When it comes to advocacy related to tax reform, the AICPA is guided by two approaches: what’s in the public interest and what’s best for our members, according to Vice President for Taxation Edward S. Karl, CPA, CGMA.
In a recent video, Karl offered the following examples of public interest issues for which the Institute has advocated: the elimination of the AMT, the unification of education incentives, the simplification of retirement rules and the enhanced treatment of the disaster rules.
Issues that directly touch members include sustaining the continued use of the cash method of accounting, supporting the recognition that if there is a rate reduction for corporations, a rate reduction for pass-through entities is also important, adding to the discussion regarding “reasonable compensation” and getting behind the continued deduction of interest expense for businesses.
Acknowledging that the political environment changes almost daily, Karl offered his sense of tax reform timing in a new AICPA Insights blog post. “Affordable Care Act (ACA) repeal and replacement has been the first order of business,” he stated. “House Speaker Paul Ryan has indicated that he’d like to see a tax reform bill released publically by the end of April or early May and pass the House before Congress takes its traditional August recess. A separate Senate process will take time and likely involve budget reconciliation. The possible result is the bill could be passed earlier but it just couldn’t go into effect until the government’s next fiscal year, which begins October 1, 2017.”
Despite the extreme level of partisanship in Washington, there is still bipartisan interest in tax reform. “Notwithstanding that interest, crossing the finish line to signed legislation will not be easy due to several challenges,” Karl wrote. These include creating a revenue-neutral bill, ACA repeal/replacement overlapping tax reform, the use of regular order or budget reconciliation in the Senate and possible Senate resistance to a House bill.
To see Karl’s videos and to stay current on the latest tax reform developments of interest to tax practitioners, visit the AICPA’s Tax Reform Resource Center.