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ABA Approves Section-Sponsored Resolution Opposing Burdensome New Tax Rules for Law Firms

ABA Approves Section-Sponsored Resolution Opposing Burdensome New Tax Rules for Law Firms

By Graham Hunt

11/19/13, 9:28 AM CT | Author: Sue Daly Tobias

On November 16, the ABA Board of Governors adopted a Resolution sponsored by the Business Law Section and co-sponsored by seven other sections, divisions and state bars opposing draft legislation by House Ways & Means Committee Chairman Dave Camp (R-MI) that would require all law firms and other personal service businesses with annual gross receipts over $10 million to use the accrual method of accounting rather than the traditional cash receipts and disbursements method of accounting.

The proposed provision, contained in Section 212 of the Committee’s “Tax Reform Act of 2013” discussion draft bill, would cause significant financial hardship to many law firms, accounting firms, engineering and architectural firms, and other personal service businesses by forcing them to pay tax on income they have not yet received and may never receive. Now that the ABA has formally adopted the new policy, the Section will work closely with the ABA Governmental Affairs Office and other interested sections and divisions, state and local bars, and other groups in a concerted effort to defeat the legislation.
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