By Bernie Becker - 01/15/14 12:10 AM EST
The American Bar Association is joining the chorus in telling the top tax writers in Congress to rethink proposals to force many businesses to change accounting methods.
But James Silkenat, the bar association president, says that move would hurt many law firms, and that lawmakers should let companies what he called the more simpler, straightforward cash accounting method.
"Simplicity is important from a compliance perspective because it enables taxpayers to better understand the tax consequences of transactions in which they engage or plan to engage," Silkenat wrote.
Companies using a cash accounting methods consider payments received for tax purposes when the cash is hand. Under the accrual method, that payment is recognized when it was earned – which generally before the business received the money.
Dozens of House members have also urged tax writers to back away from the accounting proposal.