2014 is off to a fast start on the cash v. accrual campaign.
The Senate Finance Committee has requested comments on their Cost Recovery discussion draft by January 17. K·Coe Isom and the Farmers for Tax Fairness campaign are working on comments on the many issues in the draft that could affect agriculture, with a significant emphasis on the cash v. accrual issue.
In December, Farmers for Tax Fairness hired Informa Economics to prepare an analysis of the impact that this tax code change could have on U.S. feedlots, dairies, and other agricultural operations. Our goal is to have that analysis completed in time for submission as part of our comments to the Finance Committee.
Representative Dave Camp, Chairman of the House Ways and Means Committee is expected to introduce a tax reform bill n the U.S. House that could include the cash v. accrual provision. Chairman Camp held off on introducing his legislation in 2013 but observers expect that he will likely introduce legislation during January or February of this year.
One significant wild card in the tax reform issue is that, in December, President Obama announced his intent to nominate Senator Baucus, the Chair of the U.S. Senate Finance Committee, to serve as U.S. Ambassador to China. If Senator Baucus is nominated and confirmed by the U.S. Senate, then he would presumably resign from the Senate. That transition could occur as early as mid-February.
If Senator Baucus leaves the Senate, Senator Ron Wyden (D-OR) is expected to become Chairman of the Finance Committee. Senator Wyden’s reputation is that of being a fiscal conservative among the Democrats who is willing to work across the aisle to secure legislative accomplishments. All of this would suggest that Senator Wyden is likely to continue the push for comprehensive tax reform in 2014 and 2015.
It is unclear at this point whether Senator Wyden would introduce legislation that would require many agricultural operations to shift to accrual accounting. Farmers for Tax Fairness will continue its efforts to convince Senator Wyden and other key members of Congress that this proposal will hurt U.S. agriculture and should not become law.