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Accountancy Slice
USA
22nd April 2026
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THE HOT STORY

IRS budget cuts threaten taxpayer fairness

Steve Ellis, president of Taxpayers for Common Sense, highlights the ongoing challenges facing the IRS, including a shrinking workforce and outdated technology. The recent budget proposal from President Donald Trump aims to cut the IRS budget from $11.2bn to $9.8bn, exacerbating existing issues. Ellis warns that "cutting IRS funds likely would increase the tax gap and deepen inequality between those who follow the rules and those who don't." The IRS has already lost 25,000 employees, complicating its ability to enforce tax laws effectively. The Congressional Budget Office has indicated that sustained investment in IRS enforcement could yield $180bn over a decade, emphasizing the need for adequate funding to ensure fairness in the tax system.

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TAX

Bears seek tax relief for new stadium

The Chicago Bears are deliberating between building a new stadium in Arlington Heights or Northwest Indiana, with property tax relief being a crucial factor in garnering support from lawmakers. State Rep. Kam Buckner is advocating for a new amendment that would provide the Bears with property tax certainty while also offering statewide tax relief. Buckner said: “It'll do something that the state has not done . . . It'll actually consider how these things should be able to help regular taxpayers as well.” The proposal aims to ensure that a portion of special incentive payments goes towards property tax relief for affected communities. As pressure mounts from the NFL and Gov. JB Pritzker, Buckner is confident that there are enough votes to advance the proposal, which is seen as a vital first step in the Bears' plans. The Bears are expected to make a decision by late spring or early summer.

Betting on taxes: A state-by-state breakdown

Matthew Knittel and Robyn Toth from the Pennsylvania Independent Fiscal Office analyze the rapid expansion of legalized sports wagering across 34 states, highlighting the significant variation in state tax rates. These rates range from 6.75% in Nevada to as high as 51% in states like New York and Rhode Island. The authors note that "higher state tax rates clearly diminish operator profit," which can lead to reduced advertising and promotional spending by operators. In 2025, several states increased their sports wagering taxes, with Illinois implementing a 25/50-cent per-wager tax. The article emphasizes that there is no clear correlation between tax rates and per capita handle, suggesting that urban populations and professional sports teams influence betting volume more than tax rates. As the market matures, competition from untaxed platforms may further impact state revenues.

NY Congressman proposes tax relief on utility bills

U.S. Rep. Josh Riley has introduced the No Taxes on Utility Bills Act, aiming to allow taxpayers to deduct all taxes and state-mandated surcharges on gas and electric bills. Riley emphasized the urgency of the situation, saying: “Families across Upstate New York are struggling just to keep the lights and heat on.” The legislation seeks to amend Section 164(a) of the Internal Revenue Code to include these costs as deductible expenses, which currently are not covered under federal tax law. The proposal is expected to provide relief to both residential and small business ratepayers, as upstate New York faces some of the highest household energy prices in the nation. Central Hudson expressed support for any measures that make energy more affordable for customers.

INDUSTRY

Navigating the complexities of joint ventures

The FASB has introduced ASU 2023-5, aimed at clarifying the accounting for joint ventures (JVs) and addressing inconsistencies in practice. Effective January 1, 2025, this guidance mandates that contributions of assets and liabilities be valued at fair value upon formation, a shift from previous practices that allowed for varied valuations. Robert Singer, PhD, CPA, emphasizes that classifying a newly created entity as a JV is complex, saying: "It is not enough for accounting purposes to rely upon the legal definition of a joint venture." The article explores the criteria for determining whether an entity qualifies as a JV, including the variable interest entity (VIE) and voting interest entity (VOE) models, and highlights the importance of meeting the purposes test for proper classification.

ECONOMY

Retail sales surge on gas price spike, masking mixed consumer spending

U.S. retail sales jumped 1.7% in March, marking the strongest monthly increase in more than three years, driven largely by a sharp rise in gasoline prices and geopolitical disruption. The Commerce Department said that sales at gas stations surged 15.5% as fuel costs spiked following the Iran conflict and supply disruptions, significantly boosting overall figures. Excluding gasoline, retail sales rose a more modest 0.6%, slightly below February’s pace, indicating more moderate underlying consumer demand. Spending remained relatively resilient across several categories, including furniture and electronics, supported in part by tax refunds and income gains. However, signs of strain emerged as apparel sales stagnated and restaurant spending grew only marginally, suggesting that higher fuel costs are beginning to shift household budgets, particularly for lower-income consumers. Economists warn that while savings, tax refunds, and credit are helping sustain spending for now, prolonged high energy prices could increasingly pressure consumers and the broader economy. 

Pending home sales rebound in March, beating expectations

The National Association of Realtors (NAR) reported on Tuesday that U.S. pending home sales increased by 1.5% in March to an index level of 73.7, exceeding expectations of a 0.5% rise and indicating stronger-than-anticipated housing demand despite elevated mortgage rates. The monthly gain was led by regional growth in the Northeast and South, where contract signings rose 4.4% and 3.9% respectively, while activity declined in the Midwest and West. On a year-over-year basis, pending sales fell 1.1%, highlighting ongoing affordability challenges and uneven market conditions across regions. “Contract signings rose in March despite higher mortgage rates, pointing to pent-up housing demand,” said NAR chief economist Dr. Lawrence Yun. “A greater supply of inventory will help translate that demand into more home sales,” he added. 

