The AICPA’s tax coverage and advocacy paintings: 2022 highlights

Two groups on the AICPA paintings carefully in combination and with our group’s participants to recommend on tax regulatory and legislative issues that impact the career: the AICPA Tax Coverage & Advocacy staff and the AICPA Congressional & Political Affairs staff. The yr 2022 proved to be eventful for federal tax coverage and stored our groups and participants busy filing over 60 remark letters to Congress, Treasury, and the IRS, with regards to a number of main legislative expenses containing tax provisions signed into legislation, persisted IRS taxpayer and practitioner provider issues, and tax administrative adjustments.

In collaboration with our tax advocacy companions — our key volunteers, the state CPA societies, and different skilled organizations — the AICPA ensured that the career used to be offering well timed and treasured knowledge to federal decision-makers on tax problems. Our paintings in 2022 isn’t over but, because the lame-duck congressional consultation would possibly nonetheless grasp the possibility of a year-end tax invoice.

Within the interim, then again, we glance again at highlights of the AICPA’s tax advocacy actions to this point this yr.

Attesting earlier than the Senate Finance Committee on tax submitting season problems

In February 2022, the Senate Finance Committee invited AICPA Tax Government Committee (TEC) Chair Jan Lewis to testify earlier than it at a listening to that spotlighted IRS customer support demanding situations. For the reason that get started of the COVID-19 pandemic, lots of our participants (and maximum American citizens) have believed “taxpayer provider” on the IRS has now not took place a lot. Whilst less-than-adequate taxpayer provider from the IRS isn’t a brand new factor, it used to be exacerbated via pandemic demanding situations that ended in a top backlog of unprocessed tax returns and correspondence.

For tax practitioners, the backlogs regularly intended that deductions and pandemic aid advantages have been not on time via months (and once in a while years) — irritating purchasers and forcing practitioners to plead for persistence. The AICPA made bettering IRS provider deficiencies a significant and well-publicized federal tax advocacy initiative. 

Making sure congressional motion for practitioner aid

Within the wake of the worst of the COVID-19 pandemic, taxpayers and their tax advisers confronted IRS demanding situations that made it tricky to voluntarily agree to tax tasks regardless of making good-faith efforts to take action. The AICPA’s advocacy paintings teaching participants of Congress led to 4 bipartisan and bicameral (joint Space and Senate) letters from legislators to the IRS and Treasury at the want for penalty aid, discounts to the tax go back and correspondence backlogs, and a pause to taxpayer notices. Our talent to convey congressional force to undergo led to concrete movements from the Carrier in different spaces, together with:

• Paused IRS notices: The AICPA drafted, and secured congressional sponsors for, two letters to Treasury and the IRS in 2022 elevating tax submitting season problems and making suggestions. The letters have been signed via greater than 200 lawmakers, leading to Treasury’s resolution to pause many computerized notices to taxpayers and exempt organizations, together with ones associated with assortment actions.

• Overdue-filing penalty aid: Through leveraging proposed congressional law (H.R. 5155, the Taxpayer Penalty Coverage Act of 2021) and congressional letters, in addition to many letters and conferences with Treasury and IRS, the AICPA effectively advocated in 2022 for the IRS to offer COVID-19-related penalty aid for overdue filers for 2019 and 2020 via issuing Understand 2022-36. The AICPA additionally persisted to recommend for an prolonged time limit and expanded the scope of aid.

• Competitive ERC turbines: In more than one discussions with the IRS and participants of Congress, the AICPA trained key officers on issues for CPAs and their purchasers with reference to worker retention credit score (ERC) “turbines,” or turbines of unsuitable credit score claims, that resulted within the IRS’s offering a caution concerning the observe.

Advocating for taxpayer aid within the wake of herbal failures

The country steadily stories a devastating number of herbal failures similar to hurricanes, floods, tornadoes, and wildfires all the time of the yr, however the present machine does now not supply truthful and dependable tax help for crisis sufferers within the aftermath. The AICPA tax and congressional advocacy groups and our participants helped flip a long-standing AICPA coverage advice on crisis aid into bipartisan and bicameral law (H.R. 6241/S. 2583, the proposed Crisis Retirement Financial savings Act) that used to be therefore changed and integrated within the Senate Finance Committee’s retirement package deal (S. 4808, the Bettering American Retirement Now Act).

