AICPA Sends Congress Legislative Proposals Promoting Tax Simplicity and Fairness

February 27, 2014

The American Institute of CPAs has sent a compendium of legislative proposals to the House Ways and Means and Senate Finance Committees that would simplify or make technical corrections to the nation’s tax laws.

The AICPA stated in its February 19, 2014 letter to Congress that the focus of the proposals is on provisions in the Internal Revenue Code that “are not unduly controversial” and “are technical in nature.”

The 32 proposals promote simplicity and fairness, the AICPA said, and would improve tax administration.  Seven of the proposals are new.  They are, by category:

Individual Income Tax: 
    • Simplify the tax treatment of Roth IRA Contributions

S Corporations: 
    • Repeal section 1372, which would simplify the compliance burden of small business taxpayers related to employee fringe benefits

Corporations and Shareholders:
    • Provide small business relief by creating a de minimis threshold for applying the section 382 loss limitation rules

Tax Methods & Periods:
    • Modify the enhanced deduction rules for charitable contributions of inventory
    • Repeal the anti-churning rules of section 197(f)(9)
    • Modify the definition of W-2 wages for purposes of section 199
    • Modify the rules for capitalization and inclusion in inventory costs for certain expenses under section 263A

Overall, the proposals cover tax issues affecting individuals, businesses, trusts and estates, and exempt organizations.