Throughout the 2016 presidential campaign, Republican nominee Donald Trump spoke adamantly about cutting taxes across the board, particularly for working and middle-class America. Now the GOP candidate is president — with Republican majorities in both the House of Representatives and Senate — and Americans are waiting to see if he’ll hold true on his tax reform promises.
Amid the varied opinions over the new tax plan, there is one group of people who may be particularly nervous about the impending changes — and it’s not the Democrats.
According to William VanDenburgh, an assistant professor of accounting at the School of Business, President Trump’s tax policy could have significant ramifications for the accounting profession.
The policy, with support from a likely Congressional majority, would seek to overhaul and simplify the Internal Revenue Code (IRC) — and the Internal Revenue Service (IRS) that enforces it — by eliminating and revising many of the $1.4 trillion in tax expenditures the IRS collects yearly.
Through his article “Significant Tax Reform Is Expected in 2017 or 2018,” scheduled to be published in the May issue of TAXES — The Tax Magazine, VanDenburgh explores the U.S. tax business, which accounts for an estimated 6.1 billion hours of workers’ time at a cost of $168 billion each year.
VanDerburgh’s analysis of the industry is such: By eliminating a number of IRC expenditures, filing will becomes less cumbersome for individuals and small businesses, meaning less need for professional accounting services. And while there will likely be those who prefer to work with a Certified Professional Accountant (CPA) regardless of changes to the IRC, most of their taxes could be filed quickly, meaning less work, less hours and less money for the industry.
The ultimate question, VanDenburgh says, is whether CPAs will embrace the tax simplification, even if it means having a material impact on their livelihoods.
VanDenburgh completed his research on the subject alongside his colleagues James Braswell, an assistant professor of accounting, and Roger Daniels, a professor of accounting and chair of the Department of Accounting and Legal Studies at the College of Charleston School of Business.
TAXES – The Tax Magazine is one of the oldest and most well-known tax journals in the country and is a go-to publication for law firms and law libraries across the globe. The journal analyses federal, state and international tax issues.