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Home Advocacy Federal Issues Tax Legislation and Policy

Federal Issues

Tax Legislation and Policy 

The Congressional and Political Affairs Team often assists the Tax Team with tax legislation and policy issues, and advocates about them to Members of Congress and other key policymakers on behalf of the profession.  Below are several significant current tax issues in which the AICPA is involved.  A complete list of all issues the AICPA is following can be found on the Tax Advocacy webpage.

Tax Return Due Dates

The AICPA has long been concerned about the difficulties taxpayers face when receiving delayed Schedules K-1, which are informational documents sent to owners and beneficiaries of partnerships, S-corporations and trusts. Because many of these owners and beneficiaries have due dates similar to Schedules K-1, it often is impossible for those taxpayers to file complete and timely tax returns. Rather, they are forced to file for extensions on their own tax returns.
 
To solve this problem, the AICPA supports requiring Schedules K-1 to be filed in advance of the owners’ and beneficiaries’ return due date.  In the 112th Congress, Senator Mike Enzi (R-WY) introduced S. 845, the Tax Return Due Date Simplification and Modernization Act of 2011, a bill that generally incorporates our proposal.  Also in the 112th Congress, Congresswoman Lynn Jenkins (R-KS) introduced H.R. 2382, a bill that generally incorporates our proposal and is similar to Senator Enzi’s bill.  Both Senator Enzi and Congresswoman Jenkins are planning to reintroduce the bills in the 113th Congress.


Proposed Preparer Regulations

IRS Commissioner Shulman announced that the IRS would phase in a process to regulate all paid tax return preparers for the 2011 filing season. The proposal will mandate that all paid tax return preparers both register with the IRS and obtain a Preparers Tax Identification Number (PTIN), to be used in signing all tax returns and that all paid preparers be subject to Circular 230. Paid tax return preparers will be subject to an annual CPE requirement as well as an entry competency test. CPA’s are generally exempt from the latter two requirements as they have already passed a licensing examination and are subject to annual continuing professional education requirements. 

Non-signing preparers who are employed by CPA firms will have to register and receive a PTIN, but will not have to take the exam or meet the IRS’s continuing education requirements.    The IRS’ proposal to require fingerprinting (CPAs would be exempt) as part of a suitability check continues to be on hold while the IRS considers alternatives. The AICPA is pleased that the IRS has modified its regulations from those initially proposed and continues to work with the Service to address issues in the regulations that may adversely affect its members.

On January 18, 2013, the U.S. District Court for the District of Columbia held that the IRS lacked the statutory authority  to promulgate the PTIN rules that require tax preparers to pass an exam and take continuing education courses.  The court held that requiring tax preparers to register and receive a PTIN is acceptable.  The IRS has announced that it intends to appeal the decision.


Estate Tax

Effective January 1, 2010, Congress allowed the Federal Estate and Generation Skipping Tax to expire. Simultaneously the rules on step-up in basis expired and a rule requiring carryover basis for estates. However, effective January 1, 2011, the Federal Estate Tax and Generation Skipping Tax will be automatically reinstated but at their mandated rates and exemption levels as they existed in tax year 2000. The AICPA supports reinstating the Federal Estate Tax at the rates and exemption levels that were in place in 2009 until a permanent solution is found.

During the lame duck session of Congress in December 2010, a 2-year extension of the estate and gift tax was enacted.  The estate tax has a $5 million exemption and a 35% rate.


Expiring Tax Provisions

Congress allowed many temporary tax provisions to expire at the end of 2009 without taking action. This list of expiring provisions includes several business and individual tax issues that are of significant concern to AICPA members and their clients as the impact of these expiring provisions will be that tax liabilities may be significantly changed. The AICPA supports Congressional action to reinstate specific issues on this list.  They were extended for two years during Congress' December 2010 post-election session.  A similar situation is expected to occur in 2012.


Required Disclosure of Uncertain Tax Positions

The IRS has continued forward on the required disclosure of uncertain tax positions, with modifications from its original proposal in January 2010.  For tax filings beginning with 2010, disclosure of uncertain tax positions will be required by companies that have audited financial statements prepared under U.S. GAAP, IFRS, or other accounting standards, where the financial statements include a reserve for any uncertain tax positions, as well as for tax positions where a reserve has not been recorded due to an expectation to litigate.  In addition, for 2010 the company must have total assets exceeding $100 million, and file Form 1120, Form 1120 L, Form 1120 PC or Form 1120 F.  The IRS is phasing-in the disclosure such that by 2014 it will apply to companies with total assets exceeding $10 million. The AICPA submitted written comments to the IRS on June 1, 2010 and on December 2, 2010 regarding various aspects of the IRS proposal.  The AICPA continues to discuss with the IRS its concerns with the rule.


Resources

Copy of Legislation

A copy of all noted bills and laws are available on the Library of Congress's THOMAS website.

