2018 was a busy year for the AICPA’s Advocacy team. We were invited to testify before key congressional committees, provided written testimony to legislators and regulators and submitted over 60 comment letters to federal agencies and accounting standard-setters, including the Department of the Treasury, the Internal Revenue Service (IRS) and the Financial Accounting Standards Board. We also supported state CPA society activities in their legislatures.
Our efforts produced results. Here are just some of them:
Guidance on meals and entertainment deductions
Tax reform left CPAs with a lot of questions. In April, we asked the U.S. Treasury Department and the IRS for guidance on changes to the Internal Revenue Code related to the disallowance of entertainment, amusement, recreation and qualified transportation fringe expenses and offered several recommendations. In October, the IRS clarified that business meals generally will continue to be 50 percent deductible — as we recommended.
This year was a big year for CPA mobility. The AICPA supported state CPA society efforts in several states to adopt full CPA firm mobility, which allows CPA firms to offer attest services across state lines without having to register in each state. This year, state legislatures in Kentucky, Michigan and New Hampshire adopted firm mobility. Half the country now allows CPA firms to practice across state lines, reducing regulatory barriers and improving clients’ access to specialized services. Additionally, state legislatures in Connecticut and Michigan passed legislation that provides for CPE reciprocity, further enhancing CPAs' ability to work across state lines. Thirty-two U.S. jurisdictions currently allow for CPE reciprocity for CPAs with licenses in multiple states.
Occupational licensing reform
In June, the U.S. House of Representatives’ Subcommittee on Higher Education and Workforce Development held a hearing to discuss whether occupational licensing reduces barriers to economic mobility and growth. We, along with the National Association of State Boards of Accountancy, signed a statement with professional associations and licensing boards representing engineers, several medical professions, landscape architects, social workers and veterinarians. The statement explained that state governments “use occupational licensure to ensure the quality, safety, and integrity of the knowledge-based professions.”
We also wrote our own letter to the Committee, speaking specifically to the purpose of the CPA license. As we put in the letter, “the CPA license is highly respected and trusted, as CPAs provided accounting services that are essential to the nation’s economy.”
On the international side, the Association of International Certified Professional Accountants issued a policy paper calling for greater global coordination in the taxation of the digital economy. As the paper states, “[i]nternational tax issues and tax policies are most effective and efficient when tax systems operate within an internationally agreed upon platform and approach.” The paper examines the issues through the lens of the Association’s Guiding Principles of Good Tax Policy and identifies issues and concerns with various proposals based on the concepts in the guiding principles. We are distributing the paper globally to policymakers and multinational organizations.