The VSCPA has written a letter to Sens. Tim Kaine (D-Va.) and Mark Warner (D-Va.) expressing “deep concern” over the limitation on the use of cash accounting proposed by Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, in his Cost Recovery and Accounting Discussion Draft proposed in November.
Baucus’ proposal would eliminate exceptions for numerous professions that currently allow the use of cost accounting, forcing them to switch to the accrual method of accounting if their gross receipts of $10 million.
The VSCPA wrote:
“We believe it is important to preserve the continued availability of the cash method of accounting for non-natural taxpayers, personal service corporations and farmers. These businesses are located across our state, include nearly all industries, and are part of the driving force behind economic expansion and job growth. This provision in Chairman Baucus’ proposal would require these companies to change to the accrual method, force their owners to pay tax before they have the cash to pay it and add unnecessary complexity and costs.”