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Accountancy Slice
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28th August 2025
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THE HOT STORY

Tax compliance costs hit $536bn, says Tax Foundation

A recent study by the Tax Foundation reveals that taxpayer compliance costs are projected to reach $536bn this year, accounting for nearly 1.8% of the gross domestic product. The report highlights that over 2.1bn hours are spent on individual tax forms, costing $146.9bn, yet this only represents less than 28% of the total compliance burden. Businesses bear a significant portion of these costs, which have increased from the previous year. Alex Muresianu, senior policy analyst at the Tax Foundation, said: "Measuring compliance costs is an ongoing task, and must be revisited when tax laws change." The study emphasizes the need for Congress to consider compliance costs before enacting new tax laws, especially with the complexities introduced by recent legislation.

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TAX

IRS CI seeks new hires

The IRS Criminal Investigation (CI) division, led by Guy Ficco, is actively hiring as it anticipates losing up to 20% of its special agents in the next two years. Despite facing a reduction of about 300 employees, or 10% of its workforce, this division has largely escaped the extensive cuts affecting other IRS sectors. According to the National Taxpayer Advocate's analysis of IRS data, the agency is taking proactive measures to maintain its investigative capabilities in criminal tax cases and financial crimes. Mr. Ficco noted: "We expect to lose up to 20% of the division's special agents over the next two years." The IRS-CI says it is committed to strengthening its team during these challenging times.

Upcoming LA events could boost tax revenue

Los Angeles is gearing up for significant economic benefits from hosting the 2026 World Cup, back-to-back Super Bowls, and the 2028 Olympics. The events are expected to generate millions in "bed tax" revenue from tourists. However, nearly 72% of Airbnb listings in Los Angeles County are operating illegally, resulting in substantial lost tax revenue amid a $1bn budget deficit. Nithya Raman, a member of the Los Angeles City Council, emphasizes the need for SB 346, which would require short-term rental platforms to share property data with city officials. This legislation aims to help cities enforce regulations against illegal rentals and collect owed taxes, ultimately funding essential services for residents. Raman said: "Illegal rental operators are defying the business practices and local laws that other businesses in our communities must follow."

INDUSTRY

CFOs rethink hiring amid accountant shortage

According to a recent survey by the Controllers Council, chief financial officers and corporate controllers are less worried about accountant shortages and are reducing their hiring plans. The survey, which included over 300 executives, revealed that 53% reported no shortages, while only 10% faced significant shortages. The most challenging roles to fill were controllers and assistant controllers, cited by 34% of respondents. Notably, 71% plan to keep their current finance and accounting (F&A) staffing levels, a rise from 64% last year. "F&A hiring trends indicate a measured approach as economic and regulatory uncertainty persists," the report stated. Additionally, hybrid work arrangements remain common, though the percentage has decreased since last year. Compensation increases were moderate, with executive staff receiving the highest average raise of 3.9%.

PCAOB launches resource group for smaller firms

The PCAOB has established a Smaller Firm Resource Group, with the aim of offering guidance on auditing standards and practices for smaller audit firms, defined as those involved in audits of 100 or fewer public companies. "Smaller audit firms play an essential role in the U.S. capital markets and in protecting investors," stated PCAOB acting chair George Botic. The initiative is part of PCAOB's broader efforts to enhance support for smaller firms, which includes workshops and resources to improve audit quality.

FIRMS

Big Four firm develops AI agent capable of completing taxes

The Australian branch of KPMG is claiming that a 100-page prompt for artificial intelligence it has written can autonomously create tax advice for clients “​​far faster than humans.” The branch developed its own bots, using models from such firms as OpenAI, Microsoft, Google, Anthropic, and Meta; it then fed them as much historical tax advice as it could, along with the Australian tax code. “It is very efficient. It does what our team used to do in about two weeks, in a day," said KPMG chief digital officer John Munnelly. "It will strip through our documents and the legislation and produce a 25-page document for a client as a first draft.”

