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27th January 2026
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THE HOT STORY

IRS eases penalties for millions of taxpayers

The IRS has provided relief from failure-to-pay penalties to nearly 5m taxpayers during the pandemic, as detailed in a report from TIGTA. The IRS temporarily suspended certain automated collection notices in February 2022, but penalties continued to accrue. In December 2023, the IRS announced it would waive these penalties for eligible taxpayers. TIGTA found that over 99% of eligible taxpayers received the relief. The IRS identified around 4.9m individuals and organizations eligible for approximately $1bn in penalty relief for tax years 2020 and 2021. Lia Colbert, commissioner of the IRS's Small Business/Self-Employed Division, stated: "We have already adjusted these taxpayers' accounts so that these taxpayers also benefit from the penalty relief." TIGTA recommended further actions to ensure all eligible taxpayers receive the relief.

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TAX

GOP pushes $100bn tax refund boost to sway 2026 voters

President Donald Trump and congressional Republicans have engineered a $100bn boost in tax refunds for 2026, aiming to win voter favor ahead of the midterm elections. The surge stems from retroactive provisions in the “One Big Beautiful Bill Act,” which expands tax cuts for middle-income households, tipped workers, and parents, while preserving benefits for high-income earners. The average refund is expected to jump by $1,000. The plan depends on the under-resourced IRS efficiently processing refunds despite staff cuts. While Republicans touted the windfall as a working families tax cut, Democrats criticized the move as a short-term political ploy that disproportionately benefits the wealthy. With the IRS under pressure and public approval of Mr. Trump’s economic leadership shaky, the GOP is banking on larger refunds to translate into electoral support.

IRS takes on welfare fraud

In a recent event, Treasury Secretary Scott Bessent praised the IRS Criminal Investigation (CI) division for its efforts in tackling welfare benefits fraud, stating: “They led the charge here” in Minnesota. Mr. Bessent highlighted the significant financial impact of fraud, noting that billions of dollars were diverted by criminals. The IRS is currently investigating multiple money services businesses and has initiated audits of financial institutions suspected of laundering fraud proceeds. Mr. Bessent emphasized the importance of prosecuting fraudsters to maintain the integrity of the tax system. He acknowledged the resource-intensive nature of these enforcement initiatives, stating that the IRS must balance its priorities during the busy filing season. Experts including Karen E. Kelly of Kostelanetz LLP noted that the IRS CI is adept at tracing financial movements, which is crucial for building cases against fraudsters. The government is committed to recovering stolen assets and preventing future fraud through enhanced controls and data analytics.

IRS opens 2026 tax filing season

The IRS has officially launched the 2026 tax filing season, accepting federal individual income tax returns for the 2025 tax year. Millions of taxpayers are expected to file, with many anticipating refunds. However, this year’s tax code changes, stemming from President Donald Trump's One Big Beautiful Bill Act, have complicated the filing process. John Hawkins, a certified public accountant, noted, “There’s a lot of nuance, a lot of detail,” highlighting the challenges taxpayers may face. Refunds are projected to increase by $300 to $1,000 on average, but new deductions come with specific income limits and exceptions. Taxpayers are encouraged to file electronically to expedite refunds, as the IRS has experienced staffing issues and processing delays. The average federal refund last year was $3,167, with expectations for higher amounts this year.

FIRMS

Treasury cuts ties with Booz Allen

The U.S. Treasury Department has terminated its contracts with Booz Allen Hamilton following the imprisonment of former contractor Charles Edward Littlejohn for leaking tax information about wealthy individuals, including Donald Trump. Mr. Littlejohn, sentenced to five years in prison, provided sensitive data to The New York Times and ProPublica, which prosecutors described as “unparalleled in the IRS's history.” Treasury Secretary Scott Bessent said that Booz Allen “failed to implement adequate safeguards to protect sensitive data.” The agency had 31 contracts with Booz Allen Hamilton, amounting to $4.8m in annual spending and $21m in total obligations.

BDO Canada acquires GrantMatch to expand incentive services

BDO Canada has acquired GrantMatch, a firm specializing in helping public and private sector clients secure government grants. Founded in 1994 as FairTax Recovery Consultants Ltd., GrantMatch tracks over 10,000 government programs and employs 35 people, who will now join BDO’s credits and incentives group. Financial details of the deal have not been disclosed.

