Practitioner groups are taking their members’ concerns to Washington.
The biggest issues of 2017 for tax pros
May 25, 2017 6:04 PM
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Every year after tax season, groups representing accountants and tax professionals take their members’ concerns to Washington, D.C., whether in person or by letter, to educate Beltway insiders on current issues, problems and opportunities in the field.
In recent weeks, the American Institute of CPAs, the National Conference of CPA Practitioners, the National Association of Enrolled Agents and others have visited congressmen, senators and White House staffers, and also joining other groups like the National Society of Accountants, the National Association of Tax Professionals, Padgett Business Services and others are reaching out to lawmakers on issues like improving the Internal Revenue Service.
Here are 11 of the top topics they’re raising on Capitol Hill and in the White House.
In recent weeks, the American Institute of CPAs, the National Conference of CPA Practitioners, the National Association of Enrolled Agents and others have visited congressmen, senators and White House staffers, and also joining other groups like the National Society of Accountants, the National Association of Tax Professionals, Padgett Business Services and others are reaching out to lawmakers on issues like improving the Internal Revenue Service.
Here are 11 of the top topics they’re raising on Capitol Hill and in the White House.
Andrew Harrer/Bloomberg
Tax reform
Both the AICPA and the NAEA noted that the tax reform proposals being considered in Washington are a high priority for them, with a special eye on making sure that they meet proper standards for quality tax policy. The AICPA told lawmakers that it stands ready to offer assistance to lawmakers on tax policy matters, including providing “unbiased facts and analysis to foster informed discussion.”
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IRS modernization
With IRS service levels scraping bottom, a host of tax professional organizations has collaborated on a proposed framework for improving the agency -- “Ensuring a Modern-Functioning IRS for the 21st Century” – which they’re offering to Congress as a clear set of guidelines for creating a service-oriented modernized tax administration system. Among the groups supporting the proposed framework are the AICPA, the NAEA, NCCPAP, the NSA, the NATP, and Padgett.
Mobile workforce legislation
The AICPA advocates a 30-day standard for interstate income tax withholding, which would ease the burden on non-resident workers and promote interstate commerce by simplifying the requirements for taxpayers and their employers.
Luke Sharrett/Bloomberg
IRS regulation of tax preparers
Both the NAEA and NCCPAP voiced support for allowing the IRS to set minimum standards for tax preparers – though some other groups have traditionally opposed it.
Andrew Harrer/Bloomberg
Online professional accounts
The AICPA is suggesting that the IRS should provide practitioners with a tax professional account as part of its online portal, with account access to all of their clients’ information where the practitioner has a valid power of attorney. And all that should be part of a new “practitioner service unit” to centrally manage all of programs, processes and tools that affect practitioners.
Modifying the Form 1040
This NCCPAP recommendation would modify the signature block on Form 1040 so both IP PINs (taxpayer and spouse) can appear on the return. Any return without IP PINs when they have been assigned would be rejected. The Exemptions section on Line 6c would also be modified to allow the entering of an IP PIN when one has been issued.
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Easing of RMD rules
NCCPAP suggests that the rules governing required minimum distributions should be changed to permit taxpayers to combine all their required RMD amounts from all their retirement accounts for a year, and then take the entire amount from whichever account they choose. The group also proposes moving RMDs from the “half-birthday” of age 70-1/2, to the regular birthday, which is a much more meaningful milestone for most taxpayers.
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Full deductibility of LTCI premiums
NCCPAP also wants to see all expenditures for long-term-care insurance premiums allowed as an above-the-line deduction, similar to the self-insured health insurance deduction.
Tax preparation and representation fees
In a proposal that would be of interest to all tax pros, NCCPAP suggested that prep and representation fees should be deductible on page 1 of a tax return as an adjustment to adjusted gross income, with the requirement that the preparer’s PIN be listed in order to allow the deduction.
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S corp rental deduction
Owners of S corporations face stringent restrictions on the home office deduction, due to rules that govern renting home office space to one’s employer. NCCPAP would like to see owners of S corporations able to take home office deduction in a manner that puts them at parity with other forms of business entities.
Early distributions
Under this NCCPAP proposal, workers who leave their jobs in the year they turn 55 or older would be allowed withdraw money from their 401(k) without having to pay the 10 percent penalty. If the 401(k) assets were re-rolled over to an IRA, a penalty-free distribution could not occur before age 59-½, unless the individual qualifies for one of the other early-withdrawal penalty exceptions. Individuals who lose their jobs and must withdraw funds from an IRA for general living expenses ought to be able to do so free from the 10 percent penalty, the group maintains.
