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The IRS’s proposed 2027 budget would further reduce funding and staffing, cutting discretionary spending to $9.8bn and eliminating roughly 4,000 additional jobs, with enforcement functions bearing the brunt of the reductions. Combined with prior cuts, enforcement staffing is set to fall sharply, particularly in audits and collections, prompting concerns about declining audit coverage and reduced deterrence against noncompliance. To compensate, the agency is expected to rely more heavily on automated, data-driven tools such as income matching programs, which are less resource-intensive but tend to focus on simpler cases rather than complex, high-value audits. While taxpayer services funding and staffing would see modest increases to handle rising demand and new tax provisions, spending on technology and operations would also decline, despite the IRS’s stated goal of modernizing through AI and advanced analytics. Officials argue the changes will improve efficiency and reduce costs, but critics warn that scaling back enforcement, historically a high-return activity, could ultimately reduce tax revenue and shift the burden of compliance unevenly, particularly away from higher-income taxpayers, while also straining the agency’s ability to manage growing workloads.

 

Bloomberg Tax

Forbes

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A House Republican has introduced legislation to expand a key small-business tax deduction, proposing to increase the qualified business income (QBI) deduction from 20% to 23% as part of a broader effort to attach tax measures to upcoming GOP budget legislation. The bill, put forward by Rep. David Kustoff (R-TN), aims to boost support for small businesses and family farms by enhancing a provision originally created under the 2017 Tax Cuts and Jobs Act to offset reductions in corporate tax rates. Mr. Kustoff and other Republicans are seeking to include the proposal in a budget reconciliation package tied to funding the Department of Homeland Security, a process that allows passage with a simple Senate majority. While the proposal has garnered support among Republican lawmakers, its path forward remains uncertain, as the current budget framework does not yet include tax provisions and any addition would likely require offsets to cover the cost. Previous estimates suggest the existing deduction already reduces federal revenues by tens of billions of dollars annually, raising questions about fiscal impact.

 

CNBC

The IRS is changing its approach to the commensurate-with-income (CWI) standard, which was established in 1986. Recent guidance indicates that the IRS may now more readily apply CWI to assert significant adjustments, as seen in its September 2025 Notice of Deficiency to Meta Platforms, claiming over $54bn in adjustments. Gregory Ossi, founder of Greg Ossi Law, emphasizes that "taxpayers should assess their exposure to CWI periodic adjustments." This shift raises questions about the implications for intercompany transactions and compliance with tax treaty obligations. Companies must now consider potential CWI adjustments in their transfer pricing strategies to mitigate risks.

 

Bloomberg Tax

Sam's List has released an Accountant Shortage Index, ranking all 50 states and Washington, D.C. on their accountant availability. Nevada tops the list with only 1.75 accountants per 1,000 residents, facing a staggering 139 professionally prepared returns per accountant, more than double the national average of 59. The state has seen a 29.5% decline in its accountant workforce from 2019 to 2024. Other states like Mississippi, Arkansas, Kentucky, and South Carolina also report critical shortages, with fewer than 2.75 accountants per 1,000 residents. Kimberly Green, co-founder of Sam's List, said: “If you run a firm in Nevada, you are not dealing with a staffing inconvenience: you're dealing with demand that has structurally outrun supply.” The report highlights the urgent need for firms in these states to adapt to the growing demand for accounting services.

 

CPA Practice Advisor

Businesses facing liquidation must accurately value their assets and liabilities to inform stakeholders like shareholders and creditors. Liquidation can be voluntary or involuntary, and the financial reporting needs differ significantly from those of ongoing businesses. According to FASB Concepts Statement 1, stakeholders require insights into potential returns upon liquidation, as "information about the past is usually less useful in assessing prospects for an enterprise's future if the enterprise is in liquidation." The adoption of a liquidation basis of accounting is crucial when liquidation is imminent, which is determined by specific criteria outlined in ASC 205-30. This basis focuses on the cash expected from asset sales and the settlement of obligations, providing stakeholders with a clearer picture of the financial situation during liquidation.

 

The Cpa Journal

The U.S. housing market remains subdued as high mortgage rates and elevated home prices continue to deter many buyers, but a subset of desirable homes is still selling rapidly, highlighting a growing divide in market performance. Data from Zillow shows the typical home spent 56 days on the market in March, yet properties that successfully sold went under contract in a median of just 19 days - the widest gap for this time of year since 2020. This reflects a shift toward far more selective buyer behavior compared with the pandemic-era boom, when homes sold quickly regardless of condition or pricing. Demand is strongest for move-in ready homes that are competitively priced and require little or no renovation, particularly in regions such as the Midwest and Northeast where limited new construction has constrained supply. In contrast, older or outdated properties are struggling to attract interest, as buyers remain cautious about the rising and uncertain costs of repairs, insurance, and borrowing. 

