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Accountancy Slice
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23rd February 2026
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THE HOT STORY

Trust in AI for taxes declines

According to the second annual U.S. Tax Filing Report by Invoice Home, trust in artificial intelligence (AI) for tax filing has decreased among taxpayers. In 2026, only 37% of respondents considered AI over hiring a tax professional, down from 43% in 2025. Acceptance of AI varied by generation, with declines noted across all groups. Tom Hood, CPA, emphasized the importance of having a CPA as a trusted adviser using technology, stating: “The answer is obvious - you want the CPA as trusted adviser using the latest technology.” The survey also revealed that 42% of respondents felt confident in filing their taxes correctly, while younger generations expressed concerns about potential tax liabilities, with 24% of Gen Z and 21% of Millennials planning to delay filing. Many respondents are seeking support through digital tools and financial advisers.

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TAX

Trump raises new global tariff to 15%

President Donald Trump has announced that he will raise global tariffs to 15%, increasing the rate from 10%. In a social media post on Saturday, the president said the higher levy would take effect immediately. The announcement came a day after the Supreme Court struck down a broad portion of his trade agenda in a 6–3 ruling that found he had improperly invoked emergency powers under the International Emergency Economic Powers Act. In response to Friday's decision, Trump imposed a 10% worldwide tariff under Section 122 of the Trade Act of 1974, which permits temporary levies of up to 150 days without congressional approval. He said further "legally permissible" tariffs would be issued in the coming months, while sharply criticising the court's judgment as "anti-American". The White House has yet to clarify the precise timing of the new measures, as the president prepares to address Congress on Tuesday.

Law firms prepare for tariff refund fight after Supreme Court ruling

Trade attorneys say the volume of cases seeking refunds for tariffs already imposed – more than 1,800 already – will likely surge after Supreme Court justices rejected the legal rationale behind an estimated $175bn in U.S. customs revenue since last April. The court ruled on Friday that President Donald Trump lacked authority to impose tariffs under the International Emergency Economic Powers Act, a 1977 law meant for use in national emergencies. At a White House press conference on Friday, Trump said he would levy more tariffs and predicted the process for companies seeking refunds would precipitate a protracted legal battle. “We’ll end up being in court for the next five years,” Mr. Trump said. Lawyers have told Reuters they expect to file many more cases in the coming weeks at the New York-based Court of International Trade.

INDUSTRY

The evolving CPA: Thriving beyond technical skills in an AI-first landscape

The rapid advancement of technology is significantly transforming the accounting profession, often outpacing the awareness of major firms. James O'Dowd, founder and chief executive of Patrick Morgan, notes that artificial intelligence (AI)-native startups are hiring senior accounting leaders to develop platforms that automate routine tasks. This shift raises questions about the commoditization of traditional CPA skills and the need for professionals to adapt. As AI can replicate up to 80% of traditional accounting tasks, the remaining 20% - which includes judgment and context - becomes increasingly valuable. The profession is bifurcating into platform architects and compliance validators, with mid-career professionals facing the greatest challenges in adapting to this new landscape. O'Dowd emphasizes that "the future CPA will be defined primarily by their ability to interrogate machine output and design AI-enabled systems." The accounting field is not disappearing, but its internal skill hierarchy is being reordered.

Why CPAs should avoid 'going bare'

Choosing to "go bare" in accounting - abstaining from professional liability insurance - can expose firms to significant risks. As Alvin Fennell III, a vice president at Aon Affinity, emphasizes: "Going bare isn't a decision to make lightly." Many CPAs mistakenly believe that smaller firms are less likely to be sued or that having insurance increases their chances of being targeted. However, the reality is that any firm can face legal claims, and the financial consequences can be devastating. Without insurance, accountants risk not only their finances but also their reputation and mental well-being. Professional liability insurance can provide essential protection, covering legal costs and helping maintain a CPA's reputation. Ultimately, firms should carefully assess their risks and consider the benefits of obtaining coverage to safeguard their future.

