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Accountancy Slice
USA
19th January 2026
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THE HOT STORY

IRS drops final version of Form 708

The IRS has released final Form 708, enforcing a 40% transfer tax on U.S. recipients of gifts or inheritances from "covered expatriates" — former citizens or long-term residents who renounced status after 2008 and met wealth or compliance thresholds. The tax applies to worldwide assets received from January 1, 2025, and is paid by the recipient, not the donor. Limited exclusions and a $19,000 annual allowance apply, making the rules highly significant for cross-border estate planning.

TAX PLANNING GUIDE

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TAX

Warrior Dividend paid to 1.5m U.S. service members

The IRS has confirmed that the $1,776 "Warrior Dividend" paid to around 1.5m U.S. service members in December 2025 is tax-free. Classified as a qualified military benefit, the payment is excluded from taxable income. The bonus was announced by President Donald Trump to recognise military service and mark 250 years of the U.S. armed forces.

Florida candidate proposes 50% OnlyFans tax

James Fishback, a Republican gubernatorial candidate in Florida, has proposed a 50% "sin tax" on income from OnlyFans, as he aims to deter adult content creation. He said: "The purpose of the sin tax in economics is to disincentivize and deter a behavior." Fishback claims this tax could generate $200m to fund crisis pregnancy centers and mental health initiatives. He criticized OnlyFans creator Sophie Rain, calling her "exploited," while Rain responded, labeling Fishback's proposal as "the dumbest thing [she's] ever heard of." Fishback, a hedge fund manager, is currently trailing frontrunner Byron Donalds by 34 percentage points in the race for governor.

LA firefighters push for sales tax hike

One year after a devastating fire in Pacific Palisades, the United Firefighters of Los Angeles City Local 112 has initiated a ballot measure to increase the city's sales tax by half a cent. This increase, raising the tax from 9.75% to 10.25%, aims to generate over $300m annually for the Los Angeles Fire Department (LAFD). The funds will be allocated for new fire stations, hiring more firefighters, and acquiring essential equipment. The initiative could potentially raise $10bn by 2050, allowing for the construction of 30 new stations and an increase of over 1,000 firefighters. Mayor Karen Bass supports the measure, as she highlighted the need for new revenue sources to enhance fire services in Los Angeles.

Wisconsin workers get tax break boost

On January 15th, the Wisconsin Assembly passed bills that would exempt state income tax on tips and a portion of overtime pay, following a federal provision. Assembly Speaker Robin Vos said: "Today, we have an opportunity to address these challenges and make life more affordable for hard-working Wisconsin workers." The GOP bill, introduced by Rep. Ron Tusler, would exempt cash and charged tips from state income tax for tax years 2025 to 2028. Additionally, Rep. Paul Melotik's bill allows workers to deduct up to $12,500 in overtime pay for single filers and $25,000 for joint filers, with no expiration date. Democratic Gov. Tony Evers had proposed a similar measure in his budget, but it was removed by Republicans. Evers expressed willingness to consider the new bills while seeking a more universal tax relief policy.

INDUSTRY

Tax advocacy triumphs in 2025

In 2025, the AICPA Tax Division achieved significant advocacy successes, including the enactment of seven AICPA-supported bills and the elimination of a proposed federal provision affecting state passthrough entity tax regimes. The division submitted over 68 comments and engaged in discussions with Treasury and IRS officials on tax guidance. Notable achievements included the endorsement of 19 bills, with four enacted in the One Big Beautiful Bill Act (H.R. 1 P.L. 119-21). Eileen Reichenberg Sherr, CPA, CGMA, noted: "AICPA advocacy affects federal tax legislation," highlighting the importance of their efforts in shaping tax policy. Looking ahead, the AICPA plans to continue its advocacy in 2026, focusing on the implementation of enacted legislation and proposed tax regulations.

2026: A new era for accounting marketing

As the accounting profession evolves, firms are rethinking their marketing strategies to foster sustained growth in a competitive landscape. By 2026, successful marketing will hinge on clarity, alignment, and impact rather than sheer output. High-performing teams will integrate firm strategy, market demands, and client insights to drive growth. The article emphasizes that "marketing in 2026 is no longer just a support function; it has become a strategic growth capability." Firms must focus on clear differentiation to build trust and attract the right clients, especially as AI-driven search changes visibility dynamics. The shift towards integrated teams and authority-based marketing is crucial, as firms that effectively coordinate marketing, business development, and data will thrive. Ultimately, those that understand their identity and commit to a cohesive growth system will lead the way.

