Below are comment letters submitted by the AICPA Tax Division in 2014.
November 17, 2014 - AICPA Testimony Submission-SFC Subcommittee Hearing Invitation, November 18th
Troy K. Lewis, chair of the American Institute of CPAs’ Tax Executive Committee, will testify on Tuesday, November 18, at a hearing titled, Tax Relief after a Disaster: How Individuals, Small Businesses, and Communities Recover, which will be held by the Senate Finance Subcommittee on Taxation and IRS Oversight.
November 7, 2014 - AICPA Comment Letter - Form 3115
Our EO Technical Resource Panel letter requests for IRS guidance on the procedure by which an organization, exempt from tax under Internal Revenue Code (Code) section 501(a), may change an accounting method. Specifically, we request confirmation that exempt organizations which only file a Form 990, Return of Organization Exempt from Income Tax, are exempt from the requirement to file a Form 3115, Application for Change in Accounting Method.
October 20, 2014
– AICPA Corporate Estimated Taxes Comment Letter
The AICPA recommended that the IRS issue additional guidance to provide clarity surrounding the rules in the final regulations under section 6655. We requested that the IRS further clarify the treatment of certain items in determining the taxable income for quarterly estimated taxes.
These items include, but are not limited to, capital losses, charitable contribution carryovers, R&D credits, and advance payments).
October 16, 2014 - AICPA Comment Letter on the Accumulated Aadjustment Account (AAA) of an S Corporation
The AICPA requested that the IRS issue additional guidance to eliminate an ambiguity surrounding the ordering rule in the regulations under section 1368. We recommended that the AAA balance be adjusted for all ordinary distributions without regards to the timing of redemption distributions when both distributions are made in the same tax year.
October 8, 2014 - AICPA Comment Letter on Tangible Property Regs
The AICPA requested that the IRS issue to eliminate an ambiguity surrounding the ordering rule in the regulations under section 1368. We recommended that the AAA balance be adjusted for all ordinary distributions without regards to the timing of redemption distributions when both distributions are made in the same tax year.
The AICPA sent a letter urging the IRS to provide an immediate relief for small businesses as these businesses would incur significant burdens in adopting the repair regulations.
September 25, 2014 -The AICPA Releases Position Paper on Regulation of State Tax Preparers
As regulation of tax preparers continues to be a growing issue of concern by policymakers at both the federal and state level, the AICPA’s State Regulation and Legislation Team, in coordination with the AICPA’s Tax Team, has released a new position paper on the regulation of state tax preparers.
September 24, 2014 - AICPA E-Signature/E-Authentication Comment Letter
The letter strongly supports the IRS’s efforts to develop standards allowing for electronic signature on Form 8879, which would improve the paperless processing of individual returns, however, the AICPA is concerned that the current standards to authenticate the e-signatures do not adequately address the need for confidentiality of tax payer information nor do they appropriately accommodate the needs of different taxpayer groups. The AICPA is requesting clarification that alternative methods of identity verification, with respect to e-signatures, be permissible. The AICPA also provides alternatives for the IRS to consider.
September 22, 2014 - AICPA Comments on Trusts and Estates Material Participation
AICPA submitted comments requested by the Preamble to T.D. 9644 relating to the issue of material participation by a trust or estate in a trade or business for purposes of section 469 of the Internal Revenue Code.
September 15, 2014 - AICPA Submits Extenders Letter to Congress
The AICPA sent a letter urging Congress to immediately address the fifty-seven tax provisions that expired at the end of 2013 and six provisions that expire at the end of 2014, to avoid further distortions in financial reporting, prevent unnecessary delays in the tax filing season, and end all of the needless uncertainty.
August 7, 2014 - AICPA, VISCPA, and GSCPA Submit Letter to Congress Requesting Clarity on Net Investment Income Tax Applicability to Bona Fide Residents of U.S. Territories
The AICPA, the Virgin Islands Society of Certified Public Accountants (VISCPA), and the Guam Society of Certified Public Accountants (GSCPA) submitted a letter to Congress requesting clarification regarding the section 1411 net investment income tax (NIIT) applicability to bona fide residents of the U.S. Virgin Islands, Guam, and Commonwealth of the Northern Mariana Islands (CNMI) (referred to as “U.S. Territories”). Specifically, clarification is needed as to whether or not the NIIT is a mirrored tax to be collected by the VIBIR, GDRT, and CNMIDRT. In addition, clarity on the application of NIIT to U.S. Territory estates and trusts is necessary.
July 17, 2014 - AICPA Submits Statement for the Record related to July 10 Hearing on Cash Accounting
The AICPA is submitting this cover letter and written statement for the record related to the July 10, 2014 hearing entitled, "Hearing on Cash Accounting: A Simpler Method for Small Firms?".
