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U.S. Rep. Emilia Sykes (D-OH) introduced the “Get Your Money Back Act” on July 9th to ensure the continuation of the IRS' Direct File tax filing program. This initiative aims to make the program available to all states, countering efforts by Republicans to terminate it. Ms. Sykes highlighted the program's success, stating: “My legislation would implement this successful program nationwide, improving everyone's experience with tax season.” In the 2024 tax season, Direct File assisted around 140,000 taxpayers in claiming over $90m in refunds and saving approximately $5.6m in tax preparation fees. However, Republican opponents argue that the program is redundant and not authorized by Congress, advocating for the existing Free File program instead.

 

CPA Practice Advisor

Business Case for CAS

This Client Accounting Services Survey polled more than 1,700 business professionals to discover what they truly think of CAS. It uncovered some noteworthy results, including:  

Businesses that outsource all accounting report both hard and soft ROI, including higher profits and revenues, being better armed to make business decisions, and enjoying an easier accounting experience.

• Businesses that benefit from CAS are more likely to refer their firms.
• AP and AR present strategic client entry points for growing CAS.
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On Wednesday, President Trump expressed his approval of the IRS' recent decision allowing houses of worship to endorse political candidates without jeopardizing their tax-exempt status. "I love the fact that churches could endorse a political candidate," he stated at the White House. The ruling came in response to a lawsuit from two Texas churches and the National Religious Broadcasters, which challenged a long-standing provision in the U.S. tax code. The Justice Department, under President Joe Biden, had previously defended the law's constitutionality, arguing that Congress could restrict tax benefits for political activities. Mr. Trump, who had previously signed an executive order to ease restrictions on church political activity, remarked: "Now they're allowed to speak up. I think it's terrific."

 

U.S. News

The IRS plans to retire the Filing Information Returns Electronic (FIRE) system by tax year 2026, making the Information Returns Intake System (IRIS) the sole intake system for information returns in filing season 2027. The IRS is encouraging tax preparers to complete their IRIS applications to facilitate this transition. Monthly IRIS Working Group meetings are held on the second Wednesday, requiring registration for attendance. As stated: "Working group notifications are sent to subscribers of IRIS QuickAlerts."

 

Accounting Today

Attorney Holland King critiques the Senate's proposal to increase the semiconductor tax credit from 25% to 30%, stating it benefits existing projects but may not stimulate new investments. The change applies to facilities placed in service after December 31st 2023, but the credit will still expire at the end of 2026. King emphasizes that "the lifecycle of any new industrial manufacturing project is measured in years, not months," indicating that the tight timeline may hinder new developments. While the increased credit could save millions for ongoing projects, it does not extend the credit's life, limiting its effectiveness for future investments. King suggests that a more reliable policy is needed to foster domestic semiconductor capabilities.

 

Bloomberg Tax

CohnReznick has announced a strategic merger with PIASCIK & Associates, a tax firm based in Richmond, Virginia. This combination aims to enhance CohnReznick's private client services and international tax practices. The merger also extends CohnReznick's presence in the mid-Atlantic region, adding Richmond to its existing locations in Washington, Baltimore, Charlotte, and South Florida. The PIASCIK team officially became part of CohnReznick on July 1. As stated in the announcement, this move will "bolster CohnReznick's private clients services and international tax practices."

 

Bloomberg Tax

Only "a couple" of officials at the Federal Reserve's June 17th-18th meeting said they felt interest rates could be reduced as soon as this month, according to minutes published on Wednesday. Officials who believed lower rates would be appropriate later this year thought those moves could be justified by a weaker labor market or more modest and temporary inflation pressures from tariffs, according to the minutes, released Wednesday with a customary three-week lag. There was no indication that any policymaker felt the U.S. central bank's benchmark overnight rate, currently in the 4.25%-4.50% range, should be cut by several percentage points, as President Trump has advocated for. Fed policymakers also were split on how they see underlying demand, with "several" pointing to solid consumer spending and "several" others pointing to signs of softening. Several policymakers also noted that lower-income households were switching to lower-cost items and could be disproportionately affected by tariff-related price increases.

 

American Banker

Reuters

Wall Street Journal

The Commerce Department's Census Bureau reported Wednesday that U.S. wholesale sales for May declined 0.3% from April, to $697.2bn. On an annual basis, they were 4.8% higher. Inventories were also down 0.3%, and totaled $905.5bn. Sales of durable goods crept up by 0.2% during the month, while sales of non-durable goods declined by 0.8%. The inventory to sales ratio was unchanged from April, at 1.3.

 

ForexLive

Investing

RTT News

Bloomberg reports that Claire's Stores is considering a potential bankruptcy for its U.S. operations, as it struggles with weak demand, higher import costs and a heavy debt burden. Houlihan Lokey Inc. has been working with the retailer to shore up its finances while also exploring a potential sale of all or part of its operations, which includes store networks in North America and Europe. The retailer has a roughly $477m term loan due in December 2026, and recently chose to defer interest payments on its debt as a way to conserve cash.

 

Bloomberg

Stenson Tamaddon LLC has appealed its unsuccessful challenge against the IRS's guidance on employee retention credit (ERC) claims, asserting that the agency has unlawfully limited access to pandemic-era relief for businesses. Initially, StenTam sued the IRS over a nationwide moratorium on processing new ERC claims, which the agency implemented to prevent fraud. Although StenTam dropped the lawsuit after the moratorium was lifted, it continues to contest the IRS's criteria for denying certain businesses their claimed credits. As stated by StenTam: "The agency unlawfully restricted the availability of the pandemic-era relief." The outcome of this appeal could significantly impact businesses seeking ERC.

 

Bloomberg Tax

A joint report by AICPA and Chartered Professional Accountants Canada highlights the growing role of accounting professionals in providing assurance for artificial intelligence (AI) systems. The report emphasizes that as AI technology proliferates across industries, the demand for transparency and accountability increases. "As the demand for transparency and accountability for AI systems grows, it is anticipated that more CPA firms will expand their assurance service offerings to include AI," the report states. However, challenges such as the lack of suitable criteria for assurance engagements and the evolving nature of AI systems complicate the process. The report suggests that CPAs should enhance their education in AI and collaborate with experts to shape governance and assurance standards, ensuring they remain integral to the evolving landscape of AI assurance.

 

Accounting Today

African nations are evolving their taxation frameworks for mining, focusing on critical raw materials essential for the energy transition. Anthony Assassa, a tax adviser, highlights that emerging economies are projected to account for 65% of global economic growth by 2035. Africa, rich in mineral reserves, faces challenges like tax evasion and a large informal economy, leading to an annual loss of $88.6bn due to illicit financial flows. The article emphasizes the need for a taxation model that supports local processing and infrastructure development. Assassa notes, "Export resource taxes could have a triple win effect," enhancing government revenue while promoting sustainability. Solutions include improved tax compliance through digital tools and regional cooperation initiatives.

 

Bloomberg Tax

Carlo Ancelotti, the Brazil national soccer coach, has been sentenced to one year in prison for tax fraud during his time as Real Madrid manager in 2014. The Madrid court also imposed a fine of €386,000 ($452,187) on him. Prosecutors accused Mr. Ancelotti of defrauding the state of €1m ($1m) in 2014 and 2015, alleging he used shell companies to conceal his earnings, including one based in the Virgin Islands that lacked any real economic activity. Carlos Sánchez, Ancelotti's press officer, stated that the coach “will not make comments for now.” This case is part of a broader crackdown by Spanish authorities on tax evasion among high-profile soccer figures, including Lionel Messi and Cristiano Ronaldo. 

 

US News and World Report