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AICPA Identifies 8 Issues That Are Critical for Small Business Tax Reform

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Apr 27th 2015
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In written testimony submitted on April 23 to the House Small Business Committee, the American Institute of CPAs (AICPA) identified eight issues it believes are crucial to achieve small business tax reform.

The written testimony was included as part of the record of an April 15 committee hearing entitled “Tax Reform: Ensuring that Main Street Isn’t Left Behind.”

In its testimony, the AICPA explained why each of the issues is important for small business tax reform and made recommendations. The eight issues are:

  • Cash method of accounting
  • Tangible property regulations – de minimis safe harbor threshold
  • Civil tax penalties
  • Permanence of tax legislation
  • Retirement plans
  • Repeal of alternative minimum tax
  • Tax return due date simplification
  • IRS taxpayer assistance

“Compliance burdens for small business taxpayers are too heavy, both in terms of time required and out-of-pocket cost,” the AICPA stated in its testimony. “The proliferation of new income tax provisions since the 1986 tax reform effort has led to compliance hurdles for taxpayers, administrative complexity, and enforcement challenges for the IRS. We encourage you to examine all aspects of the tax code to improve the current rules.”

House Small Business Committee Chairman Steve Chabot (R-OH) said on April 15 that comprehensive tax reform is needed to make the tax code simpler, flatter, and fairer for small businesses.

“There is no doubt that we must reform our corporate tax structure; we have the highest corporate income rates in the world,” he added. “But, as our committee has identified numerous times before, our small businesses are the backbone of our economy. They create over 60 percent of the new jobs in this country and represent over 99 percent of all employers in the United States. Because so many of these enterprises file and pay their taxes on their individual return, we cannot and must not ignore them as we move forward with any tax reform debate.”

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