The nation’s biggest CPA group has some questions and suggestions for the Trump administration on new tax legislation going into effect this year.
Among the most notable recommendations is a call for automatic enrollment of eligible children into the new “Trump accounts” program and accompanying pilot. Such accounts, established as part of the wider tax law known as the One Big Beautiful Bill Act, are tax-deferred individual retirement accounts open to U.S. citizen children, and the pilot program includes a $1,000 one-time deposit into them from the federal government. The pilot is open to U.S. citizens born between Jan. 1, 2025, and Dec. 31, 2028.
Currently, an “authorized individual” — which can be a legal guardian, parent, adult sibling or grandparent of the eligible individual — needs to choose to establish an account on behalf of an eligible child, but the American Institute of CPAs suggests that the Treasury and the IRS should automatically enroll all eligible children into the program and pilot. Such a move, the AICPA said in a Feb. 25 letter to the IRS, would “promote fairness and ease administrative burden.”
The group also suggested leaving open an option for individuals to opt out of the program if they so choose.
“Automatic enrollment would promote equitable access to the program, as absent this approach some taxpayers may be unaware of the program and may inadvertently fail to make an election to open an account or fail to elect into the federal pilot program on behalf of an eligible child,” AICPA officials wrote in the letter. “Automatic enrollment with an option for authorized individuals to opt out would encourage maximum participation and access to the program, preventing it from being limited to those with specialized knowledge of these new provisions.”
AICPA went on to suggest the Social Security Administration could help coordinate enrollment, since that agency “already administers Social Security numbers for eligible individuals at birth.”
The AICPA’s comments come at a time when many Americans are already opting to pare back on their retirement savings. The general public’s financial literacy and appetite for saving hold relevance for finance chiefs and teams administering employer-led benefits.
The group’s suggestion on Trump accounts came as part of a wider set of recommendations and questions the AICPA submitted to IRS Estate and Gift Tax Attorney-Adviser Catherine Veihmeyer Hughes.
The CPA group also asked for “immediate guidance on income tax reporting for individuals, estates, and trusts,” including a new limitation on itemized deductions.
The AICPA noted the law created a new “35% cap, rather than 37%, on the tax benefit of itemized deductions for taxpayers in the highest income tax bracket.”
The group said the law “achieves this result by requiring taxpayers to reduce their otherwise allowable itemized deductions by 2/37ths of the lesser of: (i) the taxpayer’s itemized deductions, or (ii) the amount of taxable income increased by itemized deductions as exceeds the dollar amount at which the 37% rate bracket begins with respect to the taxpayer.”
“While the mechanics appear straightforward, further guidance is necessary to determine whether the LID is intended to operate in certain scenarios,” AICPA wrote.
The institute said that “Treasury and the IRS should issue guidance clarifying that the section 68 limitation applies only to non-preferential rate income exceeding the threshold at which the 37% tax rate bracket begins.”
In a separate written statement, AICPA Director of Tax Policy and Advocacy Eileen Sherr said that a “lack of detailed guidance” on various provisions in the law “creates uncertainty as well as operational and compliance challenges.”
