Accountancy Slice
Become informed in minutes...
Accountancy Slice
USA
24th December 2025
 

THE HOT STORY

IRS faces major staffing crisis

Seventeen Senate Democrats, led by Elizabeth Warren and Angus King, have expressed their "serious concerns" regarding the IRS's preparedness for the upcoming tax season. They warned that taxpayers "may face delays and difficulties in filing returns and receiving refunds." The IRS has lost up to 25% of its staff, including experienced personnel, and has seen significant leadership turnover. A report from the Treasury Inspector General for Tax Administration highlighted that workforce reductions could impact key processing programs and customer service. John Koskinen, a former IRS commissioner, predicted challenges in taxpayer service, saying: "I think the level of taxpayer service is going to be very difficult to deal with." The IRS's Zero Paper Initiative, aimed at improving processing, is already delayed, further complicating the situation.

TAX

Tax season turmoil: Refunds set to soar

The 2025 tax bill's retroactive features are projected to lead to record refunds, with an estimated $91bn increase during the 2026 filing season, according to Piper Sandler Cos. This would raise total refunds to $370bn, a 37% increase from 2025. House Ways and Means Committee Chair Jason Smith said: “In our tax relief bill, Republicans wasted no time and ensured that we cut taxes on income earned this year.” However, the IRS faces challenges due to high turnover and staffing cuts, with Richard E. Neal noting the agency is “rudderless” as it approaches tax season. The potential for delays in refunds could impact the economy ahead of the midterm elections, as House Ways and Means Oversight Subcommittee Chair David Schweikert suggested that late refunds might align with election timing.

One Big Beautiful Bill reshapes tax landscape

The One Big Beautiful Bill Act introduces sweeping changes to the tax code, impacting CPAs and financial planners with new rate brackets, expanded deductions, and exemptions. The Act notably alters QBI deductions, SALT deduction caps, and bonus depreciation rules. Avantax by Cetera highlights these shifts in a webinar, emphasizing the need for strategic client advising. "Understanding the new framework is critical," said Avantax Planning Partners, Inc. The bill's implications are significant, with permanent changes set to affect tax planning strategies nationwide by 2026.

Tax law changes spark confusion

The recent tax and spending package signed into law on July 4 reinstates immediate expensing for domestic research and experimental expenditures under Section 174 of the federal tax code, effective for tax years starting after December 31, 2024. This change addresses the complications introduced by the 2017 Tax Cuts and Jobs Act, which mandated amortization for research costs. However, states have created a fragmented landscape with varying conformity rules. As noted by Sanjay Keswani, a manager at Plante Moran: "The federal government has made Section 174 coherent again," but states have adopted different approaches, leading to complexities for taxpayers. Bloomberg emphasizes the importance of understanding each state's position on tax conformity to navigate these changes effectively.

IRS makes whistleblowing easier

The IRS has introduced a new digital Form 211, "Application for Award for Original Information," allowing individuals to report tax noncompliance electronically. This initiative aims to reduce transcription errors and costs while enhancing the taxpayer experience. Erick Martinez, acting director of the Whistleblower Office, said: "With the launch of the digital Form 211, whistleblowers can easily share what they know with the IRS from their phone or laptop." Since its inception in 2007, the Whistleblower Office has awarded over $1.4bn based on information leading to the collection of more than $7.86bn. While the IRS will still accept paper submissions, it encourages the use of the new electronic form.

IRS updates interest deduction rules

The IRS has revised its FAQs regarding the limitation on business interest deductibility, reflecting changes from the GOP's recent tax-and-spending law. The updates clarify key aspects of Section 163(j), which restricts companies' interest deductions to 30% of their adjusted taxable income. Notable changes include the gross-receipts threshold for companies affected by the limit, the definition of business interest, and the treatment of nondeductible interest carryforwards. 

INDUSTRY

Tax pros face pricing challenges

According to the 2025 National Fee Survey from the National Association of Tax Professionals, the accounting industry is experiencing a steady demand for tax preparation and consulting services. However, challenges such as pricing concerns and a shortage of preparers are emerging. Chris Smith, president of the Virginia NATP Chapter, noted: "The rising number of retiring preparers enables charging higher fees with little option for clients to choose others." The survey revealed that tax preparation constitutes 65% of average practice revenue, with many firms increasing fees annually. Melissa Bowman, an EA, emphasized the importance of recognizing one's value, stating: "Be firm in your pricing." As the industry evolves, preparers are encouraged to improve workflows and maintain strong pricing strategies to adapt to the changing landscape.