LEGAL

ICE's data grab sparks outrage

Immigrant services organizations are challenging the government's decision to allow U.S. Immigration and Customs Enforcement (ICE) access to non-resident taxpayer information from the IRS. The groups argue that this sets a troubling precedent, saying that their members “face a Hobson's choice: comply with their tax obligations or avoid the tax system to prevent ICE from using their data in enforcement actions.” They filed a brief on August 22nd with the U.S. Court of Appeals for the DC Circuit, asserting that their members have standing to sue the government.

Authors settle with Anthropic over copyright

A group of authors has reached a settlement with artificial intelligence (AI) company Anthropic following a copyright infringement lawsuit. The proposed class settlement was confirmed in a federal appeals court filing, with terms expected to be finalised next week. Justin Nelson, the authors' lawyer, said the “historic settlement will benefit all class members.”  U.S. District Judge William Alsup of San Francisco had ruled in June that Anthropic didn't break the law by training its chatbot Claude on millions of copyrighted books, but was however scheduled to go to trial over how it acquired those books by downloading them from online “shadow libraries” of pirated copies. Alsup had said that the AI system's production of its own passages of text from thousands of written works qualified as “fair use” under U.S. copyright law because it was “quintessentially transformative.”

ESG

BlackRock rejects political fund pressure

BlackRock has sent a memo to 43 state officials, warning against politicizing public pension management. Responding to Republican claims of climate overreach and Democratic calls for more ESG action, the firm emphasised its fiduciary focus. “BlackRock is not an activist investor,” wrote government affairs head S. Jane Moffat, citing evidence that political interference harms returns. With $12.5trn under management, BlackRock has reduced support for environmental and social resolutions to just 4%.  

TECHNOLOGY

AI makes it harder for aspiring entry-level coders

According to a study by Stanford University, entry-level employment in the U.S. has dropped by 13% in fields most affected by artificial intelligence, such as software development and customer service. The research, co-authored by economist Erik Brynjolfsson and researchers at Stanford's Digital Economy Lab, highlights that while entry-level positions are declining, employment trends for experienced workers in these fields have either remained stable or improved. The study indicates that "drops in employment are most common for jobs where AI is most likely to automate human work." The findings, based on data from Automatic Data Processing Inc., suggest that the rapid adoption of AI technologies is reshaping the job market, particularly for younger workers aged 22 to 25.

CRYPTO

Trump sons’ bitcoin firm eyes Nasdaq

American Bitcoin, co-founded by Eric Trump and Donald Trump Jr., is set to go public through an all-stock merger with Gryphon Digital Mining. Backed heavily by Hut 8 - which owns 80% - the new entity will trade on Nasdaq under the ticker ABTC, with the Trumps and Hut 8 holding 98% ownership. Chief executive Asher Genoot said the merger offers better financing opportunities than a traditional IPO. Eric Trump is also seeking crypto asset deals in Asia.

INTERNATIONAL

European banks hit by rogue PayPal payments

European banks have seen widespread unauthorized direct debits from PayPal accounts, according to the German Savings Banks Association (DSGV). The German newspaper Sueddeutsche Zeitung said payments worth in the region of €10bn have had to be blocked after PayPal's fraud-checking system failed. It said payments were paused on Monday when lenders reported millions of suspicious direct debits from the payment firm. The DSGV confirmed to the BBC there had been "incidents involving unauthorized direct debits initiated by PayPal against various credit institutions."

AND FINALLY...

Stress levels soar for accountants

A recent survey by Distinct revealed that 75% of senior accountants at public accounting firms found the busy season, spanning January to April, to be "somewhat" or "extremely" stressful. In contrast, only 22% of associates reported similar stress levels. The survey highlighted that 74% of audit and tax professionals rated their work-life balance as "fair" or "poor," with seniors most affected. "This is likely growing pains of stepping into greater responsibility while still carrying a heavy workload," Distinct noted. The survey also indicated that nearly 80% of respondents worked over 51 hours weekly, with many citing unclear expectations and last-minute pressures as significant stressors. Arran Jaiswal, a director at Distinct, emphasized the need for firms to address the "mid-career slump" in recognition and support for senior and mid-level professionals to retain talent and ensure a sustainable leadership pipeline.
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