The American Institute of CPAs (AICPA) recently submitted suggestions to the Senate Finance Committee Working Group on Individual Income Tax that would simplify some areas of the tax code that individual taxpayers find the most difficult to understand and recommended provisions to combat identity theft and tax fraud.
Troy Lewis, CPA, CGMA, chair of the AICPA Tax Executive Committee, wrote in the March 17 letter, “We understand the challenges that Congress faces as it tackles the complex issues inherent in drafting tax legislation, and note that both taxpayers and tax practitioners are interested in, and need, tax simplification. Compliance burdens for individual taxpayers are too heavy, both in terms of time required and out-of-pocket cost.”
The AICPA concentrated its suggestions in five key areas:
- Identity theft and tax fraud;
- Simplified income tax rate structure;
- Education incentives;
- Relief for missed elections (section 9100 relief), and
- “Kiddie Tax” rules.
The Senate Finance Committee in January formed bipartisan tax reform working groups in five specific areas to analyze the current tax law, examine policy trade-offs and the available reform options in each area, the Committee stated in its press release. The five areas are: 1) individual income tax; 2) business income tax; 3) savings and investment; 4) international tax, and 5) community development and infrastructure. The Committee announced on March 11 that it was soliciting comments from interested individuals, businesses, organizations and advocacy groups. The AICPA plans to submit recommendations to some of the other tax reform working groups before the April 15 comment deadline.