CPA mobility reform gains traction

The fragmented CPA licensing system across 55 U.S. jurisdictions is undergoing reform to address modern challenges. Washington State has introduced flexible pathways for CPA licensure, allowing candidates with a bachelor's degree to qualify with two years of experience, while those with a master's or 150-hour requirement need just one year. This shift aims to reduce barriers for diverse candidates. Barry Melancon, CEO of the AICPA, said: "We expect significant pushback from the industry," as states adapt to these changes. The reform seeks to enhance CPA mobility and maintain professional integrity.

Celebrating accounting's most powerful women

The CPA Practice Advisor has unveiled the recipients of the 2025 Most Powerful Women in Accounting awards, now in their 14th year. These awards honor women who have made significant contributions to the accounting profession. Gail Perry, CPA and editor-in-chief, stated: “Each year, we have the opportunity to recognize women who are making the accounting profession a better place for all of us.” The selection process involves nominations from peers and evaluation by independent judges, focusing primarily on U.S. leaders. Danielle Supkis Cheek, VP at Caseware, emphasized the importance of innovation and mentorship in the profession, stating: “Receiving this recognition . . . is a great honor and an opportunity to highlight the importance of innovation, mentorship and community support.” The list of awardees includes notable figures such as Amy Boland, Adriana Carpenter, and Sarah Elliott, among others.

REGULATORY

New enforcement chief takes charge

The PCAOB has appointed William Ryan as the acting director of its Division of Enforcement and Investigations. Ryan, who has been with the PCAOB since 2007 and previously served as the Enforcement Division's chief counsel, will oversee investigations and enforcement of the board's rules and securities regulations. He is stepping in for Robert Rice, the outgoing Enforcement Director, who is retiring on December 31. George Botic, the PCAOB acting Chair, commended Ryan's experience and leadership in this critical role.

FIRMS

PwC's AI training revolutionizes onboarding

PwC has launched a new training program aimed at early-career associates, focusing on integrating artificial intelligence (AI) tools into their daily tasks. The program, which began piloting in October, will be fully rolled out by July. Margaret Burke, PwC's firmwide talent acquisition and development leader, said: “We truly believe that the role of the new associate will be changing with AI and that their role will become somewhat elevated.” The training sessions emphasize hands-on experience, collaboration, and critical thinking, preparing associates to adapt to the evolving landscape of their roles. Burke and Krishnan Chandrasekhar, PwC's U.S. tax leader, highlighted the importance of blending technical skills with human judgment and creativity. As AI continues to transform the workplace, PwC said it aims to equip its new hires with the necessary skills to thrive in this changing environment.

LEGAL

Business group's challenge to Trump's $100,000 H-1B visa fee is rejected

U.S. District Judge Beryl Howell in Washington, D.C. has rejected a challenge from the U.S. Chamber of Commerce that President Donald Trump's $100,000 fee on new H-1B visas for highly skilled foreign workers conflicts with federal immigration law and will lead many employers to cut jobs and the services they provide to the public. "The parties’ vigorous debate over the ultimate wisdom of this political judgment is not within the province of the courts," wrote Howell, an appointee of Democratic former President Barack Obama. "So long as the actions dictated by the policy decision and articulated in the Proclamation fit within the confines of the law, the Proclamation must be upheld."

Democratic states challenge CFPB funding cuts

Democratic-led states have filed a lawsuit against the Trump administration to prevent cuts to the Consumer Financial Protection Bureau (CFPB). The coalition, comprising 21 states and the District of Columbia, argues that the refusal to request funding from the Federal Reserve undermines Congress' authority. New York Attorney General Letitia James said: "The administration's actions are a handout to those who drive up costs by cheating hardworking Americans." The CFPB, established in 2011, has returned over $21bn to consumers and faces funding challenges due to the Fed's losses since 2022.

EEOC must meet high legal bar to prove DEI policies discriminate

Interviews with more than a dozen corporate legal and compliance experts suggest that the Equal Employment Opportunity Commission (EEOC) has a high bar to clear to prove companies' diversity, equity and inclusion (DEI) policies violate discrimination law, Reuters reports. New EEOC chair Andrea Lucas told Reuters last week that the agency plans to launch inquiries into corporate DEI practices to find out whether employers made race or sex-based decisions - but former EEOC chair Jenny Yang says it still has to build a case and convince the courts that a company's programs run afoul of the law.
Industry Slice

Accountancy Slice delivers the latest, most relevant and useful intelligence to accountants, practice owners, auditors, CFOs and accounting influencers, each weekday morning.

Content is selected to an exacting brief from hundreds of influential media sources and summarised by experienced journalists into an easy-to-read digest email. Accountancy Slice enhances the performance and decision-making capabilities of individuals and teams by delivering the relevant news, innovations and knowledge in a cost-effective way.

If you are interested in sponsorship opportunities within Accountancy Slice, please get in touch via email sales team

Follow us on FacebookFollow us on XFollow us on Linkedin

This e-mail has been sent to [[EMAIL_TO]]

Click here to unsubscribe