This provision would permit people suffering from herbal failures to withdraw as much as $22,000 from certified retirement accounts with out being assessed early-withdrawal consequences and charges. Permitting herbal crisis sufferers to faucet into their very own price range to hide surprising and emergency prices related to those failures would take away an needless burden whilst they look ahead to govt help and insurance coverage reimbursements that is probably not instantly impending. This tax aid can be robotically brought about if the president problems a federal crisis declaration. We’re hopeful that this language will likely be integrated in a 2022 year-end invoice.

Advocating with the IRS and Treasury on technical issues

In 2022, the TEC and participants of the AICPA IRS Advocacy & Members of the family Committee, in conjunction with more than a few AICPA technical useful resource panels, have been engaged in lots of tax coverage and advocacy efforts, drafting and filing many feedback, and assembly and discussing essential problems with congressional, Treasury, and IRS officers, on a lot of subjects together with:

• Agenda Okay-2/Okay-3 submitting aid: The AICPA submitted feedback (Feb. 18, 2022, Feb. 24, 2022 (with state CPA societies), Aug. 31, 2022, and Nov. 30, 2022) and held a number of discussions with IRS officers, ensuing within the IRS’s:
  • Offering some penalty aid for 2021 returns;
  • Exempting sure home partnerships for 2021 tax years from the Agenda Okay-2/Okay-3 submitting necessities;
  • Revising the draft directions for 2022 tax years;
  • Converting from a Jan. 15 notification requirement date to the date of Agenda Okay-1 to the spouse and as an attachment to Agenda Okay-1; and
  • Converting the one-month requirement from the due date, now not together with extensions, to the date the go back is filed, together with extensions.

• SECURE Act proposed rules: The AICPA submitted pre-release feedback that led to two asked provisions being integrated within the proposed rules beneath the Atmosphere Each and every Group Up for Retirement Enhancement (SECURE) Act, P.L. 116-94: (1) readability at the age of majority and (2) definitions and provisions associated with see-through trusts, conduit trusts, and accumulation trusts. Additionally, the IRS supplied transition aid for 2020 and 2021 required minimal distributions, because the AICPA had recommended in its June 14, 2022, and July 1, 2022, feedback at the proposed rules.

• IRS Appeals to offer supervisor knowledge: All through a number of conferences, the AICPA raised issues and asked that taxpayers and their representatives be supplied touch knowledge of IRS Appeals managers and the collection of the way to meet with an IRS Appeals officer (e.g., phone, video, or in particular person). Because the AICPA asked, the IRS modified its coverage to offer this data within the preliminary touch letter.

• R&D credit score declare duration prolonged: After AICPA letters (April 14, 2022, and Sept. 21, 2022) and discussions with IRS officers, the IRS introduced that it’s extending for every other yr (by way of Jan. 10, 2024) the transition duration all over which taxpayers are supplied 45 days to easiest a analysis credit score declare, to assist in complying with the credit score’s new knowledge necessities.

Having a look forward to 2023, the AICPA’s tax and congressional advocacy groups, running carefully with AICPA participants, will proceed to recommend on essential tax regulatory and legislative issues. Those come with the implementation of enacted law, similar to the company choice minimal tax and effort tax credit, in addition to proposed tax law, rules, and steering. Our efforts may also prolong to tax administrative problems, similar to taxpayer provider. We will be able to proceed to stay participants knowledgeable of problems, traits, and our additional tax advocacy efforts.

— Eileen Reichenberg Sherr, CPA, CGMA, MT, is director–Tax Coverage & Advocacy, and Lauren Pfingstag Vahey is director–Congressional & Political Affairs, with AICPA & CIMA, in combination because the Affiliation of World Qualified Skilled Accountants. To remark in this article or to indicate an concept for every other article, touch Paul Bonner at [email protected].