Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Internal Revenue Service relating to Interim Guidance Simplifying Application of the Corporate Alternative Minimum Tax to Partnerships.
Summary
This document is a joint resolution passed by the Senate and House of Representatives to disapprove an IRS rule (IRS Notice 2025-28) concerning interim guidance simplifying the application of the Corporate Alternative Minimum Tax (CAMT) to partnerships. The resolution utilizes the Congressional Review Act (CRA), allowing Congress to overturn agency regulations. The rule in question provides interim guidance on how the CAMT, a tax on large corporations, should be applied to partnerships.
Expected Effects
If enacted, the resolution would nullify the IRS's interim guidance on applying the CAMT to partnerships. This would mean the IRS would need to either develop new guidance or revert to previous methods. The practical effect would be to change how the CAMT is calculated and applied for partnerships, potentially impacting their tax liabilities.
Potential Benefits
- Potentially simplifies tax compliance for partnerships by preventing the implementation of complex or unclear interim guidance.
- May lead to a more transparent and predictable tax environment if Congress believes the IRS guidance is flawed.
- Could result in a more favorable tax outcome for some partnerships if the disapproved guidance was deemed overly burdensome.
- Reinforces congressional oversight of executive branch agencies and their regulatory actions.
- May encourage the IRS to develop clearer and more equitable guidance in the future.
Potential Disadvantages
- Creates uncertainty for partnerships that may have already been planning based on the IRS interim guidance.
- Could complicate tax planning if the IRS is forced to revert to older, potentially less efficient methods.
- May lead to increased litigation if the application of the CAMT to partnerships becomes unclear.
- Potentially disrupts the IRS's efforts to implement the CAMT effectively.
- Could be perceived as political interference in tax administration.
Constitutional Alignment
This resolution aligns with the principle of legislative oversight of the executive branch, as outlined in Article I, Section 1 of the Constitution, which vests all legislative powers in Congress. The Congressional Review Act, under which this resolution is being considered, is a mechanism for Congress to check the power of administrative agencies. The resolution itself does not appear to infringe upon any specific constitutional rights or protections.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).