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Accountancy Slice
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15th August 2025
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THE HOT STORY

IRS ditches outdated kiosks program

The IRS has decided to discontinue its $500,000 annual contract for self-service kiosks at Taxpayer Assistance Centers due to poor performance and declining usage. The TIGTA reported that only 55 out of 100 kiosks were operational as of August 2024, with taxpayer usage plummeting from over 80,000 in 2017 to just 4,600 in early 2024. Kenneth Corbin, chief of the IRS's Taxpayer Services Division, said: "The aging equipment no longer met service expectations or supported the needs of taxpayers." The IRS plans to explore more modern self-service options for taxpayers, as it also faces staffing reductions and potential closures of 110 Taxpayer Assistance Centers.

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TAX

Whistleblower awards soar to new heights

In fiscal year 2024, the IRS awarded whistleblowers a total of $123.5m, despite a decrease in the number of awards from 121 in FY 2023 to 105. The awards were linked to $474.4m in tax revenue collected. The report noted: “Although the number of awards decreased in FY 2024, the claim numbers related to those awards was 700, which is the third highest since the start of the current Whistleblower Program in 2007.” The average claim processing time improved significantly, with payments issued within 48 days, a 28% reduction from the previous year. The IRS Whistleblower Office received 5,660 submissions in FY 2024, down from 6,455 in FY 2023. Erick Martinez, acting director of the IRS Whistleblower Office, emphasized the importance of whistleblowers in combating tax non-compliance, saying: “Whistleblowers serve as an invaluable deterrent against non-compliance with tax laws.”

Unlocking tax savings through the QSBS program

The expansion of the Qualified Small Business Stock (QSBS) program under the One Big Beautiful Bill Act enhances tax-saving opportunities for businesses and investors. Tony Nitti, a principal at EY US Tax, stated: "Even before the reconciliation bill, Section 1202 Qualified Small Business Stock was one of the most powerful and unique incentives in all of the tax law." The new law raises the asset cap for qualifying businesses and introduces tiered tax benefits for early exits, allowing for greater tax-free gains. The maximum exclusion for individual selling shareholders has increased from $10m to $15m, potentially saving $3.5m in federal tax. However, challenges remain, particularly in determining stock qualification, as the requirements often apply at the corporate level. Mr. Nitti emphasizes the need for more guidance from the Treasury and the IRS to navigate these complexities effectively.

Tax influencers battle bad advice

Online tax misinformation is rising, prompting CPAs like Jasmine DiLucci to counter viral myths with fact-based video content. DiLucci, now with over 500,000 YouTube subscribers, critiques misleading advice - like writing off haircuts - by citing tax law. “All accountants have experienced this,” she said. The IRS, while aware of the threat, struggles to respond effectively due to constraints on tone and content. Former IRS Commissioner Danny Werfel launched a task force and even used his cat on Instagram to promote accurate tax information, but experts say such efforts lack the engagement needed to compete with influencers.

Tax warfare: a looming threat

Recent global tax changes indicate a shift towards "tax warfare," says Steven C. Wrappe, National Transfer Pricing Technical Leader at Grant Thornton LLP. The OECD's efforts to extend taxing rights to market countries have led to unilateral actions, such as digital services taxes (DSTs) and retaliatory tariffs. These measures aim to extract tax revenue from multinational companies (MNCs) operating in those jurisdictions. However, they risk creating double taxation and undermining traditional international tax policies.

INDUSTRY

FASB sets rules for green credits

The FASB has approved its first-ever requirements for how companies account for environmental credits like carbon offsets and renewable-energy certificates. The rule mandates that businesses apply a unified model to recognize credits when they are likely to be used or sold, recorded at cost. Disclosure requirements were scaled back after concerns from firms, though key expense-related data remains necessary. FASB Chairman Rich Jones said: “I think consistent accounting is the best way to improve transparency.” The rule takes effect for public companies in 2028 and private firms in 2029.

Accounting faces talent crisis

The accounting profession is experiencing a significant talent crisis, with a decline in students majoring in accounting and a sharp drop in CPA exam participation. This trend poses risks, including staffing shortages and challenges in financial reporting integrity. Factors contributing to this decline include the profession's image, the 150-hour CPA licensure requirement, and perceptions of reduced stability due to technological advancements. In response, firms are raising starting salaries, and universities are modernizing curricula to highlight technology and future skills. Coordinated reforms and a refreshed narrative about accounting's opportunities could help attract new talent and ensure the profession's vitality.

