Inside look at the Inflation Reduction Act

President Biden signed the Inflation Reduction Act, H.R. 5376, into law on Aug. 16, 2022. Tax professionals must now undertake the task of quickly understanding the tax provisions, including the new corporate minimum tax, based on financial statement, or "book," income and various energy credits, which include several new credits for clean energy and fuels and clean vehicles and other transportation. The bill also extends several temporary existing credits.

On this Tax Section Odyssey episode, April Walker, CPA, CGMA, Lead Manager — AICPA Tax Section, and Kasey Pittman, CPA, Senior Manager, Washington National Tax — Baker Tilly US, dissect the tax stipulations in the new tax and climate legislation.

What you’ll learn in this episode

• What’s in the Inflation Reduction Act, H.R. 5376 (1.35)
• 15% minimum tax for large corporations (5.07)
• 1% excise tax on corporate stock buybacks (11.12)
• Extension of the Sec. 461(l) business loss limitation (13.24)
• Clean energy measures (17.22)
• IRS funding provisions (24.14)
• A page from Kasey’s travel journal (28.33)

 AICPA resources

• AICPA comments on tax provisions in Senate reconciliation legislation released on July 27, 2022 — On Aug. 4, 2022, the AICPA submitted comments regarding important profession and tax policy issues that are in the Senate reconciliation legislation released on July 27, 2022.
• AICPA comments on the corporate profits minimum tax in reconciliation legislation being considered — On June 21, 2022, the AICPA recommended that Congress reconsider and clarify the rules associated with the proposal regarding implementing a minimum tax on corporate adjusted financial statement income due to complexity and because it may have many significant and potentially negative implications. The AICPA previously submitted a letter on Oct. 28, 2021.
• AICPA request for additional guidance and relief regarding Sec. 461(l) – limitations on excess business losses of noncorporate taxpayers — On June 22, 2020, the AICPA submitted a comment letter requesting for additional guidance and relief regarding Sec. 461(l). The recommendations address treatment of previously reported excess business losses and relief for underpayment of estimated taxes.

Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices.

This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you’re not already a member, consider joining this prestigious community of your tax peers. You’ll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.