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6th February 2026
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THE HOT STORY

AICPA proposes updates to attestation standards

AICPA's Auditing Standards Board (ASB) is set to propose updates to its attestation standards, focusing on sustainability and emerging assurance issues. An exposure draft will be available online on February 26th, with a comment period expected to last at least 120 days. The updates aim to address new areas of assurance beyond traditional auditing, including sustainability, digital assets, and cybersecurity. AICPA anticipates that the revised standards will be adopted next year after the comment period and further deliberation by the ASB. The exposure draft will be accessible on the AICPA's resource page for proposed standards by the end of the month.

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TAX

New federal school-choice tax credit sparks battle over state control

A new federal tax credit will direct more than $3bn a year to scholarships, mainly for private and parochial schools, prompting a fight over who controls the program. Public-school advocates want states to set rules and safeguards, while school-choice supporters argue state oversight should be minimal. As the Treasury Department writes regulations, the program marks a shift in federal education policy, with its impact depending on how much authority states are given. 

IRS offers clarity on digital taxes

Implementing digital taxes presents challenges as authorities grapple with determining taxpayer location for nexus. The IRS's Notice 2023-55 allows taxpayers to utilize prior regulations for foreign tax credit rules, which can mitigate potential impacts. John Rose, tax director at Aprio, emphasizes the importance of understanding the interplay between final regulations and IRS Notice 2023-55, especially as AI development complicates nexus rules. Taxpayers are advised to document activities meticulously and assess exposure to digital taxes based on customer location. Proactive strategies are essential to avoid losing foreign tax credits, which can be critical in an AI-driven economy. "Monitoring billing practices, platform access points, and IP characterization are essential," Rose notes.

Expanding childcare tax credits in Wisconsin

In Wisconsin, two bills approved by the Legislature's Joint Finance Committee aim to enhance tax credits for businesses providing childcare to employees. The first bill, supported solely by Republicans, expands qualifying childcare expenses eligible for a refundable business development tax credit from the Wisconsin Economic Development Corporation. Currently, businesses can receive a credit for up to 15% of capital expenses, but the new legislation broadens this to include costs like employee childcare reimbursements and purchasing childcare slots. "Right now, that tax credit is very limited for employers. Consequently, it is being underutilized," stated Sen. Howard Marklein. The second bill, which passed unanimously, aligns with federal policies to offer a nonrefundable tax credit for businesses operating or partnering with childcare facilities. These initiatives follow a bipartisan effort to improve childcare access, with the recent state budget allocating over $300m to childcare programs.

ECONOMY

Jobless claims jump, but weather distortions mask steady labor market

The Labor Department reported on Thursday that new jobless claims rose more than expected last week, an increase attributed to distortions from snowstorms across much of the country. The number of initial filings rose to 231,000 in the seven days to January 31st, up from 209,000 a week earlier, and above the 212,000 expected among economists polled by Reuters. The four-week moving average of new applications, which helps smooth out the volatility in the data that is typical during weather events, rose to 212,250, while continuing claims, reported with a one-week lag, increased from 1.82m to 1.84m. Relatedly, the Labor Department's JOLTS report stated that job openings had decreased by 386,000 to 6.542m by the last day of December, the lowest level since September 2020. A third employment report, from outplacement firm Challenger, Gray & Christmas, found that there weree 108,435 job cuts in January, the most for the month since 2009. 

PERSONAL FINANCE

Drive down your tax bill

On December 31st 2025, the IRS released Information Release 2025-129, detailing proposed regulations for the new car loan interest deduction. This deduction applies to new vehicles assembled in the U.S. and has an annual limit of $10,000. Eligibility begins to phase out at a modified adjusted gross income (MAGI) of $100,000, decreasing by $200 for each $1,000 over the threshold. The deduction can be claimed on Schedule 1-A of Form 1040 and is available to both itemizers and nonitemizers. The proposed regulations specify that the vehicle must be used for personal purposes more than 50% of the time. Starting in 2026, lenders will be required to report car loan interest of $600 or more on Form 1098 VLI. A public hearing on the proposed regulations has been scheduled for February 24th 2026.

REGULATORY

Tax enforcement enters a new era

The dissolution of the Department of Justice's Tax Division marks a significant shift in U.S. tax enforcement. This change threatens the delicate balance of voluntary compliance that has been central to the tax system. Carolyn Schenck, a former IRS Counsel, emphasizes the importance of understanding the successful partnership between the IRS and DOJ, stating, "The partnership was the linchpin in keeping current voluntary compliance practices a reality." As the IRS and the newly formed Tax Litigation Branch within the Civil Division adapt, the effectiveness of tax enforcement may hinge on their ability to maintain strong communication and collaboration. The article highlights the critical role of this relationship in addressing complex tax evasion cases, including those involving offshore accounts and cryptocurrencies.

