U.S. House of Representatives approves bill with two provisions important to CPAs

The U.S. House of Representatives passed a bill with provisions the CPA profession has strongly urged Congress to adopt.  One provision would restore the proper relationship between tax preparers and taxpayers by equalizing IRS disclosure standards.  The other provision would free businesses from onerous recordkeeping requirements for cell phones. 

The provisions are included in H.R. 5719, the “Taxpayer Assistance and Simplification Act of 2008,” passed by the House on April 15.

The bill does face a veto threat from the White House because of provisions the Bush administration says would impose new administrative burdens on trustees of health savings accounts (HSAs) and would repeal IRS’s authority to use private debt collectors.

The legislation may be the only way to correct a flawed law passed by Congress in May of 2007 that raised the tax return reporting standards for tax return preparers to a level higher than that required of taxpayers.  These unequal thresholds create the potential for conflicts of interest between preparers and their clients, and consequently could affect the nature of taxpayers’ representation. 

The cell phone provision of H.R. 5719 would remove cell phones and similar telecommunications equipment from the definition of “listed property” in the Internal Revenue Code. 

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