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Washington Alert – Bits ‘n Pieces – Overhaul of Internal Revenue Code, ABA objects to proposed changes, FBI and tax-exempt, and Tax Court Judges

Envisioning a Code that is “simpler and fairer,” Rep. Dave Camp (R-MI), chairman of the House Ways and Means Committee, has called for an overhaul of the Code  getting rid of all the “junk it contains” – that will result in a 25% decrease in its size. In addition to simplicity and fairness, Camp wants a Code that is “more efficient” and one that makes it “more accountable to the taxpayer.” According to Camp, there have been more than 4,400 changes to the Code in the last 10 years. “Our tax system is too complex, too confusing and too costly,” he said in a video that appears on the committee’s website. “Too often today, the tax code is viewed through a single lens that it is designed for special interest groups or funnels hard-earned taxpayer dollars to industries with well-connected lobbyists,” Camp said in a statement accompanying the unveiling of the video. “That is not tax reform,” he added.

The American Bar Association (ABA), in letters to the leadership of the House Ways and Means Committee and the Senate Finance Committee, has voiced its opposition to proposed changes to allowed accounting methods that would muddle tax law. Specifically, as described by the ABA, the provision in question that is contained in both the House and Senate versions of the “Tax Reform Act of 2013” would require all law firms and other personal service businesses with annual gross receipts over $10 million to use the accrual method of accounting rather than the cash receipts and disbursement method of accounting. “This far-reaching provision would create unnecessary complexity in the tax law by disallowing the use of the cash method; increase compliance costs and corresponding risk of manipulation; and cause substantial hardship to many law firms and other personal service businesses by requiring them to pay tax on income they have not yet received and may never receive,” wrote James Silkenat, the organization’s president. The House version of the letter can be found at americanbar.org/content/dam/aba/uncategorized/GAO/2014jan13_accrualaccountingissue_house_l.authcheckdam.pdf, and the Senate version appears at americanbar.org/content/dam/aba/uncategorized/GAO/2014jan13_accrualaccountingissue_senate_l.authcheckdam.pdf .

In response to word that the FBI is not planning to file criminal charges with regards to IRS’s inappropriate treatment of conservative applicants for tax-exempt status under Code Sec. 501(c)(4), two top Republican members of the House Oversight and Government Reform Committee on Jan. 15 requested that the inspector general of the Department of Justice (DOJ) investigate the propriety of DOJ’s selection of a contributor to President Obama’s political campaigns to lead a probe related to IRS.

The Senate Finance Committee on Jan. 15 approved the nominations of L. Paige Marvel to serve a second term on the U.S. Tax Court and Tamara Ashford to serve as a judge on the same court. The nominations are subject to confirmation by the full Senate. Sen. Max Baucus (D-MT), chairman of the Finance Committee, said judges must work long hours and deal with a busy travel schedule. “The job will be difficult,” Baucus said, adding that “Ms. Ashford and Judge Marvel are the right people to take it on.”

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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