By Michael D. Colgan, CEO and executive director
The results of the November election continue to dominate headlines in the press and on social media, with speculation over appointments and policies being rampant. There is one issue in particular, one that is close to the profession, that has a good chance to move forward next year: tax reform.
The AICPA has identified several priorities that it would like to see incorporated in any tax reform proposal that advances through the legislative process. These include a repeal of the Alternative Minimum Tax, harmonization of education-related tax provisions, and consolidation and reform of the multiple retirement savings provisions in the tax code.
Lawmakers are signaling that tax reform will be a top priority. The CPA profession prides itself on providing objective analysis of potential changes to the tax code, and the PICPA will work closely with the AICPA to gather support from our Pennsylvania delegation as they consider tax reform.
Last week, the AICPA tax executive committee, the most senior committee of the AICPA’s tax division, met in Washington, D.C. The committee outlined issues it believes should be priorities as part of any major overhaul of the tax code:
- Follow the principles of good tax policy, including equity, simplicity, minimum tax gap, transparency, and economic growth and efficiency
- Repeal the Alternative Minimum Tax for simplicity and transparency
- Harmonize and simplify education-related tax provisions
- Make adjustments via the tax rate schedule (and avoid phase-ins and phase-outs wherever possible) to promote transparency
- Eliminate temporary provisions that cause uncertainty for taxpayers
- Simplify retirement savings for both individual plans, employer-provided plans, and plans for self-employed individuals
- Simplify or repeal the “Kiddie Tax” provisions for calculating tax on the unearned income of a child
- Reduce tax rates for businesses operating in the corporate form as well as a rate reduction for other forms of business
- Preserve the current availability of the cash method of accounting for tax purposes
- Focus on IRS improvement of the taxpayer and tax preparer experience through modern and secure technology, hiring and training knowledgeable employees, and seeking and using stakeholder engagement
The profession has long advocated for tax simplification, and PICPA members on AICPA council will visit with the Pennsylvania delegation in Congress in May to present our position. We may also call on members who have relationships with federal legislators to reach out and seek support for the issues outlined above.
Are there additional tax reform initiatives you would like to see included in any proposals that are not on the AICPA list above? Let me know.