TBA Law Blog

Posted by: Brittany Sims on Apr 8, 2015

American Bar Association President William C. Hubbard is urging legislative leaders to reject any proposals that would require many law firms and other personal service businesses to switch from the simple cash method of accounting to the more complex and costly accrual method. Hubbard sent letters to the leaders of the Senate Finance Committee and the House Ways and Means Committee as they explore ways to simplify the tax code. During a meeting with invited stakeholders, the ABA said the change could cause substantial financial hardship to many lawyers, law firms, and other personal service businesses by forcing them to pay tax on “phantom” income they have not yet received and may never receive.