By Bernie Becker - 12/05/13 04:41 PM EST
An accountants group is asking the Senate’s top tax writer to reconsider plans to change accounting rules for certain businesses.
The American Institute of Certified Public Accountants (AICPA) says that Congress should not impose new limits on whether businesses and individuals can use the "cash" accounting method.
Under the cash accounting method, companies count income for tax purposes once the cash is actually in hand. The accrual method counts a transaction once it’s made, regardless of when a company actually gets paid.
Baucus’s draft also allows broader use of the cash accounting method, but AICPA said forcing farmers, taxpayers and small businesses to use the accrual method would be a burden.
“The cash method of accounting is simpler in application, has fewer compliance costs, and does not require taxpayers to pay tax before receiving the income being taxed,” the group wrote to Baucus and Sen. Orrin HatchOrrin HatchGOP lawmakers call for overhaul of proposed corporate tax rules DEA decision against reclassifying marijuana ignores public opinion Trump op-ed counters Clinton’s pitch to Utah voters MORE (Utah), the top Republican on the Finance Committee.
“We believe that Congress should not further restrict the use of the long-standing cash method of accounting for the thousands of U.S. businesses that rely on it.”