On January 8, 2026, Treasury and the IRS issued Notice 2026-7 providing interim guidance on the Corporate Alternative Minimum Tax (CAMT). ¹ The notice addresses several open questions about how Applicable Financial Statement Income (AFSI) is computed, including the treatment of certain reporting-tax mismatches that have been creating false positives in the $1 billion AFSI screening test.
Most public commentary on CAMT focuses on the largest filers. For our practice, the more interesting question is the population of mid-market private companies that occasionally clear the AFSI threshold due to a one-time event: a sale of a subsidiary, an insurance settlement, an asset disposition. Notice 2026-7 reshapes that screening test in three useful ways.
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