A bipartisan group of close to six dozen lawmakers is lobbying the House’s top tax writer to change his mind about a proposal that would change accounting practices for many businesses.
House Ways and Means Committee Chairman Dave Camp (R-Mich.) rolled out a small-business tax reform proposal in March that would force many companies off the cash accounting method.
“We urge you to consider the ramifications the proposed change of limiting the use of cash accounting may have on small businesses and local economies,” added the lawmakers, who included Reps. Mike Quigley (D-Ill.), Blaine Luetkemeyer (R-Mo.), Brad Schneider (D-Ill.) and Richard Hudson (R-N.C.).
Camp’s proposal was one of three tax reform discussion drafts he’s released in recent years.
Under cash accounting methods, a payment is considered received for tax purposes when the cash is hand. In the accrual method, that payment is recognized when it was earned, which is likely before the business received the money.