Members and staff of the American Institute of CPAs (AICPA) met on July 9, 2013 with Congressional staff to discuss AICPA suggestions that would improve administration of the tax code and simplify tax laws for taxpayers and tax preparers, as Congress prepares to write tax reform legislation.
Attending the meeting were Jeffrey A. Porter, chair of the AICPA Tax Executive Committee, Anita Soucy, member of the Tax Executive Committee, Don Longano, chair of the AICPA Tax Reform Task Force, Mel Schwarz, member of the Tax Reform Task Force, Kathy K. Petronchak, chair of the AICPA IRS Practice & Procedures Committee, and Edward S. Karl, vice president of taxation for the AICPA.
The discussion on July 9 was a continuation of AICPA efforts begun more than 18 months ago to educate lawmakers and their staff about areas of the tax code that cause the most trouble for taxpayers, tax preparers and Internal Revenue Service personnel. Among the AICPA’s activities were the letters submitted in April to five House Ways and Means Committee tax reform working groups that zeroed in on the need to harmonize and simplify education tax incentives and to consolidate and simplify the multiple types of tax-favored retirement plans and the rules governing them. The AICPA also pressed Congress in April to overhaul the civil tax penalty rules.
Small Business in the Spotlight
Small business taxation is shaping up as a major issue in the Congressional tax reform discussions. The AICPA weighed in recently with recommendations to the House Ways and Means Committee's Select Revenue Subcommittee, which held a hearing on the committee chairman’s small business tax reform discussion draft.
In its written statement for the May 15, 2013 hearing record, the AICPA supported permitting the cash method of accounting for more small businesses. Currently, businesses with gross receipts of $10 million or less are allowed to use this method – under discussion is a rule to restrict its use to those with $5 million or less in gross receipts. However, the AICPA strongly opposed proposed limitations on use of the cash method of accounting for certain farmers, personal service corporations, and professional service partnerships. We believe these entities should continue to have the option of using the cash method without any gross receipts limitations.
For more information about the AICPA’s tax reform efforts, visit the AICPA Tax Reform Center.