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The House Ways and Means Committee held a hearing on Tuesday to discuss the so-called "One Big Beautiful Bill," which aims to extend provisions from the Tax Cuts and Jobs Act while introducing new tax breaks for various income types. Committee chair Jason Smith (R-MO) emphasized that the bill fulfills President Donald Trump's promise of "historic tax relief to working families." However, Democrats, led by Ranking Member Richard Neal (D-MA), criticized the bill for potentially worsening inequality and increasing the deficit. Key provisions include making certain tax cuts permanent, increasing the state and local tax deduction cap, and eliminating taxes on tips and overtime pay. The bill is expected to undergo changes in the Senate, with Mark Baran from CBIZ noting: "Congress is finally able to pass a concurrent resolution to unlock the budget reconciliation process." The bill also proposes significant alterations to renewable energy tax credits and the IRS' tax filing programs.

 

Accounting Today

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U.S. energy industry trade groups are intensifying lobbying efforts to protect clean energy tax credits from cuts proposed in the Republican budget plan. The House Ways and Means Committee has suggested phasing out several subsidies linked to wind, solar, and hydrogen technologies under the Inflation Reduction Act. Heather O'Neill, chief executive of Advanced Energy United, said: "Without these credits, American families will be worse off." The group has launched a national ad campaign targeting lawmakers in key states, emphasizing the economic benefits of these investments. Meanwhile, hydrogen industry lobbyists are advocating for the preservation of the federal 45V tax credit, which they claim could support 60,000 jobs annually and contribute over $12bn to GDP.

 

U.S. News

Jennifer Keegan and Ginger Powell from Plante Moran discuss the IRS' evolving approach to auditing the R&D tax credit, which has gained significance due to recent changes in expensing rules. The IRS has intensified scrutiny, leading to more structured audits that require extensive documentation. Despite workforce cuts, R&D audits continue, presenting challenges such as rigid structures and burdensome documentation requests. They emphasize that "Advance preparation is the key to success in an R&D audit," suggesting businesses document their research activities and involve experts early to navigate the complexities of audits effectively. By adopting strong practices, taxpayers can enhance their chances of a favorable audit outcome.

 

Bloomberg Tax

Los Angeles is defending its mansion tax on properties sold for over $5m, asserting that it was authorized by voters and local law. The city argues that the property owners and taxpayers' support group challenging the tax misinterprets the city charter, which does not restrict voters' powers regarding such measures.

 

Bloomberg Tax

The Federal Accounting Standards Advisory Board (FASAB) is soliciting input on emerging accounting issues related to federal agency reorganizations and abolishments, particularly in light of significant layoffs and agency eliminations led by the Department of Government Efficiency. "Federal agencies and their functions, from time to time, have been reorganized and abolished," FASAB stated in its request for information. The board aims to gather practitioner responses to identify and address accounting challenges arising from these changes, including asset and liability transfers among federal entities. FASAB has posed several questions regarding the impact of recent reorganizations on reporting entities and the accounting issues encountered. Responses are due by July 15th 2025.

 

Accounting Today

The IRS has announced the opening of the application period for Low Income Taxpayer Clinic (LITC) matching grants for the 2026 grant year, allowing eligible organizations to request up to $200,000. Applications will be accepted from May 15th to July 14th 2025, with the grant period running from January 1st to December 31st, 2026. Erin Collins, National Taxpayer Advocate, emphasized that LITCs play a crucial role in ensuring fairness in the tax system by providing pro bono representation and education to low-income taxpayers. Despite the IRS' efforts, several states remain underserved, including Hawaii, Kansas, Montana, and West Virginia. The IRS is particularly interested in applications from organizations serving these areas, stating, "priority will be given to established organizations that can help provide coverage to underserved geographic areas." For more details, refer to IRS Publication 3319.

 

CPA Practice Advisor

In April, U.S. consumer prices rose by 2.3% year-over-year, marking the smallest annual increase in over four years. On a monthly basis, costs rose 0.2% after dipping 0.1% in March. The Labor Department's report revealed that grocery prices fell by 0.4%, largely due to a significant 12.7% drop in egg prices, which are still 49.3% higher than last year. Despite a 0.2% increase in prices from March to April, driven mainly by housing costs, inflation remains relatively contained. Analysts caution that the ongoing trade war may lead to higher retail prices in the future, as seen with a 1.5% rise in furniture costs. "Core" inflation, excluding food and energy, remained steady at 2.8%.

