The corporate alternative minimum tax, which was created to ensure that even the craftiest company feels an annual tax bite, has lost most of its teeth.

The Republican-led Congress, with the Bush administration's blessing, is likely to try next year to repeal the tax, over the fierce objections of congressional Democrats.

But a series of legislative changes and favorable Internal Revenue Service rulings may have already done the bulk of the job. An analysis of IRS data shows that the corporate tax has brought less money into the Treasury virtually every year since 1990. From a peak of $11.2 billion that year, adjusted for inflation, revenue from the tax had fallen to $3.3 billion in 1999, the last year for which data are available. A Treasury official said the trend has almost certainly continued.

"There isn't a lot of point to it anymore," said a House Democratic tax aide who joked that the brewing partisan fight resembles two bull elks bashing their heads together over females that long since departed.

Administration officials still believe the tax should be repealed, if only because it represents a significant burden on corporate accountants, if not the corporations themselves. One Treasury expert said the tax may still discourage corporations from investing in new equipment and expanding their payrolls.

Last year, the bipartisan Joint Committee on Taxation recommended it be abolished simply because the revenue it brings in is not worth the compliance trouble it has created.

Many advocates and opponents of the tax agree it is no longer doing its job: making profitable companies pay significant amounts of income tax.

"It literally applies to maybe one in 10 firms now," said George A. Plesko, an economist at the Massachusetts Institute of Technology.

The corporate alternative minimum tax (AMT) was created as part of the broad Tax Reform Act of 1986, at a time when anger was rising over profitable companies that were escaping taxation. Household names such as General Electric Co., Lockheed Corp., Dow Chemical Co. and Boeing Co., were reaping profits but paying no taxes. That struck a political nerve.

The AMT established a tax system that ran parallel to the regular corporate income tax. Companies would have to compute their taxes each year according to both sets of rules and pay the higher of the two bottom lines.

But from the beginning, the tax was less dramatic than its billing. The AMT was not designed to raise a company's tax burden; rather, it was supposed to make the company pay more taxes upfront and less later on. Any additional tax liability imposed by the AMT could be deducted from regular taxes in future years, and that deduction could be carried forward indefinitely.

The biggest fight in the coming AMT battle will be over whether to rebate billions to companies that have outstanding AMT credits. IBM alone could get $1.4 billion, according to the Congressional Research Service. General Motors Corp. has credits worth $833 million; General Electric, $671 million. Even Enron Corp. would be in line to collect a $254 million rebate.

Republicans want to rebate that money in one lump sum. To not do so would be to change the rules the companies were told to live by.

Democrats say no rebate, no way.

The fight over the rebates has obscured the larger point that the law itself is no longer working. A series of changes to the tax -- approved with little notice outside corporate tax circles -- has taken most of the sting out of the AMT. When it was first approved, the tax was fairly straightforward. A company had to calculate the difference between the profit it showed shareholders -- its book income -- and the taxable profit it showed the IRS, then pay 50 percent of the difference to the government.

In 1990, though, the AMT shifted to a far more complicated -- and less costly -- system, which imposed a 20 percent tax on corporate profit, rather than the 34 percent rate in the regular tax system. But under the AMT, tax deductions normally allowed would be shaved back or disallowed. Most important, the tax write-off that businesses could take for investments -- the "depreciation allowance" -- would have to be claimed as deductions over a much longer period of time.

For example, a piece of equipment with an expected life span of 20 years can be deducted from regular corporate taxes over 10 years, with much of that write-off in the early years. Under the AMT, the equipment would be written off much more slowly, over 20 years.

In 1993, President Bill Clinton's budget package, generally remembered for its tax increases, took the next chip out of the AMT, allowing companies to front-load their investment deductions even under the AMT.

In 1997, the balanced-budget agreement between Republican congressional leaders and Clinton shortened the duration that businesses could deduct investments to the same schedule as for the regular corporate income tax.

Since about 80 percent of the AMT's revenue has historically come from stricter depreciation rules, the 1993 and 1997 changes had a dramatic impact on the AMT's usefulness, said Robert S. McIntyre of Citizens for Tax Justice, a research group backed by organized labor that lobbied to create the tax. Manufacturing companies with large depreciation deductions and firms with large interest deductions, such a leasing companies, were some of the biggest targets of the AMT, he said. Now they are largely exempt from it.

"Now, it's not much different from the regular system," McIntyre lamented.

What's more, in the last days of the Clinton administration, the IRS issued a terse revenue ruling, clarifying that stock options exercised by employees could be deducted from the AMT as regular compensation. Most analysts say the ruling made sense, since the tax code views most stock options as deductible compensation. But for high-tech companies that issue large amounts of stock options, the ruling was another big blow to the AMT's viability.

A Treasury official said the tax still has negative consequences for the economy. Companies may be cutting back on investments or new hiring out of fear that claiming those as deductions would force them to pay the AMT.

And the cost to corporate accounting divisions is inescapable. A University of Michigan survey of large corporations concluded that companies subject to the AMT wind up paying 12 percent to 17.7 percent more in "compliance costs" than companies that escape it. With average accounting costs equaling $2 million a company, the AMT is trimming revenue by $240,000 to $354,000, said Joel B. Slemrod, an economist at the university's business school.

"This is a lot of complexity for not that much revenue," Slemrod said.

By contrast, the alternative minimum tax for individuals, which works much differently but shares a similar goal in that it's supposed to force the wealthy to pay substantial tax, is also not panning out as planned. It's bringing in much more revenue than its framers expected and affects far more people than originally intended. Some in Congress also want to fix those problems, but that's separate from the corporate AMT battle. The core of the congressional corporate AMT fight is likely to boil down to the same populist battle that created the tax in the first place: Should large corporations be able to book billions in profit and pay no tax? And if the AMT does get repealed, Democrats are likely to publicize the notion that companies will get windfalls.

Without rebating the money companies have already forked over under the AMT, its repeal would actually bring in more revenue in the short run, since tax forecasters are counting on corporations taking their AMT credits. A Joint Committee on Taxation analysis of last year's House legislation repealing the AMT estimated that repeal would bring an additional $3 billion to the Treasury over the next four years.

"It will never happen," one senior tax aide on Capitol Hill said of a compromise AMT repeal that did not involve upfront refunds. "Republicans won't go for it because it would raise revenue, and Democrats won't go for it because [the corporate AMT] is still a populist club to beat up the Republicans with."