Small Corporations are Missing AMT Exemption

The Treasury Department found over 2,000 firms paying the Alternative Minimum Tax (AMT), even though they appeared to qualify for an exemption under the Taxpayer Relief Act of 1997.

Generally, under Internal Revenue Code Section 55(e), a corporation initially qualifies for exemption if its average gross receipts were $5 million or less for the first 3 taxable years beginning after December 31, 1993. It continues to qualify for the exemption as long as the average gross receipts for the prior 3-year period do not exceed $7.5 million.

If you firm was eligible and paid the AMT, you must apply for a refund with an amended return. The IRS does not notify overpayers.

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