AICPA Submits Recommendations to Senate Finance Committee on Reconciliation Bill
Washington, D.C. (June 24, 2025) – The American Institute of CPAs (AICPA) has expressed concerns with proposals pertaining to the pass-through entity tax (PTET) state and local tax (SALT) deductions in reconciliation bills introduced in the Senate and passed House of Representatives. In a recent press release, the AICPA outlined several provisions in the Senate bill it has previously endorsed, as well as analysis of several other provisions, including the PTET SALT deduction. This week, the AICPA submitted a letter to Senate Finance Committee leadership which included its endorsements, its concerns regarding the PTET SALT deduction, its request for clarification of the SALT proposal and two other recommendations.
The additional recommendations include:
The AICPA expressed concern over the excess business loss (EBL) rule in the Senate Finance Committee’s reconciliation bill, which would effectively provide for a permanent disallowance of any business losses in certain circumstances. Even though the bill included a provision to allow carryforwards of EBLs from an estate or trust to beneficiaries thereof, the underlying problem remains in that the beneficiaries may not have business income to use the losses and, therefore, the unusable losses may carry forward indefinitely.
The AICPA also recommended restoration of the casualty loss deduction to all taxpayers, rather than limiting it to taxpayers that have suffered casualty losses from federally or state declared disasters. The Senate version of the reconciliation bill would make the limitation permanent, which means that a taxpayer whose residence is burned down in a federally declared wildfire may claim a casualty loss, while a taxpayer whose residence is destroyed by a fallen tree in a local storm has no tax relief. Ultimately, this permanent limitation would ensure that similarly situated taxpayers are not treated similarly, and this should not be the case.
“The AICPA continues to express deep concern about the disparity in tax treatment that the Senate SALT proposal would create among pass-through entities and corporations, while also seeking clarity on the Senate’s proposal. However, we continue to advocate on behalf of the accounting profession on many other issues as well,” said AICPA Vice President of Tax Policy & Advocacy, Melanie Lauridsen. “These additional recommendations – while less impactful than the PTET SALT deduction – are consequential to the tax system and taxpayers. We ask the members of the Senate Finance Committee to thoughtfully consider our recommendations.”
About the American Institute of CPAs
The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with 397,000 members and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education, and consulting. A founding member of the Association of International Certified Professional Accountants, the AICPA sets ethical standards for the profession, attestation standards, and U.S. auditing standards for private companies, not-for-profit organizations, and federal, state, and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, partners across the profession to build future talent, and drives continuing education to advance the vitality, relevance, and quality of the profession.
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BACKGROUND:
June 18, 2025 – AICPA issued a press release expressing appreciation to Senate for efforts to “improve and correct” House bill
June 12, 2025 – AICPA & State CPA Societies raise concerns over PTET SALT deduction elimination in letter to Senate Finance Committee
May 29, 2025 – AICPA Letter to Senate on the One Big Beautiful Bill Act
May 20, 2025 – AICPA comment letter: AICPA Leadership Letter on PTET Deduction
March 3, 2025 – AICPA comment letter: Permanent, Consistent, and Clear Disaster Relief Tax Legislation
February 13, 2025 – AICPA comment letter: AICPA Recommendation to Amend Qualified Business Income Deduction
June 6, 2023 – AICPA comment letter: S. 1761, the Red Tape Reduction Act
April 11, 2023 – AICPA comment letter: Freedom to Invest in Tomorrow’s Workforce Act (H.R. 1477)
December 8, 2017 – AICPA comment letter: Conference of the House and Senate-passed versions of the Tax Cuts and Jobs Act
November 13, 2017 – AICPA comment letter Tax Cuts and Jobs Act
Contact: Veronica L. Vera
202-434-9215
Veronica.Vera@aicpa-cima.com