U.S. business inventories rose slightly above forecasts in February

U.S. business inventories increased by 0.4% in February, according to the Commerce Department, slightly ahead of the 0.3% expected among economists polled by Reuters, driven by a rebound in wholesale stock levels and indicating a potential boost to first-quarter economic growth. Wholesale inventories rose 0.8%, while retail inventories increased 0.2% and manufacturing stocks edged up 0.1%, contributing to a 1.3% year-on-year gain. Business sales also strengthened, rising 1.7% during the month, reducing the inventory-to-sales ratio to 1.33 months. The data suggests inventory investment may support GDP growth in the first quarter, with the Federal Reserve currently forecasting a 1.3% annualized expansion. 

REGULATORY

Fed chair nominee Warsh faces scrutiny over asset divestment

Kevin Warsh, nominated to chair the Federal Reserve, faced tough questioning from Senate Democrats regarding his plan to divest significant financial assets. During his confirmation hearing, Warsh stated: "I agreed to divest virtually all of my financial assets" to ensure independence. Senator Elizabeth Warren challenged him on the specifics of his divestment, questioning the transparency of his financial disclosures. Warsh, who served on the Fed's Board from 2006 to 2011, claimed he would sell assets within 90 days of taking office, but acknowledged the challenges involved in the process.

CFPB rolls back anti-discriminatory lending protections

The US Consumer Financial Protection Bureau (CFPB) has ended certain anti-discrimination requirements for lenders, removing obligations tied to the Equal Credit Opportunity Act’s “disparate impact” standard, which previously addressed policies that unintentionally disadvantaged protected groups. The move, backed by CFPB Director Russ Vought, has drawn criticism from Democratic lawmakers who argue it weakens longstanding civil rights protections in lending, while the administration maintains the changes are intended to prevent what it views as unintended discriminatory practices. Brian Shearer, a former senior policy official at the CFPB and now head of competition and regulatory policy at the Vanderbilt Policy Accelerator, warned that removing disparate impact protections could enable lenders to use artificial intelligence (AI) in ways that result in discriminatory credit decisions and interest rate setting. "This administration wants to get rid ⁠of the ​only guardrail that stopped lenders from using AI to ​make life-changing lending decisions even if it discriminates based on religion, race, or sex," he added.

LEGAL

Supreme Court seems ready to back SEC in 'disgorgement' fight

Reuters reports that the Supreme Court on Monday appeared inclined to back the SEC in a case testing the bounds of "disgorgement," a financial remedy in which the SEC seeks recovery of profits made from illegal activities. The SEC's general power to pursue disgorgement is not in dispute, Reuters notes. At issue in Sripetch v. SEC is whether the agency must demonstrate that victims suffered economic harm before it can seek the surrender of illegal ⁠profits. Some on the court, including conservative Justice Amy Coney Barrett, pushed back on the argument made by Sripetch's lawyer, Daniel Geyser, that the disgorgement in the case would amount to impermissible punishment by the SEC because it had ​failed to prove that victims had experienced economic harm.

OUTLOOK

Retirement confidence falls to near-decade low as inflation concerns rise

Americans’ confidence in having enough savings for retirement has dropped to its lowest level in nearly a decade, driven largely by rising living costs and concerns about the future of government benefits. A survey by the Employee Benefit Research Institute found that 61% of workers feel confident about their retirement finances, down from 67% in 2025 and 72% in 2021, while confidence among retirees also declined to 73% from 78% a year earlier. Inflation has been a key factor, with many retirees reporting higher-than-expected expenses, particularly for essentials such as groceries, healthcare, and fuel. The findings also highlight growing fears about the long-term stability of Social Security and Medicare, with some individuals opting to claim benefits earlier amid uncertainty. Overall, both workers and retirees reported declines in financial well-being and health, alongside rising concerns about debt, underscoring broader economic pressures affecting retirement planning.

WORKFORCE

Meta tracks employee mouse movements for AI training

Meta is implementing new tracking software on U.S. employees' computers to monitor mouse movements, clicks, and keystrokes. The initiative, known as the Model Capability Initiative (MCI), aims to enhance the company's AI models by mimicking human interactions with technology. The tool will operate on work-related applications and websites, capturing occasional screenshots of employees' screens. According to an internal memo, the goal is to improve AI performance in tasks including selecting from dropdown menus and using keyboard shortcuts. "This is where all Meta employees can help our models get better simply by doing their daily work," the memo said.

INTERNATIONAL

Chile's long-awaited reform package is unveiled

Chile President Jose Antonio Kast has announced a reform package aimed at stimulating economic growth and promoting job stability. The plan includes 40 measures, notably reducing the corporate tax rate from 27% to 23% over four years. Kast emphasised that the reforms are a response to urgent economic challenges, saying: "This bill is not an ideological agenda. It is a concrete response to . . . real emergencies." The government has said it aims to increase annual growth to 4% from last year's 2.5%. Other tax measures include the creation of a tax credit for wage payments, which is designed to encourage many smaller companies to pay employees on the books. "This injects $1.4bn annually into the productive sector, benefits 235,000 SMEs (representing 86% of the credit's recipients), and protects more than 4 million workers. Formal employment will no longer be a penalty but an ⁠advantage," Kast said.

AND FINALLY...

Law firm apologizes for AI 'hallucinations' in court filing

Elite law firm Sullivan & Cromwell has apologized to New York federal judge Martin Glenn for submitting a court filing with inaccurate citations and other errors generated by artificial intelligence. In a letter dated April 18, Andrew Dietderich, co-head of the firm's global restructuring group, said the filing contained multiple “hallucinations” made by AI software. Boies Schiller Flexner - which is also involved in the case - spotted the errors in the filing, Dietderich wrote in the letter to Glenn, chief judge of the U.S. ⁠Bankruptcy Court in Manhattan. "I apologize on behalf of our entire team. I also called Boies Schiller Flexner ​LLP on Friday to thank them for bringing this matter to our attention and to apologize directly to them ​as well," Dietderich wrote.
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