involves rich people and businesses that conceal money abroad.
Nonetheless, many families with moderate to low incomes are aware firsthand that their chances are not always favorable.
According to recent research by Syracuse University’s Transactional Records Access Clearinghouse, low-income households making less than $25,000 annually were five times more likely to be audited by the IRS.