AICPA Adds Grassroots Push to Retain Cash Basis Method for Tax Purposes

October 17, 2013

The American Institute of CPAs (AICPA) is working with state CPA societies, member CPA firms, and CPAs who are AICPA Key Persons to inform members of Congress about the negative consequences a proposal included in a House Ways and Means Committee tax reform discussion draft would have on CPAs and other businesses. 

The AICPA continues to oppose a proposal included in the House Ways and Means Committee’s small business tax reform discussion draft that would require CPA firms and others to change from the cash basis method to the accrual method for tax purposes.  The provision would create a hardship for the partners of CPA firms and owners of other entities involved in the professional services sector, such as actuaries, architects, consultants, engineers, doctors and lawyers.  It would force business owners operating in any form of organization other than sole proprietorships to pay tax in advance of collecting cash payment from their clients and customers if average gross receipts of the business exceed $10 million.  The AICPA believes that it is unfair because it essentially treats these individuals differently than other individual taxpayers.
Fifty state CPA societies sent letters to more than 400 members of Congress.  Additionally, more than 150 members of Congress received letters from CPA firms that would be directly impacted by the proposal. 

As reported in The CPA Advocate on September 5, 2013, the AICPA provided comments to the Ways and Means Committee in March through written testimony.  In August, the Institute sent a letter further explaining its concerns about the proposal.