Pandemic-related concerns, natural disasters, and new tax laws were among the many challenges that faced tax practitioners and their clients in 2021. In this ever-evolving environment, the AICPA Tax Policy and Advocacy group worked with the AICPA Congressional Affairs group to represent the interests of practitioners and the public.
The AICPA's tax advocacy successes in 2021 include:
Practitioner and taxpayer relief in the wake of natural disasters
The AICPA supported the introduction of federal legislation to reduce practitioner and taxpayer challenges, including:
- The Filing Relief for Natural Disasters Act (H.R. 3574/S. 2748), which would authorize the IRS to postpone federal tax filing deadlines upon a governor's declaring a state of emergency or disaster and extend mandatory extensions from their current 60 to 120 days.
- The Claiming Losses After Disasters Act (S. 3173), which would permanently provide disaster victims additional tax relief for damages and losses not reimbursed by insurance.
- The Disaster Retirement Savings Act (S. 2583), which would allow penalty-free distributions from retirement plans within 180 days of a disaster declaration.
Practitioner and taxpayer relief during the ongoing COVID-19 pandemic
- Extension of the April 15 deadline and other filing and payment relief: The AICPA successfully encouraged congressional and IRS (and state CPA societies with their state tax authorities) support for extending the April 15, 2021, individual and corporate income tax filing deadline to May 17. The AICPA also supported the Tax Deadline Simplification Act (H.R. 4214), which would change the second- and third-quarter estimated income tax installment due dates from June 15 and Sept. 15, respectively, to July 15 and Oct. 15.
- Continued temporary e-signature relief: In letters and discussions, the AICPA successfully urged the IRS (and state CPA societies with some of their state tax authorities) to provide continued e-signature relief on key forms beyond June 30, 2021, through Oct. 31, 2023.
- Tax penalty relief: The AICPA successfully advocated for the IRS to provide penalty relief for partnerships' tax year 2020 reporting of partners' beginning capital accounts. It also supported the introduction of H.R. 5155, the Taxpayer Penalty Protection Act of 2021, to provide estimated tax penalty relief for taxpayers impacted by COVID-19 and to reduce contact with the IRS.
- Employee retention credit (ERC) and PPP basis: The AICPA successfully advocated for the IRS to provide necessary guidance on the ERC and guidance on Paycheck Protection Program (PPP) loan forgiveness and basis for partnerships and S corporations.
Regulatory and other IRS guidance
In addition to all these and other tax legislative advocacy efforts, the AICPA Tax Policy and Advocacy group and its volunteer members meet and work with Treasury and the IRS on regulatory and administrative matters. These efforts include providing suggestions for the IRS Priority Guidance Plan and needed Treasury and IRS guidance, such as by comments on proposed regulations.
The AICPA successfully advocated and made recommendations that were reflected in IRS guidance issued in 2021, including:
- Final regulations under Sec. 163(j) regarding treatment of foreign tax expense.
- Final regulations under Sec. 1061(d) on carried interest and trust-related operational rules.
- Final regulations for small business taxpayer exceptions under Secs. 263A, 448, 460, and 471.
- Guidance on automatic accounting method changes under the Sec. 451 regulations.
- Guidance on Sec. 451 regarding the tax year of income inclusion under an accrual method of accounting and advance payments for goods and services.
- Updated procedures to communicate when an employer identification number on Form 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner, is assigned, updated, or corrected.
About AICPA Tax Policy and Advocacy
The AICPA Tax Policy and Advocacy group, which includes the AICPA Tax Policy and Advocacy team and volunteer members (through selected technical resource panels and committees), continually monitors and advocates on emerging legislative, regulatory, and administrative tax matters on behalf of AICPA members. Broadly, these efforts include:
- Developing and submitting comments and testimony and advocating for sound tax policy and effective administration;
- Representing CPAs before tax policymakers, government, the public, and stakeholder groups
- Providing updates on emerging tax advocacy issues through the AICPA Town Hall Series and the quarterly Washington Tax Brief, a webcast series that keeps practitioners informed of what is going on in Washington that may affect them, their practices, and their clients; and
- Communicating on priority tax advocacy issues through creating website updates and videos, presenting at AICPA conferences and state CPA societies, and writing articles for AICPA publications.
Following the successes of this year, the AICPA Tax Policy and Advocacy group is looking forward to addressing many new and continuing tax policy and advocacy issues in 2022, which include administrative issues of the upcoming filing season and, likely, implementation guidance if the budget reconciliation legislation known as the Build Back Better Act, H.R. 5376, is enacted.
— Eileen Reichenberg Sherr, CPA, CGMA, M.T., is a director, AICPA Tax Policy and Advocacy. To comment on this article or to suggest an idea for another article, contact Paul Bonner (Paul.Bonner@aicpa-cima.org), a Tax Adviser senior editor.