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The accounting profession is on the brink of a significant transformation as it enters 2026, driven by advancements in artificial intelligence (AI). Randy Johnston highlights that AI is evolving from a supportive role to one that actively manages workflows, with platforms like Thomson Reuters and Wolters Kluwer leading the charge. "The best firms will run AI-enabled workflows," Johnston notes, emphasizing the need for firms to adapt to this shift. The emergence of the "digital senior," professionals who blend accounting expertise with AI oversight, is crucial for success. As firms streamline their technology and focus on cohesive systems, the demand for measurable productivity gains will rise. The article outlines key trends, including the operationalization of AI in tax and audit processes, and stresses the importance of training and governance in this new landscape. Firms that embrace these changes will find opportunities for growth and improved client satisfaction.

 

CPA Practice Advisor

The recent Conference on Current SEC and PCAOB Developments highlighted significant improvements in audit quality in the U.S. over the past two decades, as noted by SEC Chief Accountant Kurt Hohl. He emphasized the need for vigilance in maintaining this quality amidst evolving business landscapes, including AI and private equity influences. SEC Chairman Paul Atkins anticipates a busy agenda for 2026, focusing on corporate disclosure and governance reforms, following delays caused by the government shutdown. The SEC is also expected to enhance its approach to PCAOB inspections, shifting towards a quality management system. Additionally, crypto regulation will be a priority, with the AICPA providing updated guidelines for digital assets. Susan S. Coffey, CPA, CGMA, CEO of Public Accounting at the Association of International Certified Professional Accountants, underscores the importance of these developments for the profession.

 

Journal of Accountancy

The impact of private equity (PE) on the accounting profession remains uncertain, with opinions divided among partners and staff at PE-backed firms. According to Accounting Today's "State of PE in Accounting 2025" survey, while some respondents report positive changes such as increased engagement and financial rigor, others describe a toxic culture and low morale. A partner noted: "It has changed for the better," highlighting improvements in culture and accountability. Conversely, a director lamented: "It is a dumpster fire," citing issues like staff turnover and reduced bonuses. Approximately one-fifth of respondents reported no significant changes, indicating a complex landscape as PE continues to influence the industry.

 

Accounting Today

The IRS has initiated a 90-day public comment period, ending March 22, 2026, to gather feedback on proposed updates to its Voluntary Disclosure Practice (VDP). These updates aim to streamline the penalty framework and enhance compliance incentives for noncompliant taxpayers. The IRS stated: "The proposed revisions reflect the agency's commitment to improve its processes." Key changes include a requirement for taxpayers to file amended returns and pay all taxes within three months of conditional approval. The new penalty structure aims to be clear and consistent, with specific penalties for delinquent and amended returns. Taxpayers must electronically submit Form 14457 to initiate the process, and the IRS may rescind approval for noncompliance.

 

Bloomberg Tax

CPA Practice Advisor

Tax practitioners must brace for significant changes in IRS collection efforts starting in 2026. Despite recent personnel cuts and a government shutdown, the IRS remains focused on enhancing its collection capabilities through advanced analytics and artificial intelligence, while audits are expected to decline. A key development is the Supreme Court's ruling in Zuch v. Commissioner, which limits taxpayers' rights to contest liabilities during the collection process. Treasury Secretary Scott Bessent emphasized that the IRS will prioritize collection work and improve IT capabilities. As the IRS increasingly automates its processes, practitioners need to adapt to a new landscape where collection notices may proliferate without traditional deficiency procedures.

 

Bloomberg Tax

A bipartisan effort led by Representatives Max Miller and Steven Horsford is crafting a cryptocurrency tax framework aimed at providing clarity for stablecoin transactions and delaying taxation on rewards from blockchain verification. The draft proposes exempting transactions of regulated stablecoins maintaining a value between $0.99 and $1.01 from capital gains tax, limited to transactions under $200. Miller stated: “America's tax code has failed to keep pace with modern financial technology,” emphasizing the need for fairness in digital asset taxation. The proposal also seeks to allow taxpayers to defer tax on rewards for five years, aligning cryptocurrency taxation with traditional securities. This initiative is part of ongoing discussions in the House Ways and Means Committee to establish comprehensive cryptocurrency regulations.

 

CPA Practice Advisor

Oregon workers who earned overtime pay this year will benefit from a new state income tax break, mirroring the federal overtime tax exemption in President Donald Trump's “One Big Beautiful Bill Act.” However, the eligibility for this deduction remains uncertain due to various worker exemptions. The deduction allows eligible employees to deduct up to $12,500 of overtime pay from their federal taxable income, which will also lower their state income tax bills. Despite the potential benefits, critics argue that only a small percentage of workers will qualify, and the deduction may disproportionately favor higher-income earners. The overtime tax break is projected to cost Oregon about $93m in lost tax revenue for the 2025 tax year, amidst a $63m budget deficit. Lawmakers will address this issue in the upcoming legislative session starting February 2.

 

OregonLive.com

New York City is confronting a significant budget gap of $10bn for the upcoming fiscal year, as highlighted in a new report by state Comptroller Thomas DiNapoli. The city has depended on robust tax collections to support essential services, but DiNapoli warns that the “revenue trend may be coming to a close.” He further said: “If the city faces even a mild recession, it is unlikely tax revenues alone would be able to close budget gaps.”

 

Bloomberg Tax

The U.S. economy likely grew 3.3% in Q3, fueled by consumer spending and AI-driven business investment, though momentum is fading amid high living costs and the recent government shutdown. Consumer activity was boosted by early EV purchases before tax credits expired and increased service spending by higher-income households. Meanwhile, lower-income groups face affordability issues. Inflation likely rose to 2.8%, and growth was supported by a narrower trade deficit. Economist Brian Bethune warned: “That is not going to be sustained in the fourth quarter.”

 

U.S. News

Reuters

This holiday season highlights America's wealth divide, with affluent shoppers flocking to Ralph Lauren while others seek bargains at Ralphs grocery. The K-shaped economy reveals high-income households benefiting from rising wages and asset values, while lower-income families face inflation and stagnant earnings. Ralph Lauren's stock surged over 35% in six months, contrasting with Kroger's decline of over 10%. Kevin Klowden of the Milken Institute noted that lower-income consumers are tightening their spending, while higher-income groups continue to drive sales. "People in lower incomes are becoming more and more conservative in their spending patterns," he said.

 

Los Angeles Times

The U.S. Consumer Financial Protection Bureau (CFPB) has said that popular "earned wage" advances on worker paychecks do not resemble consumer loans. The advisory opinion from the consumer finance agency reverses course on guidance it published last year under then President Joe Biden. The CFPB said most paycheck advances were not subject to the Truth in Lending Act. This means that the growing number of companies that offer the products are not required to provide workers with certain disclosures, including the cost and terms of credit.

 

Bloomberg Law

American Banker

Reuters