 

Wall Street Journal

President Donald Trump has said he will remember companies that do not seek refunds on duties after the Supreme Court ruled against his tariffs. “It's brilliant if they don't do that,” Trump said on CNBC in response to a question about whether companies such as Amazon and Apple should request refunds on duties that have now been deemed unlawful. “If they don't do that, I'll remember them.” The Supreme Court's decision could lead to the largest-ever repayment by the U.S. government, with refunds potentially exceeding $160bn. Companies including Costco and FedEx have filed lawsuits to secure their refund rights.

 

CNBC	Los Angeles Times

A U.S. appeals court has upheld a ruling against Liberty Global’s “Project Soy” tax structure, marking a significant win for the IRS and reinforcing its ability to challenge transactions that are primarily designed to reduce tax liabilities without meaningful economic purpose. In a 2-1 decision, the 10th Circuit Court of Appeals found that the company’s 2018 series of internal transactions, structured to exploit a loophole in the 2017 tax law governing foreign earnings, lacked sufficient economic substance, rejecting Liberty Global’s claim for a $110m tax refund. The judgment strengthens the IRS’s use of the economic substance doctrine, which allows authorities to disregard tax benefits arising from arrangements that do not have a genuine business rationale beyond tax minimisation. The ruling is expected to embolden the IRS to pursue similar cases more aggressively, particularly as it faces resource constraints and looks to challenge complex corporate tax strategies through litigation.

 

Bloomberg Tax

Wall Street Journal

The American Bankers Association (ABA) has responded to the IRS' proposed rulemaking regarding the Trump Account Contribution Pilot Program, which allows eligible children to receive $1,000 contributions. The ABA emphasizes the importance of Trump accounts in promoting financial education and long-term wealth building for future generations. It recommends that the IRS clarify the process for making contributions to rollover Trump accounts, saying: “We are seeking clarification on when and how a $1,000 pilot program contribution could be made to a rollover Trump account.” The ABA believes that contributions should ideally be made when the initial Trump account is opened to maximize growth and reduce administrative burdens.

 

Tax Notes

Insurance chief risk officers (CROs) are prioritising cyber security, advanced technology, and third-party dependencies as their most immediate concerns, while preparing for longer-term risks including climate transition, data ethics, and a potential global debt crisis, according to an EY/IIF survey of 106 insurers. Cyber risk remains the top near-term threat, cited by 80% of CROs, with growing focus on data protection, phishing, and vendor-related vulnerabilities, while insurers increasingly emphasize resilience, recovery, and real-time risk monitoring over simple compliance. At the same time, firms are accelerating the adoption of artificial intelligence across risk management and operations, although progress is constrained by skills shortages, data quality issues, and integration challenges, prompting wider implementation of AI governance frameworks. Rising reliance on third-party providers has elevated operational resilience and outsourcing risks to board-level priorities, with insurers strengthening oversight, testing, and continuity planning across increasingly complex ecosystems. Looking further ahead, CROs identify data privacy and ethics, climate transition, and systemic financial risks as key long-term threats, reflecting a shift toward more strategic, data-driven risk management as the function becomes more central to business decision-making.

 

Insurance Business

Recent developments have reignited discussions on golden parachutes and tax mitigation strategies. The Federal Trade Commission's 2025 decision to vacate its ban on non-compete agreements has restored their utility in offsetting tax exposure related to these payouts. Golden parachutes, which are compensation packages for executives during corporate changes, are increasingly common even in high-growth sectors. As noted by Ed Hamilton, managing director at VRC, "Thoughtful integration of compensation strategy, tax planning, valuation discipline and legal compliance is critical to achieving desired outcomes." Companies must carefully structure non-compete agreements to mitigate tax impacts, ensuring they are enforceable and supported by a solid valuation to withstand scrutiny from tax authorities.

 

Accounting Today

Many CPA firms understand the need to focus on growth, advisory services, and value-based pricing, but struggle to make meaningful progress due to cultural inertia, unclear execution plans, and a lack of effective change management, according to Matt Rampe, a partner at Rosenberg Associates. While growth is widely seen as essential, firms face internal barriers such as limited leadership capacity, unclear ownership of business development, and gaps in required skills. Similarly, shifting toward higher-margin advisory work is often hindered by partner resistance, lack of clear roadmaps, and insufficient commitment to new ways of working. The core issue, Mr. Ramp argues, is not strategy but execution, with many firms lacking structured change management approaches to embed new behaviors. Applying formal frameworks - such as building leadership coalitions, removing operational barriers, defining clear strategic visions, and celebrating early wins - can help firms translate intent into sustained transformation.

 

Accounting Today

PwC has been fined HK$1.3bn ($166m) by Hong Kong regulators and banned from taking on new clients for six months after authorities found serious breaches in its audits of collapsed property developer Evergrande in 2019 and 2020. Regulators described the failures as “egregious,” with additional fines imposed on former partners and PwC setting aside HK$1bn to compensate minority shareholders, as the firm acknowledged its work fell well below expected standards amid wider scrutiny over its role in the accounting issues preceding Evergrande’s 2021 collapse.

 

Bloomberg

Financial Times

South China Morning Post