June 16, 2014 - AICPA Section 1411 Comment Letter
In response to the proposed regulations under section 1411, the AICPA specifically recommends the expansion of the qualification requirements of the optional simplified reporting method for taxpayers. Increasing the required threshold amounts and adjusting them for future inflation would ease the burden and allow more taxpayers to utilize the simplified method. We also recommend an election for taxpayers to treat entire chapter 1 gain or loss subject to the NIIT to further reduce the administrative burden of computing gain or loss under the complex set of rules under section 1411.
June 12, 2014 - AICPA Comments on Success-Based Fee (Rev. Proc. 2011-29)
The success-based fee letter from the Tax Methods and Periods TRP was submitted to the IRS earlier today.
The letter addresses a few issues surrounding the safe harbor allocation of success-based fees including:
June 10, 2014 - AICPA Comments on Form 990 and Instructions
- Allocation between covered and non-covered transactions – Recommending two options:
- Treat 70% of the total fee as non-facilitative and 30% as facilitative, assuming that it facilitates the covered transaction only;
- First allocate between the covered and non-covered transactions then apply the 70/30 method to the covered transaction portion.
- Milestone payments applied to payment of success-based fee – Recommend that a taxpayer apply the safe harbor allocation method to the entire fee including the milestone payment).
The American Institute of Certified Public Accountants (AICPA) provides comments on the Form 990, Return of Organization Exempt from Income Tax, and instructions. Our matrix includes comments and recommendations for the 2014 forms and instructions, while indicating the importance and urgency of each recommendation. This annual Form 990 comments matrix is a project lead by the AICPA Form 990 Task Force, with input from our Exempt Organizations Technical Resource Panel (TRP). Our group is comprised of practitioners who serve tax-exempt organizations and are experienced with both the nuances of the form and the challenges that arise for taxpayers in trying to complete it.
May 21, 2014 - AICPA Submits Voluntary Certification Letter to Commissioner Koskinen
The letter is our response to the “voluntary certification” program the IRS is proposing in the aftermath of the Loving case. The AICPA has serious concerns with the voluntary certification program proposed and feels that the IRS should focus its efforts on the current preparer tax identification number (PTIN) program along with increased taxpayer education. The voluntary certification program creates marketplace confusion and lacks an open engagement with stakeholders and the public. Furthermore the proposed program does not address the problems with unethical and fraudulent tax return preparers.
May 12, 2014 - AICPA Comments on Treatment of Shareholders of Certain Passive Foreign Investment Companies
The AICPA Passive Foreign Investment Company (PFIC) Task Force of the International Tax Technical Resource Panel drafted and submitted comments to IRS Commissioner Koskinen and various other members of Treasury, regarding on a variety of key issues related to PFICs. The letter provides ten specific recommendations to address the disparity between the treatment of direct and indirect shareholders and the related compliance costs.
May 1, 2014 - AICPA Comments on IRS/Treasury Priority Guidance Plan
On May 1, 2014, the AICPA made recommendations that the IRS and Treasury pursue tax simplification in the IRS’s 2014 - 2015 Guidance Priority List (Notice 2014-18). Treasury and the IRS annually use this list to identify and prioritize the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance.
April 29, 2014 - AICPA Testifies on Mobile Workforce State Income Tax Simplification Act of 2013
AICPA submitted a letter and Written Statement to Congress on the proposed Mobile Workforce State Income Tax Simplification Act of 2013, H.R. 1129, for the House Judiciary Committee Regulatory Reform, Commercial and Anti-Trust Law Subcommittee hearing on April 29, 2014, where AICPA testified. AICPA testified in support of H.R. 1129, which would prohibit states from taxing most non-resident employees unless the employee is present and performing employment duties in the state for more than 30 days during the calendar year. The AICPA believes H.R. 1129 provides long-overdue relief to taxpayers and their employers from the current web of inconsistent state tax and withholding rules that impact everyone who travels for work.
April 9, 2014 - AICPA Proposes Legislation to Treat Estates in the Same Manner as Married Persons Filing Separately for Income Tax and the Net Investment Income Tax
The AICPA Trust, Estate, and Gift Tax Technical Resource Panel drafted and submitted a legislative proposal to Congress on April 9, 2014, regarding treating estates and certain qualified revocable trusts and qualified disability trusts in the same manner as married persons filing separately. This proposal highlights the excessive tax burden placed on estates compared with the tax burden that the decedent had during his or her life, as well as provides a solution to these inequalities.
March 31, 2014 - AICPA Provides Recommendations to IRS on NIIT and CRTs
The AICPA Trust, Estate, and Gift Tax Technical Resource Panel drafted and submitted comments to the IRS on March 31, 2014, regarding the 2013 net investment income tax (NIIT) proposed regulations and charitable remainder trusts (CRTs).