ECONOMY

U.S. economic growth slowed to 1.4% in fourth quarter amid government shutdown

U.S. economic growth slowed sharply in the fourth quarter of 2025, expanding at a 1.4% annual rate as a record-long government shutdown and weaker consumer spending weighed on activity. The figure fell short of economists’ expectations of 2.5% growth and marked a significant slowdown from the third quarter’s 4.4% pace. Federal government spending plunged at a 16.6% annual rate during the quarter, cutting nearly 1.2 percentage points from headline GDP. The shutdown, which lasted from October 1st through November 12th, disrupted federal operations and reduced services, though economists say such losses are often partially recouped once the government reopens. For the full year, the economy grew 2.2%, down from 2.4% in 2024 and the weakest annual performance since 2022. Even excluding the shutdown’s effects, underlying private-sector demand cooled, with a key measure of consumer and business spending rising at a 2.4% rate — the slowest since early 2025. Despite the slowdown, U.S. growth remains relatively strong compared with other developed economies, supported by steady consumer spending and ongoing investment in areas such as artificial intelligence. 

Core PCE inflation roie more than expected in December

Underlying U.S. inflation picked up more than expected in December, the Commerce Department reported on Friday, reinforcing expectations that the Federal Reserve will delay interest rate cuts until at least June. The core personal consumption expenditures (PCE) price index — which excludes food and energy and is closely watched by the Fed — rose 0.4% in December, above economists’ forecasts of 0.3%. On an annual basis, core PCE inflation accelerated to 3.0% from 2.8% in November. Overall PCE inflation also increased 0.4% for the month and rose 2.9% year-on-year. Economists warn that inflation could climb further in January, with monthly core PCE potentially rising another 0.4%, pushing the annual rate to around 3.1%. Strong services inflation, including a sharp rise in legal services costs, contributed to the pressure. Meanwhile, consumer spending rose 0.4% in December, though inflation-adjusted spending increased just 0.1%, suggesting slower momentum heading into the first quarter.

U.S. business activity growth slows to 10-month low in February

U.S. business activity expanded at its slowest pace in 10 months in February, as factory orders declined, services growth cooled and hiring stalled, according to S&P Global. The flash U.S. Composite PMI Output Index fell to 52.3 from 53.0 in January, its lowest level since April. While readings above 50 indicate expansion, both manufacturing and services showed weaker momentum. The services PMI edged down to 52.3, missing forecasts, while the manufacturing PMI dropped to a seven-month low of 51.2. New orders fell for the second time in three months, and employment growth nearly stalled, with the index at 50.2. S&P Global’s chief business economist Chris Williamson said the data point to first-quarter GDP growth of about 1.5%, signaling a notable cooling from the stronger expansion seen in the second half of last year.

U.S. new home sales rose in November, eased in December

U.S. new single-family home sales rose sharply in November before edging lower in December, according to delayed federal data released after the government shutdown. Sales climbed to an annual rate of 758,000 in November, up from 656,000 in October, then slipped to 745,000 in December - still above economists’ expectations of 738,000. The inventory of new homes for sale fell to 472,000 in December from 485,000 in November, while the median sales price increased 4.2% month-on-month to $414,400.

PERSONAL FINANCE

Helping online creators navigate the tax landscape

As the creator economy grows into a $205bn market, many content creators are realizing that with growth comes new business responsibilities. At the event "From Passion to Profit: What Creators Should Know for Tax Season 2026," hosted by H&R Block, Andy Phillips, Vice President of The Tax Institute, highlighted that “creators are just a microcosm of small business.” Financial concerns are prevalent, with 70% of creators citing finances as their top worry. The transition from W-2 employment to self-employment often leads to tax mismanagement, as many creators neglect their tax obligations until filing season. As businesses expand, hiring independent contractors and employees introduces complex payroll responsibilities. Phillips noted that “once creators begin hiring, they must be intentional,” as payroll errors can have serious consequences. The discussion also covered changes under the One Big Beautiful Bill Act, affecting reporting thresholds for tax forms. As the creator economy evolves, the demand for payroll and tax guidance is expected to rise.

