MANHATTAN, KAN. – Today, U.S. Senator Jerry Moran (R-Kan.), along with a bipartisan group of 13 Senators, expressed concern to U.S. Department of the Treasury Secretary Jack Lew about recent proposals that would repeal the accounting method of “last-in, first-out” (LIFO), which is used by many American businesses.

In the letter, the Senators argue that a repeal of LIFO could create undue burdens for American businesses and would run counter to the goal of a simple and efficient tax code that allows businesses to compete.

The Senators wrote, “LIFO is a widely accepted inventory accounting method, and has been recognized in the U.S. tax code for more than 70 years. By allowing businesses to qualify their inventory under the LIFO standards, businesses report a fair tax liability that is both realistic and unoppressive to growth.

“…If this reform is passed, the penalty to the businesses that used LIFO could extend decades into the past, forcing companies to pay off the “reserve” to which they had legally been entitled. This retroactive tax would place undue burden on companies that abided by an accepted standard… At worst, repeal could force cuts to employment or drive companies out of business altogether.”

Many American manufacturers, retailers, distributors and small businesses rely on LIFO. A LIFO repeal could result in retroactive tax increases for many of these companies – costs that could ultimately be passed on to employees and consumers, hindering future growth and job creation.