Testimony of William Stevenson. on Reducing the Tax Burden: Modifications to Capital Gains Law before the Committee on Ways and Means, U.S. House of Representatives, February 12, 1998

The National Public Accountant, May 1998 | Go to article overview

Testimony of William Stevenson. on Reducing the Tax Burden: Modifications to Capital Gains Law before the Committee on Ways and Means, U.S. House of Representatives, February 12, 1998


The National Society of Accountants (NSA) is pleased to testify on the issue of reducing the federal tax burden. NSA commends Chair Archer and the other members of the Committee on Ways and Means for holding this most important hearing on proposals designed to eliminate complexities or perceived inequities in the Internal Revenue Code.

My name is William Stevenson, and I am testifying today in my capacity as Chair of the National Society's Federal Taxation Committee. I have been an Enrolled Agent for many years and have served on the Commissioner of Internal Revenue's Advisory Group. I am President of National Tax Consultants, Inc., a firm that concentrates on taxpayer representation before the United States Tax Court, and also am President of Financial Services of Long Island, a mutifaceted tax preparation and accounting firm that services individuals and small businesses on Long Island, in Merrick, New York.

NSA is an individual membership organization. Through our national organization and affiliates in 54 jurisdictions, we represent the interests of approximately 30,000 practicing accountants. Our members are for the most part either sole practitioners or partners in moderate-sized accounting firms who provide accounting, tax return preparation, representation before the Internal Revenue Service, tax planning, financial planning, and managerial advisory services to over six million individual and small business clients. The members of NSA are pledged to a strict code of professional ethics and rules of professional conduct.

The National Society's comments today will focus on the complexity of the 18-month holding period for the new 10 and 20% capital gains rates, and proposals for an exclusion for interest and dividend income.

Capital Gains

The National Society strongly supports the proposition that a low capital gains rate is critical to spurring capital formation and prosperity for the American work force. However, the mind-boggling complexity in the new capital gains rates and reporting should be eliminated. In particular, NSA endorses elimination of the 18-month holding period involved with the new maximum 20% capital gains rate. Instead, we recommend that the top 20% capital gains rate become effective for capital assets held for one year or more.

The technical impediments imbedded in the Internal Revenue Code create the complexity which makes it difficult for individual taxpayers to comply with the law and for the Internal Revenue Service to administer it. We believe the current 18-month holding period for capital gains, enacted as part of the Taxpayer Relief Act of 1997, is an excellent example of needless complexity.

According to IRS statistics, approximately 50% of all federal tax returns are prepared by tax professionals. The August 13, 1997 issue of Money Daily states the capital gains measure of the 1997 law is likely to spur even more individuals to take their tax reporting obligations to professionals for assistance. Indeed, one tax professional quoted by Money Daily called the 1997 law the "Tax Preparation Industry Full Employment Act."

The National Society of Accountants supports the reduction in the top capital gains rate to 20 percent. However, in order to qualify for the 20% rate under the 1997 tax law, an individual must now hold his or her capital asset for 18 months or longer. Assets held for more than a year, but for less than 18 months, will be taxed under the new tax act at a maximum capital gains rate of 28 percent. The Schedule D (Capital Gains and Losses) for the 1996 Form 1040 contained 19 lines on the schedule, accompanied by a 13 line worksheet in the instruction book. The instructions for the form were three pages. Due to the capital gains provisions of the 1997 tax act, the Schedule D for the 1997 individual tax return contains 54 lines. The instructions for the form have increased to four pages. This reflects complexity, complexity the National Society considers to be needless.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Testimony of William Stevenson. on Reducing the Tax Burden: Modifications to Capital Gains Law before the Committee on Ways and Means, U.S. House of Representatives, February 12, 1998
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.