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Accountancy Slice
USA
9th February 2026
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THE HOT STORY

Why inflation risks are running hot again

Economists expect a moderate rise in January inflation, but many on Wall Street are bracing for a hotter-than-forecast reading. Consumer prices have a history of spiking early in the year, as businesses often raise fees, reverse holiday discounts, or reset prices in January. While official data is seasonally adjusted to smooth these patterns, economists say lingering “residual seasonality” still pushes January inflation higher than other months. This year, tariffs could add to the pressure, particularly if retailers pass higher import costs on to consumers during post-holiday price adjustments. Recent data from Adobe shows broad-based price increases in online goods such as electronics and appliances, which are heavily import-dependent. However, economists caution that a one-off January bump may not signal sustained inflation, as many companies remain wary of raising prices amid cost-conscious consumers and growing competition.

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TAX

Iowa's cancer crisis: tax hike proposed

Iowa Gov. Kim Reynolds is advocating for an increase in the state's cigarette and tobacco taxes as part of a broader initiative to address the state's alarming cancer rates. Iowa has the second highest rate of new cancers in the U.S., prompting a comprehensive study by the University of Iowa College of Public Health and the Iowa Department of Health and Human Services. Reynolds said: "The good news is that each of us can change our behaviors to reduce our risk," emphasizing the importance of understanding cancer's complex causes. The proposed tax changes include raising the cigarette tax from $1.36 to $2.01 and implementing a 15% tax on vape and consumable hemp products. The study's initial findings revealed that 2,582 more Iowans were diagnosed with cancer in 2022 than expected, with significant rates of lung cancer being particularly concerning. The state plans to allocate $183m over five years for cancer treatment and prevention, aiming to improve access to care in rural areas.

Wisconsin retirees enjoy bigger tax breaks

Wisconsin has increased the retirement income subtraction for seniors filing state income taxes. Retirees aged 67 and older can now deduct up to $24,000 from their taxable retirement income, with joint filers able to claim $48,000. This change, part of a $1.3bn tax cut plan approved in the state budget, aims to retain seniors in Wisconsin. "The higher amounts . . . were approved in the two-year state budget signed in July," which eliminated previous income restrictions. Approximately 577,000 residents aged 67 or older will benefit, with many expected to see significant tax reductions. Joint filers may save an average of $1,242, while single filers could save around $705. Other tax changes include expanded income brackets and increased deductions for adoption expenses.

INDUSTRY

Why CEOs are treating employee benefits as a CFO-level strategy

Rising healthcare costs and limited transparency are pushing chief executives to move employee benefits oversight from HR to the finance chief. Benefits make up nearly 30% of compensation, yet many companies manage them reactively due to complex plan designs and lack of data. Shifting benefits oversight to finance enables scenario modeling based on workforce data, clearer identification of cost drivers and more predictable expense management. This approach can improve both employee satisfaction and EBITDA, while signaling operational discipline to investors and acquirers.

FIRMS

General Catalyst invests $65m in Accrual

General Catalyst, a prominent venture capital firm, is expanding its reach into the accounting sector by investing $65m in Accrual, an AI-driven startup. This funding is part of a larger $75m investment round aimed at revolutionizing traditional accounting practices. Marc Bhargava, managing director at General Catalyst, stated: "We had this thesis three years ago around applied AI," emphasizing the potential for AI to enhance productivity in legacy industries. Accrual, founded by former leaders from Brex and Stripe, is currently focused on individual tax returns but plans to branch into business taxes and advisory services. The startup collaborates with firms like H&R Block and may consider acquisitions in the future to accelerate growth.

ECONOMY

U.S. consumer credit jumped sharply in December

U.S. consumer borrowing rose by $24bn in December, the largest monthly increase in a year, driven by a surge in both credit-card and non-revolving loans, according to Federal Reserve data. Credit-card balances jumped by $13.8bn, the biggest rise in more than two years, while non-revolving credit climbed $10.2bn, reflecting holiday spending but also raising concerns about household finances amid slowing income growth and growing unease over the labor market.

