By Bernie Becker - 05/29/14 05:19 PM EDT
A bipartisan group of lawmakers is urging the House’s top tax writer to drop changes to a popular accounting method from his tax reform draft.
"I applaud Chairman Camp and his Committee's work to overhaul our nation's broken 72,000+-page tax code,” said Lankford, a member of House GOP leadership who is currently running for the Senate.
“However, as we make much needed tax reforms, we must also ensure we do not unfairly penalize companies that followed the previous tax rules.”
"The purpose of comprehensive tax reform should be to create jobs, make things simpler for people and businesses, and get our fiscal house in order,” Thompson added. “Ending LIFO will have the opposite effect.”
Under LIFO, businesses are able to assume that they sell the newest parts of their inventory first, and thus that they have kept older and cheaper goods. That, in turn, allows them to reduce their taxable income.
Camp’s draft, released in February, would force a wide range of companies, including some in the oil-and-gas sector, to switch to the “first in, first out” accounting method. That shift, the House lawmakers argue, would force companies to absorb costs they hadn’t expected.
Camp’s draft has failed to gain much traction, but lawmakers and lobbyists expect it to have at least some influence on future tax reform efforts. President Obama has also proposed rolling back LIFO in the past.