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Accountancy Slice
USA
6th November 2025
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THE HOT STORY

SCOTUS appears skeptical of legal basis for Trump tariffs

U.S. Supreme Court justices on Wednesday appeared skeptical of President Donald Trump’s broad use of the 1977 International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs, suggesting the justices may curtail or overturn a key element of his economic agenda. Conservative justices, including Neil Gorsuch and John Roberts, joined liberals in questioning whether the law grants the president near-unlimited power over trade, with Gorsuch warning it could allow Congress to abdicate its constitutional duties. The case, which concerns tariffs Trump imposed citing national emergencies like drug trafficking and trade deficits, could have major implications for executive power, trade policy, and household costs. The administration argues the tariffs are legal under IEEPA’s language on regulating imports, but critics say they breach the “major questions” doctrine due to the lack of explicit congressional authorization. While a decision isn't expected immediately, questioning during the argument suggested that the tariffs may not survive the challenge, which would force the Trump administration to rely on other authorities to deploy levies on a similar scale.

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TAX

Axe comes down on IRS Direct File program

The Trump administration has confirmed that the IRS Direct File program, which allowed taxpayers to file returns electronically for free, will not be available in Filing Season 2026. Despite its initial success, with 296,531 accepted returns in 2025, the program faced criticism from Republican lawmakers and commercial tax preparation companies. Treasury Secretary Scott Bessent emphasized that there are “better alternatives” to Direct File, suggesting that the private sector could provide superior services. The program, developed during Joe Biden's presidency, was intended to simplify tax filing but has now been discontinued, leaving many taxpayers to seek other options. According to the Treasury, taxpayers spend an average of 13 hours and $270 preparing their tax returns each year. The IRS’ free Direct File program was hugely popular, with 90% of respondents in one survey rating the program above average or excellent.

Penalty relief offered to employers regarding tips, overtime

The IRS and the Treasury Department have announced penalty relief for employers regarding new information reporting requirements for cash tips and qualified overtime compensation for tax year 2025. Under Notice 2025-62, employers will not face penalties for failing to file correct information returns or provide accurate payee statements, as long as they submit complete and correct returns. The One Big Beautiful Bill Act allows individual taxpayers to deduct qualified tips and overtime compensation through 2028, with a maximum deduction of $25,000 for tips and $12,500 for overtime. The IRS encourages employers to provide detailed accounting of tips and overtime to help employees claim these deductions. "Tax year 2025 will be treated as a transition period," the IRS said, acknowledging that employers may lack the necessary information for compliance.

IRS CI reforms: a troubling trend?

Recent reports indicate that the Trump administration is contemplating significant reforms to the IRS Criminal Investigation (CI) division, potentially placing political allies in leadership roles and diminishing the role of IRS lawyers in case evaluations. Gary Shapley, a former IRS-CI supervisory special agent, is reportedly aiming to replace current CI chief Guy Ficco, and has identified various left-leaning organizations, including George Soros's Open Society Foundations, as targets for investigation. The proposed changes, while not yet formally announced, raise concerns about political interference in tax enforcement. Legal safeguards currently exist to prevent such politicization, and experts warn that taxpayers should remain vigilant against potential scrutiny. Practitioners are advised to monitor developments closely and ensure compliance with established protocols.

INDUSTRY

Investment firms reshape accounting firms' futures

Private equity firms (PEFs) are significantly influencing the accounting industry by investing in larger CPA firms to enhance their technology and talent. These investments often focus on AI software and training. In 2024 alone, seven out of 11 transactions involved substantial investments, such as Hellman and Friedman’s $900m in Baker Tilly. These changes may lead CPA firms to adopt more technology-driven hiring practices and restructure operations to improve efficiency. The shift towards AI is prompting firms to seek tech-savvy graduates, as traditional accounting roles evolve. Alan Reinstein, a professor emeritus in the School of Business Administration at Wayne State University in Detroit, emphasizes that “successful accounting education programs will likely continue to place increasing emphasis on technology, critical thinking, and adaptability.” As the industry adapts, weaker programs may struggle to remain relevant amidst rising competition and changing demands.

FIRMS

Deloitte joins forces with Snowflake

Deloitte has announced an expanded strategic alliance with Snowflake, an artificial intelligence data cloud company, to enhance tax data management solutions. The collaboration aims to address cloud modernization challenges and provide innovative data solutions for tax departments. Carin Giuliante, chair and chief executive of Deloitte Tax, said: “Together, we will empower our clients with cutting-edge data management capabilities.” The partnership will focus on developing common data models, standardized reporting, and GenAI data readiness to streamline tax processes and improve accuracy.

ECONOMY

Private payrolls added 42,000 jobs last month

A new report from payroll-processor ADP found that employment at private companies was stronger than expected in October, with companies adding 42,000 jobs for the month, following a decline of 29,000 in September, and beating expectations among analysts polled by the Wall Street Journal for 22,000 new roles. The largest job gains were spread across industries such as trade, transportation and utilities, which added 47,000 roles, education and health services at 26,000, and financial activities at 11,000. Conversely, the information sector lost 17,000 jobs, 15,000 went at professional and business servicess, and 6,000 were cut in leisure and hospitality. All of the job creation came from companies employing at least 250 workers. That category added 76,000 jobs, while smaller businesses lost 34,000. “While big companies make headlines, small companies drive hiring,” commented ADP chief economist Nela Richardson. “So to see that weakness at the small company level is still a concern, and I think that’s one of the reasons why the recovery has been so tepid.”