Staff Contact

Peter M. Kravitz
Director, Congressional and Political Affairs
202-434-9218
pkravitz@aicpa.org 

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Audits of FHA-Approved Participants and Related HUD Requirements

Article:  FHA proposes new rule to strengthen risk management and shift accountability for the underwriting of FHA-insured loans to the mortgage banks. It may no longer require FHA to approve loan correspondents (mortgage brokers) participating in the FHA program and HUD would no longer require FHA to submit audited financial statements or audits
Published on May 14, 2013

Municipal Advisors

Article:  The AICPA generally supports the SEC’s proposed rules as a means to strengthen investor protections in the municipal securities market.  The AICPA is concerned, however, because the proposed rule would require that accountants performing customary and usual accounting services would be required to register as municipal advisors.
Published on May 01, 2013

Congressional and Political Affairs Advocacy

Overview:  The AICPA monitors and advocates on legislative and other matters that affect the accounting profession. Working with state CPA societies and other professional organizations, the AICPA provides information to and educates federal, state and local policymakers regarding key issues.
Published on May 01, 2013

Convergence of International and US Accounting Principles and IFRS

Article:  International Financial Reporting Standards (IFRS) set by the International Accounting Standards Board (IASB) in London is a response to worldwide demand from regulators, investors, businesses, and auditing firms for a single set of high-quality, globally-accepted accounting standards.
Published on April 03, 2013

Tax Legislation and Policy

Article:  The Congressional and Political Affairs Team often assists the Tax Team with tax legislation and policy issues, and advocates about them to Members of Congress and other key policymakers on behalf of the profession.
Published on April 03, 2013

Section 404(b) of Sarbanes-Oxley Act of 2002

Article:  The Sarbanes Oxley Act requires that the management of public companies assess the effectiveness of the internal control of issuers for financial reporting.  Section 404(b) requires a publicly-held company’s auditor to attest to, and report on, management’s assessment of its internal controls. AICPA believes that all investors in public companies
Published on April 03, 2013

GAO Study of Financial Planning

Federal Law:  Dodd-Frank required the GAO to conduct a study on the effectiveness of existing regulation of financial planners, including tax advisors.  The AICPA met with the GAO during the study to present the profession’s point of view.  AICPA strongly opposed any new regulatory structure affecting CPAs as they are already comprehensively
Published on April 03, 2013

Financial Literacy and Education

Article:  Learn about the AICPA's award winning financial literacy programs.
Published on April 03, 2013

FASB Independence and Fair Value Accounting

Article:  The AICPA strongly and unequivocally supports independence of the U.S. and international accounting standard setting bodies, the Financial Accounting Standards Board (FASB) in Norwalk, Connecticut, and the International Accounting Standards Board (IASB) in London.
Published on April 03, 2013

Extraterritorial Private Rights of Action, also known as F-Cubed Litigation

Article:  The accounting profession believes private litigants may utilize U.S. securities laws within the territorial jurisdiction of the U.S. and that the United States Supreme Court decision in Morrison v. National Australia Bank, Ltd. is the correct reading of the Securities Exchange Act of 1934.
Published on April 03, 2013

ERISA Fiduciary Definition - Appraisers of Employee Stock Ownership Plans

Article:  The AICPA believes that CPAs who perform valuation services for employee stock ownership plans (ESOPs) should not be defined as fiduciaries under the Employee Retirement Income Security Act (ERISA). Rather, the AICPA believes that the U.S. Department of Labor (DOL) should implement rules that would require appraisers of ESOPs to
Published on April 03, 2013

Consumer Financial Protection Bureau

Article:  This article outlines the AICPA's involvement with the development of the Consumer Financial Protection Bureau (CFPB). The AICPA was successful in winning recognition by House and Senate lawmakers of the vital role CPAs play in advising Americans on their financial decisions, thus preventing CPAs from reporting to a new regulatory body.
Published on April 03, 2013

Federal Legislative and Regulatory Issues

Federal Law:  This page highlights the advocacy issues in which the Congressional & Political Affairs Team is advocating on behalf of the profession, and also those issues that the team has recently followed.
Published on March 29, 2013

Tax Legislation and Policy - Recent Issues

Overview:  See current tax issues and legistlation that the AICPA recently followed. The Congressional and Political Affairs Team often assists the Tax Team with tax legislation and policy issues, and advocates about them to Members of Congress and other key policymakers on behalf of the profession.
Published on March 28, 2013

Audits of Federal Funds (Single Audits)

Article:  Entities that receive federal funds including states, local governments, and not-for-profit organizations (NPOs), are subject to audit requirements commonly referred to as “single audits” under the Single Audit Act of 1984, as amended in 1996.  The Single Audit Act was enacted to standardize the requirements for auditing federal programs. 
Published on March 28, 2013

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