The American Institute of CPAs has sent a letter outlining a set of legislative proposals to the leaders of Congress’s two main tax committees, the House Ways and Means Committee and the Senate Finance Committee, recommending ways to simplify the tax laws and make them fairer.
The AICPA said in the letter it sent last week that the focus of the proposals is on provisions in the Internal Revenue Code that “are not unduly controversial” and “are technical in nature.” The 32 proposals promote simplicity and fairness, according to the AICPA, and would improve tax administration. The proposals cover a range of tax issues affecting individuals, businesses, trusts and estates, and exempt organizations.
Among the recommendations are harmonizing and simplifying education-related tax provisions; standardizing the allowable mileage rates for business expense, medical expense and charitable contribution purposes; allowing certain attorney fees and court costs to be deductions for adjusted gross income; clarifying and simplifying reporting of cancellation of debt income; simplifying the provisions for calculating the tax on unearned income of a child; and simplifying the tax treatment of Roth IRA contributions.
The two tax committees have been at work on broader tax reform plans, but the prospects of a comprehensive tax overhaul appears to be unlikely this year, with lawmakers gearing up for midterm elections in November. However, House Ways and Means Committee chairman Dave Camp, R-Mich., is expected to release a long-awaited draft tax reform plan this week (see Ways and Means Chairman Camp Plans Draft Tax Revamp Next Week amid Political Hurdles).
In the Senate, a new chairman took over this month at the Senate Finance Committee, Ron Wyden, D-Ore., following the departure of the former chairman, Max Baucus, D-Mont., who was recently confirmed as U.S. Ambassador to China. Baucus had been working closely with Camp on the tax reform effort, but Wyden has signaled that his first priority will be to focus on the set of temporary tax provisions traditionally known as “tax extenders,” many of which expired at the end of last year.