U.S. services sector activity returns to growth territory

U.S. services sector activity returned to growth in October, according to the Institute for Supply Management (ISM), with new orders accelerating despite concerns among firms surrounding the government shutdown and tariffs. The ISM's purchasing managers index for services providers climbed to 52.4 in October from 50.0 in September, reaching its highest point since February. Of the industries surveyed, 11 reported growth last month, one more than in September, while the number reporting contraction decreased to six from seven, ISM said. Meanwhile, the index for prices was the highest since October 2022, highlighting continued inflationary pressures on the sector. Meanwhile, S&P Global's U.S. Services PMI rose to 54.8 in October, up from 54.2 in September, marking 33 consecutive months of expansion but coming in below the forecast of 55.2. Chris Williamson, chief business economist at S&P Global Market Intelligence, said that the data signals continued momentum in the U.S. economy, with services and manufacturing growing at a pace suggesting annualized GDP growth of around 2.5%.

LEGAL

Auto parts manufacturer files lawsuit against former CEO

The management team and creditors of First Brands have filed a lawsuit against founder and chief executive Patrick James, alleging he misappropriated over $2bn before the company declared bankruptcy in September. The lawsuit claims James engaged in extravagant spending, including purchasing luxury cars and homes, and even hired a private chef for $500,000. It is alleged that he secured debt financing based on fraudulent invoices and transferred substantial amounts to his personal accounts, including $8m to his son-in-law's wellness company. James, who resigned shortly after the bankruptcy filing, denies the allegations.

REGULATORY

JPMorgan discloses U.S. inquiry into alleged debanking practices

The U.S. government is investigating whether JPMorgan Chase provided fair banking access to its customers, as the White House cracks down on "debanking" practices allegedly targeting conservative public figures. Jonathan Gould, head of the Office of the Comptroller of the Currency, said Tuesday that he is looking to ensure that large banks have abandoned previous policies that may have contributed to the debanking of certain industries or clients.

Olivier Amar sentenced to more than five years for defrauding JPMorgan

Olivier Amar, the chief growth officer of failed student finance start-up Frank, has been sentenced to more than five years in prison after being convicted of defrauding JPMorgan Chase. The sentencing of Amar came a month after Charlie Javice, the founder of Frank, was sentenced to seven years in prison. U.S. District Judge Alvin Hellerstein in Manhattan said Amar was “intimately involved in the fraud,” including the creation of documents that falsely claimed the company had over 4 million young customers when it actually had fewer than 400,000.

AUDIT & REPORTING

Revolutionizing the month-end close process

The month-end close, traditionally a rigid accounting ritual, is being challenged as outdated. Modern technology has rendered the old batch-processing constraints obsolete, allowing for real-time updates and automated reconciliations. The 2025 AICPA Survey on Continuous Finance highlights that firms adopting automated reconciliation have seen a 60%-70% reduction in manual workload. The shift enables finance teams to maintain current books rather than scrambling at month-end. Continuous close models allow for daily reconciliations and immediate exception handling, transforming the close into a more efficient process. As a result, the focus shifts from retrospective confirmation to real-time monitoring, making the work more actionable and valuable. Transitioning to this model doesn't require a complete overhaul but rather a strategic automation of key processes.

TOOLS

Avi AI aims to streamline tax processes

Avalara has unveiled its Avi AI, evolving from a chatbot to a comprehensive AI agent designed to manage a network of AI agents for tax and compliance tasks. The Agentic Tax and Compliance platform automates core functions such as tax determination, filing, and exemption certificate validation, ensuring human oversight at critical checkpoints. The platform allows third-party AI agents to collaborate securely, enhancing its functionality. Access points include integrations with Microsoft Outlook and NetSuite, with a global rollout planned for the fourth quarter, and early access programs already in place with select enterprise partners.

CRYPTO

Transforming cryptocurrency taxation in America

U.S. Rep. Max Miller (R-OH) is set to introduce a comprehensive cryptocurrency tax bill alongside Rep. Steven Horsford, aiming to reshape digital asset regulation in the U.S. The legislation seeks to clarify tax treatment for various crypto activities, including “airdrops” and lending protocols, while establishing a new “de minimis” rule for small transactions. Mr. Miller emphasized the need for clear federal guidance on digital assets, warning of potential market exposure without it. He believes that the U.S. can lead in digital assets by backing cryptocurrencies with the dollar, enhancing investment opportunities and competition with China. The bill is expected to complement existing regulations like the GENIUS Act, which governs stablecoins. Mr. Miller is currently gathering public feedback and plans to release preliminary text soon.

INTERNATIONAL

IFRS Foundation faces financial crisis

The IFRS Foundation, responsible for global accounting and sustainability reporting standards, is facing significant financial challenges. Michel Madelain, managing director, announced that the foundation could lose £5m ($6.5m) in fiscal year 2025, following a previous loss of £1.6m. To address these issues, Madelain has initiated a cost-cutting program and emphasized the need for stable, long-term funding sources, moving away from reliance on voluntary donations. He explained: "the foundation needed to replace voluntary donations from government and private sources with stable, long-term funding arrangements."
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