On July 10, 2014, the House Small Business Committee’s Subcommittee on Economic Growth, Tax and Capital Access, held a hearing – Cash Accounting: A Simpler Method for Small Firms? Congressman Tom Rice opened the hearing noting that he is a former tax attorney and CPA. The purpose of the hearing seems to be how use of the cash method for some businesses (such as small ones) can simplify tax compliance. He did not mention Congressman Camp’s proposal to deny use of the cash method for businesses with over $10 million of gross receipts (unless they are a sole proprietor or farming business) (see Camp’s summary of the Tax Reform Act of 2014, page 87-88).

What did the subcommittee learn from the witnesses?

• The cash method is simpler than accrual. It could be even simpler if reporting was Read More