The AICPA recommends that with respect to trusts and estates, and in particular with respect to CRTs, the forthcoming final regulations under section 1411 address the following:
March 27, 2014 - AICPA Comment Letter on Education HR 3393 AOTC
- Retain the elective simplified method (ESM) as an election for calculating the net investment income (NII) of a CRT and attributing the calculated NII to the beneficiary’s annuity or unitrust distribution.
- Provide rules on whether accumulated net investment income (ANII) of a CRT has any character, and we recommend that ANII of a CRT has no character.
- Provide examples that illustrate the ESM and its interplay with the rules of section 664(b).
- Change the reference to “information return” rather than “income tax return.”
- Provide that the ESM election is made on the tax return filed for the first taxable year beginning after the final regulations are issued.
The AICPA comment letter details our support for certain provisions in H.R. 3393 and the education proposals of the Tax Reform Act of 2014. We also respectfully submit four specific AICPA recommendations to further provide for the simplification of higher education tax incentives.
March 18, 2014 - AICPA Comments on 501(c)(4) Proposed Regs (REG-134417-13)
The AICPA submitted a comment letter on 501(c)(4) Proposed Regs (REG-134417-13) on Tuesday, March 18, 2014 to The Honorable John A. Koskinen, Commissioner, Internal Revenue Service (IRS).
In this comment letter the AICPA applauds IRS on the initiation of the notice of public rulemaking (NPRM) project, REG-134417-13, to address the present law which applies a "facts and circumstances" test to finding political activity or intervention by social welfare organizations. However, are concerned about the possibility that newly proposed regulations are ambiguous, thus causing an increase in the reporting burden and cost of compliance for exempt organizations. The AICPA supports tax legislation and overall framework that promote simplicity, fairness, and the ease of compliance. We encourage the Dept. of Treasury to devleop a new simplified framework for the deifnition of "political activity" by section 501(c)(4) exempt entities, and all other section 501(c) qualified organizations.
March 4, 2014 - Comments on Final Regulations Regarding Treasury Decision 9616: Basis Reporting by Securities Brokers and Basis Determination for Debt Instruments and Options; Reporting for Premium
During the 2013 filing season, our members and their clients experienced significant confusion from the implementation of cost basis reporting for stocks and mutual funds. We believe a further delay in reporting is necessary to reduce compliance burdens for individual taxpayers. This delay will provide additional time for third party reporting entities to change their programming and processes to comply with the regulations.
The letter proposes further extension of the effective dates in T.D. 9616 by one year each – moving the initial tracking of cost basis for options and debt instruments from January 1, 2014 to January 1, 2015, transfer reporting from January 1, 2015 to January 1, 2016 and reporting for complex debt instruments from January 1, 2017 to January 1, 2018.
February 26, 2014 - AICPA Schedule H De Minimis JV Comment Letter
The AICPA submitted a comment letter to the Commissioner of the Tax Exempt & Government Entities Division on Feb. 26, 2014 to provide recommendations for de minimis treatment of joint ventures for hospitals as reported by Schedule H, Part I, Line 7 of Form 990. Comments were related to the instructions to Form 990 when calculating the percentage that financial assistance and certain other community benefits represent as a percentage of total expenses.
February 25, 2014 - AICPA Comments on the Proposed Regulations under Section 263A Regarding Negative Additional Section 263A Costs
The AICPA submitted a comment letter to Associate Chief Counsel of the IRS, Mr. Andrew Keyso, on Tuesday, Feb. 25, 2014 on the Proposed Regulations under Section 263A Regarding Negative Additional Section 263A Costs. The AICPA provided comments on topics for Allowing Negative Amounts under the SPM, Exception for Small Taxpayers, Allow Taxpayers to Use the Proposed MSPM and to Estimate the Raw Material Content of WIP and Finished Goods, Revise the Proposed MSPM to Add a Post-Production Absorption Ratio, Rules for Property Produced Under Contract for the Taxpayer and Property Purchased for Resale by the Taxpayer, Allow Any Reasonable Method to Allocate Capitalizable Mixed Service Costs, MSPM for LIFO Inventory, and Extension of the Qualifying Period Under the MSPM with a HAR Election, HAR Transition Rules.
January 16, 2014 - AICPA Comments on SFC Chairman's Staff Discussion Draft on Tax Administration
The AICPA submitted a comment letter to Chairman Baucus and the Senate Committee on Finance on Thursday, Jan. 16, 2014 on the Tax Reform Discussion Draft on Tax Administration. The AICPA provided comments on topics for Reforms Relating to Information Returns, Reforms Relating to Identify Theft and Tax Fraud, Closing the Tax Gap, Expansion of Electronic Filing, Improvement to Tax Filing, and provided additional comments.