September 24, 2022

The AICPA Has Written a Strongly-Worded Letter to the Treasury Department on Remote Work (UPDATE)

If you thought the AICPA’s only job is gatekeeping the CPA exam and selling you insurance offers you are WRONG. They also write strongly-worded letters, sometimes on behalf of our nation’s CPAs or, as in the case of this latest letter, on behalf of American taxpayers. Let’s see what they’ve been up to.

From the news release:

The American Institute of CPAs (AICPA) submitted comments to the Department of the Treasury and the Internal Revenue Service (IRS) requesting updated guidance in several key areas related to employees working remotely and offering recommendations regarding the taxation of payments related to remote work.

The AICPAs comments and recommendations focus on the following areas:

  • Principal Place of Business
  • Work Arrangements: Employer-Location Based, Remote, and Hybrid
  • Pursuit of a Trade or Business
  • Non-Travel Expenses Incurred While Working Remotely

“Work Arrangements” includes an expanded set of bullets of its own:

  • Definitions of Employer Location-Based, Remote and Hybrid Work Arrangements to Define Employee’s Tax Home
  • Facts and Circumstances Test for use in the Classification of a Remote Employee and Defining a Hybrid Employee’s Tax Home
  • Safe Harbor for Use in Defining a Remote Worker
  • Employee-Employer Arrangement

Whether useless middle managers like it or not, remote work is here to stay. As such, the AICPA would like the IRS to address this as current rules were not built with widespread remote and hybrid work in mind.

“Many employers recognize the increased productivity and note the value of decreased office maintenance costs,” reads the AICPA press release. “However, this arrangement has led many employees questioning the impact on various benefits such as expenses for travel to an employer-provided work location when travel days are limited and the travel distance may have been expanded. Many revenue rulings and interpretations of case law are outdated, which creates unnecessary confusion and stress.”

“Many companies are moving to fully remote or hybrid work schedules, causing tax issues with fringe benefits which employers offer to employees,” said AICPA Director for Tax Policy & Advocacy, Kristin Esposito, CPA, MST. “The old rules aren’t working anymore. The AICPA has submitted recommendations to the IRS that account for this shift, which we urge them to strongly consider.”

Update: The full AICPA letter is included below.

AICPA Submits Comments Remo… by Adrienne Gonzalez

AICPA Releases Comments Requesting Guidance Related to Remote Work [AICPA]

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