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The IRS has announced that pastors endorsing political candidates from the pulpit will not risk losing their tax-exempt status. This decision seeks to create an exception for religious organizations from the Johnson Amendment, a 1954 rule that prohibits tax-exempt entities from engaging in political endorsements. In a joint court filing, the IRS and the National Religious Broadcasters Association requested a federal court in Texas to halt the enforcement of the Johnson Amendment against them, arguing it infringes on their First Amendment rights. The plaintiffs that sued the IRS had previously asked a federal court in Texas to create an even broader exemption, to rule that all nonprofits, religious and secular, were free to endorse candidates to their members. The IRS has agreed to a narrower carveout, and said that if a house of worship endorsed a candidate to its congregants, it would be viewed not as campaigning but as a private matter, like “a family discussion concerning candidates.” Earlier this year, Republican lawmakers also introduced legislation aimed at removing the amendment.

 

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President Donald Trump has announced a 25% tax on goods imported from Japan and South Korea, citing ongoing trade imbalances with these key U.S. allies. The tariffs are set to take effect on August 1st. In letters posted on Truth Social, he warned both nations against counter measures and emphasized the importance of maintaining fair trade relations, adding: “If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge." This move marks a significant escalation in U.S. trade policy, potentially impacting various sectors reliant on imports from these countries.

 

Los Angeles Times

U.S. Rep. Dina Titus (D-NV) has introduced the Fair Accounting for Income Realized from Betting Earnings Taxation (FAIR BET) Act to restore the ability for gamblers to deduct 100% of their losses on tax filings. This proposal comes after changes made in the One Big Beautiful Bill Act, which limit deductions to 90% of losses, raising concerns in the casino industry. Ms. Titus described the FAIR BET Act as “common-sense legislation” that “will bring fairness back to gaming taxation.” She emphasized that the government should encourage players to report winnings and use legal operators, warning that the recent changes could drive gamblers to unregulated platforms. The amendment to the tax code is set to take effect next year.

 

CPA Practice Advisor

Andrew Leahey, a tax and technology attorney, warns that Maryland's new 3% tax on data and software services could lead to significant operational challenges for companies. The tax, effective July 1st, aims to modernize the state's revenue system but may create compliance chaos. In a piece for Bloomberg Tax, Mr. Leahey writes: "The tax collapses under its own mobility and takes existing state tax revenue with it." Without multistate cooperation, businesses may opt to avoid Maryland altogether, leading to higher costs for consumers. Mr. Leahey suggests that Maryland should consider taxing end-users instead of business inputs to avoid discouraging investment and innovation.

 

Bloomberg Tax

Texas Gov. Greg Abbott has enacted a law that allows certain costs incurred by public higher education institutions to qualify for the Texas Historic Preservation Tax Credit program. This applies to expenses incurred from January 1st 2026 to January 1st 2035. The law is set to take effect on January 1st 2026.

 

Bloomberg Tax

AICPA is advocating for a careful transition from paper checks to electronic payments at the IRS, following President Donald Trump's Executive Order 14247. The order mandates the cessation of paper checks for federal disbursements by September 30th 2025. However, while AICPA supports modernization for efficiency and cost reduction, it cautions that requiring a U.S. bank account for electronic tax payments could alienate vulnerable groups, including seniors and the unbanked. Daniel Hauffe, senior manager for tax policy and advocacy at AICPA, stated: "Although this executive order is a step in the right direction, there are many considerations before implementing changes." AICPA's letter references a TIGTA report, highlighting that nearly 7m taxpayers received refunds through non-electronic means in the last tax year.

 

Accounting Today

Journal of Accountancy

The PCAOB has released its latest staff publication, "Audit Focus: Engagement Acceptance," which emphasizes crucial reminders for auditors working with smaller public companies. The publication outlines best practices for evaluating client information, including changes in ownership and management, as well as assessing the predecessor auditor's disagreements with management regarding accounting principles. The PCAOB staff highlighted four good practices, including assessing partner capacity, stating: "In both the acceptance and continuance process, audit firms have implemented a 'scorecard' where points are assigned to a partner based on the number and type of audits already served." This approach aims to manage partner workloads effectively to ensure quality engagement.

 

Accounting Today

CPA Practice Advisor

Ascend has broadened its East Coast footprint by integrating two accounting firms, Tronconi Segarra & Associates (TSA) in Williamsville, New York, and BGW in Charlotte, North Carolina, effective July 1st. The financial specifics of these acquisitions remain undisclosed, but Ascend has welcomed over 150 partners and associates from TSA and 75 professionals from BGW. Ascend, which is backed by private equity, allows its partner firms to maintain independence while providing essential resources for growth. TSA chief executive James Segarra stated: “We believe Ascend represents the future for any firm that wants to be competitive and thrive.” Meanwhile, BGW partner Stephanie Taylor emphasized the importance of maintaining the firm's unique culture while benefiting from Ascend's support. Ascend aims to foster a community of independent firms that thrive on diverse thought and innovative practices.

 

CPA Practice Advisor

Daniel A. Witt, President of the International Tax and Investment Center, emphasizes the importance of tax systems for both developed and emerging economies. He notes that "when established economies sneeze, emerging economies catch a cold," highlighting the interconnectedness of the global economy. Emerging economies like Nigeria, Kenya, and India are striving for growth, but face challenges from restrictive policies in developed nations. To attract foreign investment, these countries must modernize their tax systems, ensuring stability and predictability. Simplifying tax administration and enhancing transparency are crucial for fostering a favorable investment climate. Mr. Witt advocates for a collaborative approach to promote investment and growth in emerging markets.

 

Bloomberg Tax

Artificial intelligence (AI) agents are poised to revolutionize the accounting industry by autonomously managing complex tasks like account reconciliation and invoice processing. Autonomous AI agents independently managing multistep workflows with minimal human supervision," represent a significant leap in technology. The market for AI agents is projected to grow from $5bn to approximately $47bn by 2030, according to ResearchAndMarkets.com. However, the implementation of these agents must be approached with caution, as accuracy and accountability are crucial in finance. Building AI agents on domain-specific large language models ensures adherence to accounting standards and regulations. Human oversight remains essential to prevent potential disruptions caused by poorly managed AI systems. Ultimately, responsible implementation of AI agents can enhance efficiency, reduce costs, and allow accountants to focus on strategic analysis and advisory roles.

 

Accounting Today

U.S.-based companies, particularly Amazon Web Services Inc. (AWS), could save millions in taxes following a favorable ruling from the Delhi High Court. The court determined that AWS's services do not incur royalties or fees subject to taxation under the India-US double taxation avoidance treaty, rejecting India's attempt to tax $147m of income. This decision may impact numerous foreign companies providing similar services in India, as noted by tax practitioners.

 

Bloomberg Tax