LEGAL

Second federal judge halts IRS data sharing with ICE over privacy concerns

A second federal judge has blocked the IRS from sharing taxpayer address information with Immigration and Customs Enforcement, dealing another blow to the Trump administration’s efforts to use tax records for immigration enforcement. U.S. District Judge Indira Talwani ruled that the information-sharing arrangement raises serious concerns about violations of taxpayer privacy laws, risks wrongful arrests due to mistaken identity, and could discourage immigrants from filing taxes. Talwani cited cases including the warrantless detention of a U.S. citizen mistakenly targeted by ICE and ordered both agencies to stop sharing or using the data while the case proceeds. The ruling follows a similar order issued in November by another federal judge, with both cases challenging a Treasury–Homeland Security agreement under which the IRS had already disclosed addresses for roughly 47,000 taxpayers.

Taxpayer dollars at stake in Trump lawsuit

During a Senate Banking Committee hearing on Thursday, Treasury Secretary and acting IRS commissioner Scott Bessent revealed that if President Donald Trump wins his lawsuit seeking $10bn in damages from the IRS for leaked tax returns, the financial burden would fall on American taxpayers. Senator Ruben Gallego (D-AZ) questioned Mr. Bessent about the source of the funds, to which Mr. Bessent confirmed, “It would come from the Treasury,” indicating that it would be drawn from the general fund funded by taxpayer contributions. Mr. Trump has stated that if he wins, he intends to give the compensation away, claiming: “Any money that I win, I'll give it to charity, 100 percent to charity.” Mr. Bessent also clarified that any legal agreements regarding the lawsuit would be handled by the Department of Justice.

RISK

FSB warns on repo market risks

The Financial Stability Board (FSB) has raised the alarm about the potential risks in the leveraged short-term repo market. The global financial watchdog warned that asset managers, particularly hedge funds, may need to liquidate holdings during market stress, causing significant downward pressure on bond prices. The FSB's report highlights the need for regulators to address data gaps in the $16trn repo market and develop metrics to monitor vulnerabilities. "Strains in repo and government bond markets may spill over into each other or across multiple jurisdictions, given the international nature of repo markets," the report said, adding: "Given the importance of repo markets within the global financial system, it is critical to preserve their functionality, particularly during periods of stress."

ASSET MANAGEMENT

Asset management’s margin squeeze: Why growth no longer guarantees profits

EY’s Jun Li argues that asset management’s long-standing growth model is under strain as rising assets under management are increasingly offset by higher costs and intensifying fee pressure. Firms are reinvesting heavily in talent, technology, compliance and product development, while a shift toward passive and lower-cost strategies continues to compress margins. Scale still matters, Li says, but success now depends on clarity of purpose, operational integration and the ability to clearly communicate a firm’s core value proposition. Li notes that while artificial intelligence is often seen as a solution, meaningful transformation has been slow due to legacy systems, fragmented data and unclear strategies, leaving many firms stuck in pilot projects. Future growth opportunities lie not in a single theme but across private markets, private wealth and digital assets, each requiring structural change, innovation and new partnerships.

FINANCIAL PLANNING

Rising childlessness is reshaping traditional estate planning

A growing number of Americans are childless, making estate and financial planning more complex as many lack clear next of kin to manage medical decisions, finances, or assets. Experts say childless adults are far less likely to have wills or powers of attorney, often because they don’t know whom to name, increasing the risk of costly probate and unwanted outcomes. Professionals are increasingly filling the gap. Trust firms can act as executors, trustees, or financial powers of attorney, handling bills and distributing assets according to a client’s wishes. Dawn Jinsky of Plante Moran notes that individuals can name the firm in these roles to ensure estates are managed properly, while medical decisions are often left to someone with a closer personal connection. Financially, childless Americans are advised to prioritise long-term care and disability insurance and often frame legacy around philanthropy or extended family rather than direct inheritance.

INTERNATIONAL

U.K. could introduce wealth tax, says economist

A prominent European economist believes that Britain may soon consider a wealth tax. Gabriel Zucman said that while French President Emmanuel Macron has paused plans for a tax on the wealthy, interest in the idea was "bubbling up everywhere." Mr Zucman has proposed a 2% annual levy on the wealth of any French taxpayer with assets of more than €100m, which he says would raise revenue equal to 0.8% of France's GDP. In the U.K., Green Party leader Zack Polanski has put forward a proposal for a 1% tax on assets above £10m and 2% on assets exceeding £1bn, saying this would raise £14.8bn a year. Chancellor Rachel Reeves previously noted that "we already have taxes on wealthy people," adding: "I don't think we need a standalone wealth tax." 
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