The minimum corporate tax included in the budget reconciliation bill would create undue complexity and alter financial accounting decision-making, according to an Oct. 28 letter from the AICPA to senior tax drafters in Congress.
The corporate minimum tax proposal in the budget bill would impose an alternative minimum tax of 15% on the income of large corporations as reported in their financial statements, with some adjustments. As written, it would only apply to companies reporting more than $ 1 billion in profits.
The AICPA said this type of tax had been tried before, with the provision on untaxed reported profits of businesses in 1986. However, the measure was quickly repealed as businesses responded by changing their accounting choices. financial to reduce their income. The AICPA argues that financial accounting should not be in a position where it is susceptible to manipulation to alter the determination of taxable income. Its aim should only be to provide valuable information to investors.
If Congress were to proceed with the corporate minimum tax regardless of these concerns, the AICPA suggests that some clarification is needed. He identifies several specific provisions which he said would add “a level of complexity and expense that is unreasonable”, are “confusing” or represent “an insurmountable degree of complexity and cost of compliance”.