 

Des Moines Register

Los Angeles Times

NPR

Wall Street Journal

Senate Finance Committee Democrats are pressing for clarity regarding IRS commissioner nominee Billy Long and potential ties to White River Energy Corp., which has been marketing sovereign tribal tax credits. Sen. Ron Wyden (D-OR), the committee's ranking member, and Sen. Catherine Cortez Masto (D-NV) have raised concerns about the legitimacy of these credits, which the Treasury Department and IRS have deemed nonexistent. In a letter to White River Energy, they wrote: "We are demanding to know whether there is a deal in place." The lawmakers previously called for a criminal investigation into firms involved in similar activities.

 

Bloomberg Tax

Tax Notes

The U.S. Consumer Financial Protection Bureau (CFPB) is proposing to eliminate a registry that tracks nonbank corporate offenders, which was established under the Biden administration to monitor companies violating consumer laws. Acting Director Russell Vought expressed concerns that the compliance costs for businesses may outweigh the "speculative and unquantified benefits" of the registry. The CFPB is currently seeking public feedback on this proposed cancellation, marking a significant shift in the agency's approach under the Trump administration.

 

Reuters

The Supreme Court is on Thursday set to hear arguments on President Donald Trump’s January 2025 executive order on birthright citizenship. The order stated that children born in the U.S. to parents who are not in the country legally, or who are not permanent residents, cannot receive citizenship. The hearing at the top court comes after federal judges in Maryland, Massachusetts and Washington banned the order from going into effect, ruling that the president cannot change or limit the Constitution by executive order. The Trump administration argues that courts previously did not interpret the 14th Amendment’s citizenship clause correctly. 

 

The Conversation

A statement from the Bank for International Settlements (BIS) revealed on Monday that global banking regulators are intensifying their focus on the financial risks posed by climate change, despite pushback from the United States. The Basel Committee on Banking Supervision has agreed to publish a voluntary disclosure framework for climate-related financial risks, aiming to influence national rulemaking. While European regulators, particularly the European Central Bank, are prioritizing climate risk management, the U.S. has scaled back its efforts.

 

Reuters

U.S. small-business confidence fell for a fourth straight month in April, the National Federation of Independent Business (NFIB) said on Tuesday, with the share of owners reporting job openings declining to the lowest level in more than four years. The business group's Small Business Optimism Index dropped 1.6 points to 95.8, the second straight month of a reading below the 51-year average of 98. The NFIB's Uncertainty Index eased 4 points to 92 last month. Additionally, 34% of small business owners reported job openings they could not fill, down 6 points from March. The share of small business owners expecting better business conditions fell 6 points to 15%. "This component, along with unfilled job openings, contributed the greatest to the Optimism Index's decline," said NFIB Chief Economist Bill Dunkelberg.

 

The Hill

Bloomberg

Reuters

Prime Minister Shehbaz Sharif has prioritized expanding Pakistan's tax base as part of the country's $7bn loan program with the International Monetary Fund (IMF). During a recent meeting, he said: “Expanding the tax net is the government's top priority,” as he emphasized the need for action against tax evaders and their enablers. The government aims to increase the tax-to-GDP ratio from 8.8% in the 2023-24 fiscal year to 10.6% by June 2025, with a long-term goal of 13%. Measures such as digitizing tax monitoring systems and implementing track-and-trace technology in key industries have already shown positive results, including a 35% rise in tax receipts from the sugar sector. Sharif concluded: “By the grace of God, the national economy is stabilizing and progressing.”

 

Arab News

The proposed U.K. reforms targeting tax advisers could lead to increased costs and economic harm, according to leading accounting organizations. The Association of Chartered Certified Accountants and the Institute of Chartered Accountants in England and Wales expressed concerns that the draft reforms from His Majesty's Revenue and Customs are overly broad and impose unnecessary burdens.

 

Bloomberg Tax