Barry Melancon, AICPA president and CEO, expects to see passage of major tax reform legislation during the Trump administration, Accounting Today reported.
Democrats may help Republican lawmakers enact the reform if Republicans can build bipartisan support, Melancon said Jan. 24 at a meeting of the Accountants Club of America in New York.
“The reason for that is you have eight Democratic senators up for re-election in 2018 who now reside in states that voted for Donald Trump, so they will need politically to look for some things to be able to convey back home,” he said. “I think the potential for tax reform will fall into that. No matter who you are or where you are on the political spectrum, it’s pretty easy to beat up on the tax code and the IRS and certainly for those senators that would be the case.”
He continued, “The political winds are there for it to pass. In all likelihood, it will be the most significant piece of tax reform legislation since 1986, and all the CPAs in the room know very clearly what I’m talking about when I say that. It will be a very significant change if it goes through the process.”
Potential reforms include allowing the IRS to automate tax processing by using information returns, repealing the alternative minimum tax and the estate tax, and changing the rules for pass-through entities, reasonable compensation and foreign revenue.
“There is a lot of traction for 100 percent write-off of all depreciable assets, except land,” he added. “They’re even talking about 100 percent write-off of inventory from a business incentive or business-processing standpoint. You can also imagine some of the passive loss rules that exist in the current tax law and how they might play out in a transition situation.”