Act now on tax conformity
Letter to the Editor
This letter was published in the Pioneer Press on May 9, 2018.
Now that the Legislature's tax proposals are released and the debate continues about which option is best for Minnesotans, the 8,500 members of the Minnesota Society of Certified Public Accountants (MNCPA) stress the importance of passing a conformity bill this session, and not wait until 2019 to address this important work.
Federal conformity is a perennial issue; any federal tax changes that occur throughout the year have to be addressed when the Legislature convenes. Our position has always been to address any retroactive tax changes as early as possible in the session to not disrupt the tax season. This session, because the Tax Cuts and Jobs Act mostly affects next year's tax season, the tax bill and conformity debate have been extended into the last month of the 2018 session.
That being said, the MNCPA urges lawmakers to not delay the debate any longer. Taxpayers and their advisers need as much time as possible to evaluate how the sweeping federal changes -- and any items to which Minnesota conforms -- will affect their 2018 tax return and plan accordingly. If the Legislature waits until next session (January 2019) to see if the House or Senate majorities change or the governor's office flips parties, then the ability to plan becomes nearly impossible. As a result, complexity increases, costs go up and compliance becomes overly burdensome.
As CPAs, our clients and businesses rely on us to provide tax planning recommendations throughout the year. We interpret the rules that apply to each individual, family and business we serve so they are able to make thoughtful financial decisions. Not addressing conformity this session ultimately hurts taxpayers' decision-making process. It would be like planning for a tropical vacation for months, only to be told shortly before departing that you're going to the Arctic.
Reducing complexity and easing compliance for Minnesota's taxpayers shouldn't be a political issue. Addressing conformity this session will allow CPAs to be more effective advisers, and help taxpayers plan ahead so that there are minimal surprises at filing time next year.
Rebecca Keran, CPA
Chair, MNCPA board of directors