As legislators on Capitol Hill reconvene after their summer breaks, the members of the Jewelers of America Political Action Committee, or JAPAC, are hoping a recent trip to Washington, D.C., will help resolve some key issues before year’s end. Chief among them: the Last-In-First-Out (LIFO) method of accounting and sales tax fairness.

JAPAC members made their maiden voyage to the nation’s capital in June to meet with legislators. At the time, they were told that LIFO—the accounting method allowing business owners to record the sale of their high-value inventory first, so as to reduce tax liabilities—was safe from being repealed.

Jewelers use LIFO because ­jewelry is a low-turnover product, which makes them particularly vulnerable to inflation and fluctuating commodity prices. In practical terms, a product sold today was purchased at a much lower cost than the cost to replace that product in today’s marketplace. Without LIFO, a jeweler’s taxable income increases after the sale of a product. LIFO helps businesses in the jewelry industry maximize after-tax cash flow. As gold and diamond prices continue on their upward trajectories, jewelers rely on LIFO more than ever.

But as deficit issues rage on, the $72 billion in revenue LIFO promises to generate over a 10-year period if repealed makes it an attractive target for legislators. (Although LIFO repeal was placed on the negotiating table by the Obama administration, it was not included in the two main debt- and deficit-reduction plans under consideration at press time.)

“This is the nature of politics,” says Scot Congress, owner of Congress Jewelers in Sanibel Island, Fla., and a member of the D.C. delegation. “Things change quickly: One week LIFO is off the table, and the next it’s back on.”

As legal counsel for JA, Tim Haake, founder and principal of Haake & Associates, believes “LIFO will continue to come under scrutiny as a revenue source as discussions continue on ways to deal with comprehensive tax and entitlement spending reforms.”

JAPAC members will continue to argue against LIFO’s repeal. JAPAC head Bill Farmer, owner of Farmer Jewelers in Lexington, Ky., also part of the June delegation, says he’s confident they’re building support on Capitol Hill.

June’s trip to D.C. helped solidify relationships with at least 18 members of various committees, including the tax-writing groups within the House Ways and Means and Senate Finance committees, as well as legislators from JAPAC-member states. “Our goal next year is to reach 50 legislators by the end of 2012,” Congress says.

Reaching that target will help JAPAC address domestic and international issues. Even if LIFO survives the debt ceiling talk, a larger issue looms: The American Institute of Certified Public Accountants (AICPA) is proposing a worldwide standardization of accounting principles and methods as part of its planned International Financial Reporting Standards (IFRS).

If IFRS becomes the global accounting standard, American companies with overseas vendors, suppliers, and even customers will be subject to IFRS guidelines—under which LIFO is not allowed. To head off that potentiality, JA belongs to the LIFO Coalition, a group dedicated to preserving LIFO.