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.