A National Law Journal story, "Law Firms Wary of Tax Provision," reports that parallel tax reform packages being drafted by Michigan Congressman Dave Camp, chair of the House Ways and Means Committee, and Montana Senator Max Baucus, chair of the Senate Finance committee, would change the way professional service firms pay taxes in a way that could tag law firm partners with major upfront tax costs. The draft legislation would require an accrual method rather than cash method accounting for firms with gross receipts of greater than $10 million. The national assurance leader for PricewaterhouseCoopers' law firm services practice told National Law Journal:
Firms should not be sitting back waiting to see if and when this goes through. They should be setting up work streams to model it out and think about how it's going to impact their organization, and make sure there are no negative consequences.
Acknowledging the inherent uncertainty surrounding such major reform, the ABA's government affairs director nonetheless pointed out that the potential revenue boost that the change provides the government makes it "very tempting to use this regardless of the public policy implications."
