Cash may still be king (for tax purposes, that is) | Maryland Association of CPAs (MACPA)

09/12/2014 • by MACPA

Cash may still be king (for tax purposes, that is)

Did you know that the cash basis method for tax almost went away?

File this under the “What have we done for you lately” category.

One of the top reasons we (state CPA societies and the AICPA) exist is to represent our members before the U.S. and state legislatures. Last night, we received notice from the AICPA’s Capitol Hill team that one of our major efforts over the past year paid off.

The issue was a congressional mandate that would ban the use of the cash-basis method for tax purposes for businesses and individuals with more than $10 million in annual gross receipts. It would have directly impacted many CPAs and CPA firms, along with other “local job creators and professionals, including accountants, architects, attorneys, dentists, engineers, farmers, physicians and financial service professionals,” according to the legislators who signed onto the letter on Sept. 11.

The AICPA reported in a press release sent to us, “A bipartisan majority of the U.S. House of Representatives – 233 members – have signed a letter urging the House leadership to preserve the cash method of accounting for tax purposes, writing that proposals requiring a transition to the accrual method “will have a severely detrimental impact on thousands of businesses in our districts.

“Colleagues from state CPA societies and our members have been instrumental in this effort,” said AICPA President and CEO Barry C. Melancon, CPA, CGMA. “Thanks to them, more than half of the House and nearly half of the Senate – from both parties and every state – have voiced their opposition to a proposal that unfairly penalizes CPA firms, among other businesses. The accrual accounting mandate is bad tax policy that should be abandoned by the House and Senate.”

We began letter-writing and contacting our Maryland delegation last September when the AICPA team alerted us to the issue. Since then, there has been a constant communication back and forth between the AICPA, our MACPA keypersons and our legislative advocacy team. This is a living example of the power of the national organization and the state-based association working together for the benefit of all CPAs. It is why you really do need to support us both, and most CPAs do.

A big thanks to our Maryland representatives in both the Senate and House that signed onto these letters of opposition – Sen. Barbara Mikulski and Reps. Andy Harris, Dutch Ruppersberger, Donna F. Edwards, John K. Delaney and Elijah Cummings.

Now get back to those taxes!

Your browser is out-of-date!