ECONOMY

U.S. homebuilder sentiment falls again in January amid affordability and supply strains

U.S. homebuilder confidence declined in January, with the National Association of Home Builders (NAHB) index falling two points to 37, marking the 21st consecutive month below the breakeven level of 50. Affordability concerns, elevated mortgage rates, and supply-side challenges such as labor shortages, high material costs, and regulatory pressures continue to weigh on the housing market. While a recent drop in mortgage rates offers some relief, builders are still contending with weak buyer traffic and a surplus of unsold new homes. "While the upper end of the housing market is holding steady, affordability conditions are taking a toll on the lower and mid-range sectors," said NAHB chair Buddy Hughes. "Buyers are concerned about high home prices and mortgage rates, with down payments particularly challenging given elevated price-to-income ratios."

Industrial production rose 0.4% in December, beating expectations

U.S. industrial production rose by 0.4% in December, significantly outpacing economists’ forecast of a 0.1% gain, according to Federal Reserve data. The increase was driven largely by a 2.6% surge in utilities output, rebounding from a decline in November. November's figure was also revised upward to 0.4%, indicating stronger momentum in the sector.

PERSONAL FINANCE

Student loan garnishments paused as Trump administration reshapes repayment rules

The Department of Education has postponed involuntary collection actions, including wage garnishments and tax refund seizures, for defaulted federal student loan borrowers. The delay, part of the Trump administration's rollout of the Working Families Tax Cut Act, aims to give the department more time to implement new repayment options and pathways out of default. Originally set to resume garnishments in January, the move affects millions of borrowers and follows mounting pressure from advocacy groups over the impact on financially vulnerable individuals.

LEGAL

Weiss faces tax claim turmoil

Jefferies Strategic Investments LLC has initiated a lawsuit to reduce the repayment priority of $176m in tax claims against hedge fund manager George Weiss during his bankruptcy proceedings. Jefferies argues that paying the IRS in full for taxes owed from nearly two decades ago would hinder Weiss's ability to create a viable bankruptcy exit plan. In a complaint filed in the U.S. Bankruptcy Court for the Southern District of Florida, Jefferies highlighted that Weiss, who has a $113m largely unsecured judgment against him, is retired, lacks a source of income, and cannot meet the IRS claims.

HEALTHCARE

California health care advocates seek funding

California health care advocates and progressive lawmakers are urging Gov. Gavin Newsom and the Legislature to secure new funding for medical care and social services for low-income and disabled residents. The coalition, “Fight for Our Health,” is demanding action to address funding cuts made by President Donald Trump and Republicans. The Medi-Cal program, which has a budget of nearly $200bn, faces significant cuts, potentially affecting 522,000 Californians in the 2026-2027 fiscal year. Judy Mark, president of Disability Voices United, emphasized, “You have the power to protect us.” As discussions of a wealth tax and corporate tax emerge, Newsom is caught between raising taxes or allowing benefits to lapse. The urgency for new funding options is clear as advocates prioritize replacing lost federal funding this legislative session.

STRATEGY

2026: A new era for accounting marketing

As the accounting profession evolves, firms are rethinking their marketing strategies to foster sustained growth in a competitive landscape. By 2026, successful marketing will hinge on clarity, alignment, and impact rather than sheer output. High-performing teams will integrate firm strategy, market demands, and client insights to drive growth. This article emphasizes that "marketing in 2026 is no longer just a support function; it has become a strategic growth capability." Firms must focus on clear differentiation to build trust and attract the right clients, especially as AI-driven search changes visibility dynamics. The shift towards integrated teams and authority-based marketing is crucial, as firms that effectively coordinate marketing, business development, and data will thrive. Ultimately, those that understand their identity and commit to a cohesive growth system will lead the way.

INTERNATIONAL

Trump to hit European nations with increased tariffs

President Trump has announced plans to impose 10% tariffs on imports from several European countries from February 1, escalating to 25% by June, to pressure Denmark into approving a U.S. acquisition of Greenland. The proposed tariffs would apply to goods from Denmark, the U.K., France, Germany and other European states, and would remain until a deal is reached. Trump argues Greenland is strategically vital for U.S. security, citing concerns about China and Russia. Denmark and Greenland have rejected the idea, with Greenland’s prime minister saying residents oppose U.S. control. European leaders warned the tariffs would damage transatlantic relations and risk retaliation. The move could also complicate existing U.S.-E.U. trade agreements and faces legal and political uncertainty in Washington.

AND FINALLY...

Billionaire's bold plan for Palm Beach

Billionaire Stephen Ross is positioning Palm Beach County as a new tech hub, claiming it offers a more favorable business environment than California. In an interview with Bloomberg News, Mr. Ross stated: "The venture capitalists kind of want to get out of California because of the restrictions that are there." He has invested significantly in West Palm Beach, including a record $772m construction loan for new office towers. Ross is also instrumental in attracting educational institutions, donating $50m to Vanderbilt University for a new campus. He believes South Florida's connection to the defense industry presents further growth opportunities, saying: "That will be a big growth factor here." Despite challenges in attracting young talent, Ross says he is committed to transforming the area into a vibrant destination for tech companies and their employees.
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