CPAs Tell IRS to Improve Service, Provide Permanent Disaster Tax Relief and Preserve Cash Accounting Method

Many respected leaders of the accounting profession visited Capitol Hill on Tuesday to make the case for several issues of importance to the accounting profession and the public, including the need to improve Internal Revenue Service (IRS) taxpayer services. The visit is a highlight of the three-day meeting of the American Institute of CPAs’ (AICPA) governing Council in Washington, D.C.

Concerned about the impact of IRS service reductions on taxpayers and tax practitioners, the AICPA Council on May 17 adopted a resolution urging policy makers to create a bi-partisan forum to “make recommendations that enable the IRS to achieve its stated mission and to transform it into a modern functioning, evolutionary, and respected federal agency for the 21 Century.”

“Taxpayer service must remain a high priority under any circumstances,” said AICPA president and CEO Barry C. Melancon, CPA, CGMA. “We are hopeful that an objective forum will be able to identify ways to improve IRS responsiveness to taxpayers and tax practitioners alike.”

The CPA profession also is calling for permanent tax relief when natural disasters strike. “Because tax relief is dependent on Congressional action after every disaster, it has been available only sporadically,” the AICPA explained in a publication developed for the Hill visits. “The CPA profession believes Congress should provide fairness, certainty and consistency with permanent tax relief measures that automatically apply once the President issues a disaster declaration,” it states. Based on experience with past tax relief and in partnership with state CPA societies, the AICPA has identified 10 disaster tax relief measures that should be permanently enacted into law.

In addition, the meetings will give CPAs from throughout the nation an opportunity to underscore the importance of preserving the use of the cash basis of accounting for tax purposes. The congressional debate over tax reform has included consideration of a proposal to require virtually all service companies with gross receipts greater than $10 million to change to the accrual method of accounting. Such a mandate would increase administrative and recordkeeping burdens on businesses in the field of accounting, farming, health, law, engineering and architecture, among others.

Mobile workforce legislation is another likely topic during constituents’ meetings with their members of Congress. Forty-one states impose a personal income tax on the wages of individuals whose work takes them over state lines. And several states require withholding for as little as one day of work. In response, bills introduced in both the House and Senate with the profession’s backing would create a uniform national standard. Employees traveling to a nonresident state for fewer than 30 days would have no tax liability in the nonresident state, and the employer would have no withholding obligation.

AICPA leaders from each of the 50 states, the District of Columbia, Puerto Rico, the Virgin Islands and Guam attended the Council meeting.

Guest speakers included U.S. Representative Paul Ryan (R-Wis.), chairman of the House Ways and Means Committee; U.S. Senator Heidi Heitkamp (D-N.D.); Brian Peretti, director, Office of Critical Infrastructure Protection and Compliance Policy, U.S. Department of the Treasury; Billy Atkinson, chairman of the Private Company Council, and Tony Chanmugam, Group Finance Director of BT Group.

AICPA Council determines Institute programs and policies. It has approximately 260 members with representatives from every state and U.S. territory. Council meets twice each year.