IRS offers tax relief to corporations
The Internal Revenue Service is waiving penalties to companies that fail to pay their estimated taxes for the first quarter for the corporate alternative minimum tax.
In Notice 2024-33, the IRS said Monday the relief notice applies only for calculating the installment of estimated income tax of a corporate taxpayer that’s due on or before April 15, 2024, or for companies whose tax year starts in February, until May 15, 2024.
The notice waives any tax penalties under Section 6655 of the Tax Code to the extent the amount of any underpayment can be attributed to the portion of the corporate alternative minimum tax liability due in that installment.
Last June, the Treasury Department and the IRS issued a notice that waived CAMT tax penalties for any tax year that starts after Dec. 31, 2022, and before Jan. 1, 2024. But that time has since passed, so a new notice was needed until final regulations are issued. Last year, the Treasury Department and the IRS announced they intended to issue forthcoming proposed regulations addressing the application of the CAMT. They provided interim guidance to clarify the application of certain aspects of the CAMT. Affected taxpayers need to file Form 2220 with their federal income tax return, even if they owe no estimated tax penalty, to avoid a penalty notice.
The instructions to Form 2220, “Underpayment of Estimated Tax by Corporations,” will be modified to provide specific instructions on how to avoid a penalty notice and to clarify that no addition to tax will be imposed under Section 6655 based on a corporation’s failure to make an estimated tax payment of its CAMT liability for the installment of estimated tax that is due on or before April 15, 2024, or on or before May 15, 2024 (in the case of a fiscal year taxpayer with a taxable year beginning in February 2024), and that a company can exclude those amounts when calculating the amount of its required annual payment on Form 2220.