ECONOMY

Durable goods orders jump most in six months, led by aircraft surge

U.S. durable goods orders rose 5.3% in November, the strongest increase in six months, driven by a sharp pickup in bookings for commercial aircraft and other business equipment, according to delayed Commerce Department data released after the federal shutdown. A key measure of business investment - core capital goods orders (excluding aircraft and defence) - increased 0.7%, beating expectations and signalling firmer underlying demand for equipment. Core shipments, a closer proxy for near-term business spending, also rose 0.4%. While headline aircraft orders are volatile, the report showed broadly higher demand across categories including communications equipment, computers, machinery, and electrical equipment, supporting the view that investment momentum strengthened heading into 2026.

Business optimism grows as AI expected to boost sales and productivity, NABE survey finds

U.S. business economists are increasingly optimistic about economic prospects, with 56% expecting higher sales in the next three months and recession fears easing, according to a new survey from the National Association for Business Economics (NABE). Capital spending remains strong, especially on artificial intelligence (AI), with 33% reporting increased investment - the highest share since July 2024. A majority (73%) of respondents anticipate AI will enhance productivity this year, while only 13% foresee a significant boost. Hiring trends remain stable, with many firms uncertain about AI's long-term impact on employment. Cost reduction and efficiency are the primary expected benefits of AI adoption.

CORPORATE

Minnesota’s biggest companies urge ‘de-escalation’ of tensions

In an open letter coordinated by the Minnesota Chamber of Commerce, chief executives from some of the state’s largest employers have called on federal, state and local officials to pull back from further confrontation following the fatal shooting of ICU nurse Alex Pretti by federal immigration agents in Minneapolis, and work together on a negotiated solution. The letter was signed by top executives of Minnesota’s largest companies and large hospital systems, including Land O’ Lakes, Hormel, U.S. Bancorp, Mayo Clinic and 3M. “Every chief executive...they want to have a peaceful environment for their employees,” said Bill George, the former chief executive of Medtronic, whose current chief signed the letter. “The larger issue for CEOs,” George added, is that the unrest in Minneapolis “is going to have a very negative effect on their growth, on their innovation and particularly their ability to recruit people from around the country and around the world.”

FAT Brands files for Chapter 11 as casual dining pressures mount

FAT Brands, the owner of restaurant chains including Fatburger, Johnny Rockets, and Twin Peaks, has filed for Chapter 11 bankruptcy in Texas, citing assets and liabilities each in the range of $1bn-$10bn. The filing follows a missed interest payment in October on about $1.2bn of securitized debt, prompting creditors to demand immediate repayment. The move adds to a wave of bankruptcies in the casual-dining sector, which has been weighed down by high debt levels and softer consumer demand. FAT Brands operates more than 2,300 restaurants globally and expanded aggressively in 2021 with acquisitions such as Fazoli’s and Twin Peaks. Major unsecured creditors include Sysco and DoorDash. The company has appointed restructuring officers as it seeks to reorganize its finances under court protection.

PERSONAL FINANCE

IRS extends retirement account amendment deadline

The IRS has announced an extension for making amendments to individual retirement accounts, Simplified Employee Pension arrangements, and Savings Incentive Match Plan for Employees IRA plans until December 31st 2027. According to Notice 2026-09, this extension is part of the guidance under the SECURE 2.0 Act of 2022. The IRS and the Treasury Department are currently developing model language for IRA trustees and custodians to ensure compliance with various retirement-related regulations. The notice emphasizes that the deadline for amendments is now set to December 31st 2027, or a later date as determined by the Treasury Secretary.

HEALTHCARE

Trump administration proposes near-flat Medicare Advantage payments

The Trump administration has proposed a modest 0.09% average payment increase for Medicare Advantage plans in 2027, far below Wall Street’s expected 4%–6% hike. The move caused steep after-hours stock declines for major health insurers including UnitedHealth (-9%), Humana (-12%), and CVS Health (-9%). The Centers for Medicare and Medicaid Services (CMS) also plans to eliminate a lucrative billing tactic: using unlinked chart reviews to justify higher payments for diagnoses not tied to specific medical services. This change alone would reduce payments by 1.53 percentage points. While CMS says the proposal improves payment accuracy and competition, industry groups warn it could lead to benefit cuts and higher costs for the 35 million Medicare Advantage enrollees. Final rates will be set in April after further data analysis.

TECHNOLOGY

AI use at work has increased

According to a recent Gallup Workforce survey, 12% of American workers use artificial intelligence (AI) daily in their jobs. The survey, which included over 22,000 participants, revealed that about 25% use AI frequently, while nearly half do so at least a few times a year. This marks a significant increase from 2023, when only 21% reported using AI occasionally. Workers in technology and finance sectors lead in AI adoption, with many citing improved efficiency.
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