FASB proposes update to enhance expense reporting clarity

The FASB has proposed an Accounting Standards Update (ASU) aimed at improving the clarity of expense reporting for public business entities. This update, announced recently, seeks to provide investors with more comprehensive and transparent expense information. For accountants and auditors, this means a potential shift in how expense data is reported and analyzed, necessitating adjustments in financial reporting practices. The proposed changes could lead to more detailed disclosures, impacting how financial statements are prepared and reviewed. Stakeholders are encouraged to review the proposal and consider its implications for future reporting cycles

TECHNOLOGY

Ethical AI use in accounting: Aligning with Circular 230

An upcoming webinar will be hosted by CPA Practice Advisor on September 3, 2025. It will delve into the ethical responsibilities of using AI in the tax and accounting sectors. The discussion will focus on aligning AI applications with Circular 230 and professional ethical standards.

FIRMS

Sax expands with NJ CPA firm acquisition

Sax LLP, a top 70 accounting firm, announced its acquisition of Maddaloni, Nydick & Keenan, a CPA firm based in Florham Park, New Jersey. The deal is set to finalize on November 15. This acquisition signifies Sax's strategic expansion in the New Jersey market, potentially enhancing its service offerings and client base.

Anderson adds 460degrees

Andersen Consulting has announced the acquisition of 460degrees, a firm that provides specialized services in project delivery, strategic data management, transformation advisory, cybersecurity, and digital trust.

SMALL BUSINESS

Trump tariffs impact small businesses

The New York Times examines the challenges small businesses face due to tariffs imposed during the Trump administration. While large corporations can absorb costs, small and medium enterprises (SMEs) struggle with increased expenses on imported goods, affecting their competitiveness and profitability. The article notes that SMEs, lacking the financial buffers of larger firms, may face layoffs or closures. This economic strain is compounded by difficulties in passing costs to consumers, potentially leading to reduced market share and financial instability for these businesses.

ECONOMY

Producer prices surge amid tariffs

U.S. producer prices rose 0.9% in July - the sharpest monthly increase in over three years - driven largely by tariffs imposed by President Trump. Analysts had predicted a 0.2% rise. “New tariffs are continuing to generate cost pressures in the supply chain, which consumers will shoulder soon,” said Samuel Tombs of Pantheon Macroeconomics. Inflation concerns are mounting despite stable consumer prices, complicating the Federal Reserve’s decisions on interest rates. While Trump claims tariffs benefit U.S. manufacturers, economists warn they raise business and consumer costs. Treasury Secretary Scott Bessent has urged the Fed to cut rates despite inflation risks. 

Americans increasingly reluctant to move

Geographic and economic mobility in the U.S. has hit record lows, with only 7.8% of Americans moving in 2023. Challenges include unaffordable housing, dual-income households, and a tough job market, particularly for entry-level workers. “It’s been a nightmare,” said Josue Leon, who declined a low-paying job offer in Massachusetts due to lack of relocation support. Many remain in unsuitable homes or jobs, while others are locked in by “golden handcuffs” including low mortgage rates. Economist Chang-Tai Hsieh warns that stalled mobility may drag down national productivity and GDP growth.

CYBERSECURITY

UnitedHealth hack was largest healthcare data breach in the U.S.

A cyberattack on UnitedHealth Group's tech unit last year affected approximately 192.7m individuals, making it the largest healthcare data breach in the United States. Initially, the company estimated that the breach impacted 190m people, but updated figures were released by the U.S. Department of Health and Human Services. The attack, attributed to the "Blackcat" ransomware group, compromised sensitive information including health insurance IDs, patient diagnoses, and social security numbers.

INTERNATIONAL

Colombia cracks down on tax abuse

Camilo Rodríguez, Ricardo Ruiz, and Pedro Madera from KPMG Colombia discuss the evolution of tax abuse legislation in Colombia, particularly focusing on the General Anti-Avoidance Rule (GAAR) established by Law 1607 of 2012. The GAAR allows the Colombian tax authority to recharacterize transactions that lack genuine economic purpose and are primarily aimed at obtaining tax benefits. The authors note: "The current legal definition of tax abuse provides a framework to facilitate the GAAR’s application and ensure legal certainty." They highlight the challenges faced in implementing the GAAR, including instances where it has been misapplied. They stress the importance for taxpayers to conduct thorough anti-abuse analyses before significant transactions, given the potential for audits and the long review periods for tax returns in Colombia.
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