December 2010
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Making Our Voice Heard on Tax Issues
In June, I wrote about how crucial the role of the CPA will be in deciphering and applying the requirements of the country's new healthcare reform law. One provision in the Patient Protection and Affordable Care Act that our CPA members have already identified as problematic imposes unreasonable and extremely burdensome Form 1099 reporting requirements on all business taxpayers, particularly on small businesses. The provision makes changes to IRC section 6041 and requires that businesses begin reporting purchases of goods and services from third-party vendors valued at $600 or more.
That means businesses would be required to obtain tax identification numbers from many new vendors—something a business may overlook, leaving its CPAs to try to track down the information. Members in our technical committee's tax division noted that the cost and burden to the IRS would be immense, as the agency would have to manually input millions of additional 1099s, delaying the availability of wage and income information to the IRS and to practitioners.
The Society Takes Action
The bottom line is that this provision of the healthcare law should be repealed. Most of you know or have heard my message on the power of a collective voice and how membership and active participation in your Society will give New York State CPAs an even stronger voice on issues that are important to the profession. The Society attacked on two fronts this threat to small businesses and the CPAs who serve them. The Society's Taxation of Individuals Rapid Response Subcommittee identified the 1099 issue, and, in little more than a week, the Society sent a comment letter to the IRS stating that the best course of action would be to repeal this provision completely. The letter also noted how the requirement would negatively affect not only large and small businesses, but also the IRS and the public.
The Society's position on the 1099 reporting requirement was also made clear to our federal legislators. Working in conjunction with the AICPA, NYSSCPA President Margaret Wood urged each lawmaker in New York's congressional delegation to help repeal the 1099 provision. While Congress has not yet solved the problem, the Obama administration knows there is one. On September 13, Treasury Secretary Timothy Geithner and Health & Human Services Secretary Kathleen Sebelius stated in a letter to Senate Majority Leader Harry Reid that the burden created by the new 1099 reporting requirement is “too great” for businesses.
The NYSSCPA's collective voice is also being heard by federal lawmakers on the proposed IRS regulation to require non-signing preparers at CPA firms to add their preparer tax identification numbers (PTIN) to returns. A testing requirement for these individuals proposed under the IRS's program imposes an additional regulatory burden without clear public protection. Wood again reached out to our congressional lawmakers to advocate on behalf of our members and the public. Because both the NYSSCPA and the AICPA have taken the same position on both issues, our joint efforts are more likely to show results. At a recent AICPA tax conference, IRS Commissioner Douglas Shulman stated that it is “highly likely” that there will be some relief from testing and continuing education requirements for nonsigning pre-parers supervised by a CPA, enrolled agent, or lawyer.
Rapid Responders
These results are directly related to the unified advocacy efforts made by CPAs identifying and responding to tax issues that negatively affect the profession and the public. Each of our 15 tax committees now has its own Rapid Response Subcommittee organized to ensure that the Society can quickly identify and respond to more issues like these on our members' behalf— whether that means drafting a comment letter, contacting our state or federal representatives, or contacting our members to help us send a message to state or federal lawmakers.
These tax initiatives only complement our rapid response to national and state accounting and auditing issues. Since June, our committees have responded to 10 FASB exposure drafts; seven requests for comment from the AICPA on proposed auditing standards; and requests for comment from several other accounting regulators or government agencies, including the Public Company Accounting Oversight Board (PCAOB), the International Accounting Standards Board (IASB), and the New York State Board for Public Accountancy. Last fiscal year, we produced 36 comment letters; this year, we've already drafted 20.
How You Can Help
But that's just the beginning. The NYSSCPA's goal is to expand our state and federal advocacy initiatives over the next several years. We have a loud voice in advocacy, but, more importantly, we need your input on where we should direct these efforts next so that our voice only gets louder. Help us identify the issues that are important to you, your clients, and businesses, and in return we'll enlist the talent of more than 27,000 CPAs to respond.