VSCPA Supports Amendment to Repeal Section 413 of the American Jobs and Closing Tax Loopholes Act of 2010

June 16, 2010

The Honorable Mark Warner
United States Senate
Washington, DC 20510

Dear Senator Warner:

We are writing to you on behalf of the 9,000 members of the Virginia Society of CPAs (VSCPA) to express strong support for the proposed amendment to the American Jobs and Closing Tax Loopholes Act of 2010 by Senators Snowe and Enzi that would strike Section 413 of the bill. We hope you will support this amendment during the debate on the Senate floor.

We believe that Section 413 of the American Jobs and Closing Tax Loopholes Act of 2010 will result in a significant increase in taxes and complexity for S corporations and their shareholders, and for certain limited partners. Section 413 represents a major change in longstanding tax policy that has never been the subject of public hearings, thus, we are concerned that there may be unintended consequences that have not been fully aired and discussed. Accordingly, we strongly support S. Amdt. 4342, which would strike Section 413.

We support striking the proposed Section 413 because it:

  • Fails to take into account a fair and reasonable return on the human and investment capital of the owners
  • May reduce Social Security benefits for early retirees
  • May create unintended consequences to qualified and non-qualified retirement plans of owners that would now have both wages and self-employment income;
  • Ignores the fact that the Internal Revenue Service currently has the appropriate enforcement tools it needs to re-characterize the distributions of S corporations as salary subject to employment taxes under FICA

This major change in longstanding tax policy that has not been the subject of a public hearing, coupled with the unintended consequences we believe will occur, causes us to strongly support the Snowe/Enzi amendment (S. Amdt. 4342), which strikes Section 413 of the bill.
 
Thank you for your consideration of the views of the VSCPA. Please feel free to contact me or VSCPA Government Affairs Director Emily Walker at ewalker@vscpa.com or (804) 612-9428 if you have questions or if we can be of any further assistance.

Sincerely,

Bradford R. Jones, CPA
Chair, Virginia Society of CPAs

cc:   American Institute of CPAs

LAST UPDATED 6/16/2010

This content has not yet been rated.

1 Poor 3 Fair 5 Excellent
 1  2  3  4  5

Comments