AICPA Commends Lawmakers for Efforts to Reform Outdated Tax Code

Highlights Key Issues for Consideration in House and Senate Versions of Bill

November 14, 2017

Washington (November 14, 1017) – In a letter to leaders of the U.S. House of Representatives and Ways and Means Committee, and in a separate letter to the chairman and ranking member of the Senate Finance Committee, the American Institute of CPAs (AICPA) commended the tax reform efforts by the two committees and highlighted for consideration key issues in the different versions of the House and Senate tax reform bills.

In both letters, AICPA Tax Executive Committee Chair Annette Nellen, CPA, CGMA, Esq. applauded efforts to reform “our nation’s outdated Internal Revenue Code.”

In the November 13 Senate letter, Nellen wrote, “We recognize the intent of the tax reform bill, the Tax Cuts and Jobs Act (hereinafter referred to as “the Proposal”), is to move us closer to a fairer, simpler Tax Code that drives economic opportunities for individuals and families, while leveling the playing field for American businesses in the United States (U.S.) and abroad.  For example, we commend the preservation of the deduction for business interest expense for small businesses, repeal of the alternative minimum tax (AMT), expansion of the exception for small taxpayers from the uniform capitalization rules under section 263A, and simplification of the ‘kiddie tax.’  These provisions would eliminate a significant amount of compliance burdens for small businesses and help reduce the complexity and unfairness of the current Tax Code.”

In the Senate letter and in the November 10 letter to the House, Nellen stated that the AICPA looks forward to “working with Congress as this process moves forward to ensure that the proposed reforms are fair and meet the needs of both taxpayers and tax practitioners.”  In that regard, she highlighted some of the key issue areas that are important to the accounting profession.  Among them are:

  • Cash method of accounting
  • Tax rates for pass-through entities
  • Deduction for state and local taxes
  • Nonqualified deferred compensation
  • International tax provisions

Nellen emphasized the importance of transitional relief in both letters.  “As Congress moves forward with tax reform, we urge you to consider appropriate transitional provisions.  For example, we recommend providing penalty relief for estimated payments due prior to the later of June 30, 2018, or 120 days after the effective date of the legislation.  Taxpayers and preparers need sufficient time to determine the appropriate estimated tax payments for businesses and individuals that may have a dramatically different tax liability in the 2018 year as a result of the Proposal.”