Fact Sheet on Corporate Alternative Minimum Tax CRA Resolution
Washington, D.C. — In November Senate Finance Committee Ranking Member Ron Wyden, D-Ore., filed a resolution to overturn recent Treasury guidance that granted a massive new tax break to highly profitable corporations and private equity giants. A vote on the resolution is expected on Tuesday. Additional details on the Treasury Department’s action are below. According to the Joint Committee on Taxation, this new Trump handout to corporations and private equity firms cost $10.3 billion.
Background on the resolution and Trump’s latest tax break for corporations and private equity:
For decades, giant corporations have played financial shell games to skip out on paying a fair share in taxes. They tell their shareholders they’re raking in billions of dollars in profit, but to winnow down their tax bills they fudge the math and tell the IRS they earned little or nothing. Democrats cracked down on this scam in the Inflation Reduction Act by creating the Corporate Alternative Minimum Tax, which says that corporations that made at least $1 billion in profits must pay a 15 percent minimum tax, roughly the same tax rate paid by middle-income families.
The Trump administration opposes any effort to ensure corporations pay what they owe, so the Treasury Department is gutting the Corporate Alternative Minimum Tax and unilaterally handing the biggest and most profitable private equity firms and corporations in America a new tax break that the Joint Committee on Taxation confirmed will exceed $10 billion.
This tax break is hidden inside new guidance, IRS Notice 2025-28. The notice makes changes to the rules governing how corporate giants and private equity firms can count income coming from partnerships they own, essentially giving those corporations a “choose-your-own-tax-rate” adventure.
Under the new system, a multi-billion-dollar corporation or PE firm can now choose one of six different ways to count how much money it made in a partnership. It can make a different choice for each of the dozens or hundreds of partnerships it owns to maximize their tax break. This notice adds complexity to the tax code and encourages the abuse of partnerships that exist solely for tax-dodging gamesmanship, not for any constructive business purpose. The big winners are inevitably wealthy shareholders and corporate executives.
This comes at a time when families all over the country are feeling battered by inflation, and only months after Trump and Republicans gave corporations nearly $1 trillion in new tax breaks in their massive reconciliation bill. Trump’s Treasury Department may be inclined to give big corporations and private equity firms anything and everything they ask for, but Congress must not accept this unjustifiable, $10.3 billion giveaway.
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