October 27, 2021

AICPA to Senators: Don’t Even Think About Touching Cash-Basis Accounting

Maybe you've noticed, but there are a few things that grind the AICPA's gears:

1. Questioning the integrity of CPAs in a YouTube video, on the radio or anywhere for that matter.

2. Management accounting credentials that are not the CGMA.

3. Nationally syndicated columnists suggesting that anyone is more qualified than a CPA to represent a taxpayer before the IRS.

You can add to that list: anyone who's even thinking about getting rid of cash-basis accounting:

In a letter submitted for the record of the committee’s hearing on “Navigating Business Tax Reform,” AICPA President and CEO Barry C. Melancon, CPA, CGMA, wrote, “As the Committee drafts its proposals, we urge maintaining the current availability to use the cash method of accounting for pass-through entities and personal service corporations, such as accounting firms.  Determining taxable income under the cash basis is simple in application, is a method of accounting which the service industry has used for decades, and must remain an option for these businesses.”

Uh, okay? Last we checked, 46 US Senators had the AICPA's back on this. Sure, that was the last Congress, but has the cash method come under attack and we weren't made aware of it? Was there something in the Panama Papers about this? Did Donald Trump threaten deportation for cash-basis businesses?

Here's more from AICPA President, CEO and Venti Iced Skinny Hazelnut Macchiato, Sugar-Free Syrup, Extra Shot, Light Ice, No Whip drinker Barry Melancon's letter:

“The AICPA has consistently supported tax reform efforts that promote simplicity and economic growth and do not create unnecessary administrative and financial burdens on taxpayers,” Melancon wrote. “An accrual method mandate falls short in that regard. We strongly urge retaining use of the cash method of accounting.”

Again, not sure what provoked the cash-method to launch such a vigorous offensive, but maybe the AICPA knows something we don't.

[AICPA]

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Comments are closed.

Related articles

Friday Footnotes: Deloitte Complains Its Way to a Contract; Deficiencies Abound; Beyond the Windowless Audit Room | 10.22.21

How CPAs can rise above a polarized political climate [Journal of Accountancy] Aside from being prepared for these possible changes, [Publisher and editor-in-chief of The Cook Political Report Amy] Walter recommends that CPAs break away from the polarization that has made each side feel like an election is an existential fight for the real America. […]