LEGAL

SCOTUS to weigh Michigan tax foreclosure case with major financial stakes

The U.S. Supreme Court will hear arguments this week in a case that could have significant financial implications for Michigan homeowners who lost properties to tax foreclosure. In Pung v. Isabella County, the justices will consider whether the county violated the Fifth and Eighth Amendments by keeping proceeds from the sale of a foreclosed home beyond the amount owed in unpaid taxes. The Pung family’s home was sold to cover a $2,241 tax debt, fetching $76,000 despite an estimated market value of nearly $200,000. Lower courts have ruled the family is owed $73,000, but their attorney argues they should receive the full market value, claiming the county retained “stolen equity.” Isabella County maintains the foreclosure process followed legal procedures and warns that adopting a fair market value standard could force local governments to pay out more than they receive from tax sales. If the Supreme Court rules in favor of the Pung family, attorneys say it could open the door to class action lawsuits, potentially requiring Michigan counties to repay hundreds of millions of dollars to former property owners. A decision is expected later this summer.

Centerview settles lawsuit over analyst’s need for sleep

New York boutique investment bank Centerview Partners has settled a lawsuit from a former analyst who was fired after saying she needed eight to nine hours’ sleep per night. Kathryn Shiber had sued Centerview in 2021, claiming she was fired shortly after informing the firm that she had mood and anxiety disorders requiring her to sleep at least eight hours a night on a consistent schedule. Centerview said Sunday that it had settled the case but declined to discuss the terms. “Centerview has said all along that Ms. Shiber’s legal claims have no merit,” a Centerview spokesperson said. “We were ready to prove that in court, and are confident we would have prevailed at trial. But we are nonetheless happy to put this distraction behind us and focus on delivering for our clients.”

OUTLOOK

U.S. consumer sentiment edges up in February

U.S. consumer sentiment rose slightly in February but came in below expectations, as optimism among wealthier Americans was offset by weaker confidence among lower-income households. The University of Michigan’s final sentiment index ticked up to 56.6 from 56.4 in January, missing economists’ forecast of 57.3. While higher-income consumers reported feeling more secure due to stronger incomes and investment gains, others continued to struggle with elevated prices and economic uncertainty. Inflation expectations improved, with consumers projecting prices to rise 3.4% over the next year, down from 4% in January. Long-term inflation expectations held at 3.3%. Although recent job growth and easing inflation have provided some support, overall sentiment remains subdued compared to stronger readings in 2024. Nearly half of respondents cited high prices as a strain on their finances, and tariffs remain a key concern. 

DEI

Corporate board diversity efforts fade as DEI policies retreat

Corporate America is scaling back diversity efforts on boards, with S&P 500 companies appointing women and minority directors at rates similar to a decade ago. Nearly 80% of new directors last year were white and about three-quarters were men, marking a sharp decline from diversity gains in 2021. Corporate policies supporting board diversity have also declined. Only about a quarter of S&P 500 companies maintained formal policies last year requiring consideration of gender and racial diversity when appointing directors, down from roughly half the year before. So far this year, that share has fallen to 14%. The retreat comes after legal setbacks, including court rulings striking down California’s board diversity mandates and Nasdaq’s disclosure rule on board diversity. Although overall board demographics remain somewhat more diverse than a decade ago, progress has slowed significantly. At the current pace, boards in the broader Russell 3000 index would not reach gender parity until 2044, according to projections.

INTERNATIONAL

Deloitte set for U.K. leadership battle as it shakes up international structure

Deloitte partners are expecting a leadership battle in the Big Four firm’s U.K. business as part of an overhaul that will join up its European and Middle East businesses.

Vietnam and Turks and Caicos added to E.U.'s tax haven blacklist

The European Union has added Vietnam and the Turks and Caicos Islands to its non-cooperative tax list. The update from the Council of the European Union follows the removal from the list of Fiji, Samoa, and Trinidad and Tobago, which were deemed compliant with international tax standards. Vietnam's downgrade from the EU's "grey list" to the blacklist reflects its failure to meet the OECD Global Forum's requirements for tax information exchange. The Council said: "The list is part of the EU's efforts to promote tax good governance worldwide." The blacklist can lead to increased scrutiny and reputational damage for the listed nations.
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