CORPORATE

Amazon’s tax bill slashed as Trump-era law supercharges deductions

Amazon sharply reduced its U.S. corporate tax bill in 2025 after benefiting from tax breaks in President Trump’s new tax law, even as its domestic profits surged. The company’s current U.S. tax expense fell to $1.2bn from $9bn a year earlier, while pretax U.S. profit jumped 44.5% to $89.5bn. On a cash basis, Amazon paid $2.8bn in federal income taxes, down from more than $7bn in each of the prior two years. The savings stem largely from two changes in the law: immediate deductions for certain capital investments, including data-center equipment, and the restoration of full, upfront deductions for domestic research spending. Amazon, which spent about $340bn in the U.S. last year, said the provisions were designed to encourage investment and innovation and reflected its heavy domestic spending. While Amazon’s current U.S. taxes fell, its global effective tax rate rose to 19.6% as profits increased and research credits declined. The company said the law mainly shifts the timing of tax payments rather than reducing them permanently and expects similar effects in 2026 as it ramps up capital spending, particularly on artificial intelligence.

Dorsey’s Block cutting up to 10% of staff

Jack Dorsey's fintech Block is weighing cutting up to 10% of its workforce during annual performance reviews. The company missed Wall Street estimates for third-quarter profit amid persistent economic uncertainty and intensifying competition in the payments sector, Reuters notes.

LEGAL

Judge is asked to dismiss Altice lawsuit

Lenders to Altice USA, including Apollo Capital Management, BlackRock Financial Management and Oaktree Capital Management, have asked a federal judge in New York to throw out a lawsuit which accuses them of colluding to shut the company - now known as Optimum Communications - out of the U.S. credit market. The motion argues that Altice is wrongly trying to block creditors from working together when a borrower tries to renegotiate. Altice USA is attempting “to weaponize the antitrust laws” to gain an advantage in debt talks, the petitioners said. “But antitrust law protects competition - not a borrower’s desire for leverage in renegotiating its liabilities in times of distress.” They argued that courts in similar cases have said that U.S. antitrust law does not apply.

DEI

U.S. Appeals Court clears way for Trump administration to enforce DEI ban

A U.S. federal appeals court has rejected a legal challenge seeking to block President Donald Trump’s executive orders banning diversity, equity and inclusion (DEI) programs across federal agencies and among businesses that contract with the government. The 4th U.S. Circuit Court of Appeals overturned a lower court injunction that had paused enforcement of the orders, allowing the administration to proceed with eliminating DEI initiatives and requiring contractors and grant recipients to certify they do not operate such programs. The court said the directives cannot be challenged in broad terms, but may be contested later based on how individual agencies apply them. The lawsuit was brought by the city of Baltimore and higher-education groups, which argued the orders violated constitutional free speech and due process protections. The decision leaves the door open for future legal challenges tied to specific enforcement actions.

CYBERSECURITY

U.S. pushes cybersecurity overhaul as China and Russia escalate digital threats

The U.S. government is stepping up efforts to strengthen cybersecurity as Chinese and Russian cyber operations intensify, according to recent congressional testimony and policy moves. Senior defense officials told lawmakers that the Department of War’s Cyber Force Generation Plan, launched in late 2025, aims to better organize, train and equip cyber forces to defend critical infrastructure and improve offensive and defensive capabilities. Cybersecurity has been elevated as a top national security priority under the Trump administration, amid growing concerns over state-backed hacking, data breaches and influence operations by China, Russia and Iran. Recent attacks on U.S. government agencies, energy infrastructure and major corporations have underscored vulnerabilities, prompting tougher sanctions and closer public-private cooperation.

TECHNOLOGY

Continuous tax and finance transformation in the age of AI

EY's 2025 Tax and Finance Operations survey highlights a critical moment for tax and finance functions as they adopt generative and agentic artificial intelligence (AI). While 86% of leaders prioritize data and technology, 80% face foundational data issues that hinder reliable AI outcomes. The survey reveals that 79% of executives aim to leverage AI for broader business insights, yet many struggle with data silos. “We are not yet at the place where we would use AI to make a tax filing,” noted a CFO, indicating the cautious approach to AI adoption. Despite challenges, 81% of respondents plan significant operational changes in response to global pressures. To thrive, tax and finance teams must modernize their operating models, focusing on trusted data and strategic partnerships to drive innovation and value in the AI era.

CRYPTO

Crypto treasury firms face contagion risk as market rout deepens

Publicly traded crypto-hoarding companies are emerging as a new source of risk for digital-asset markets after a sharp selloff that has cut Bitcoin prices nearly in half from their October peak above $126,000. These firms, known as digital-asset treasuries (DATs), built their business models on accumulating cryptocurrencies to drive equity premiums, but that strategy is now under strain amid the worst crypto downturn since the FTX collapse. Bitcoin’s slump has already erased nearly $2 trillion from the broader crypto market, and DAT stocks have fared even worse, with median share prices down about 62% over the past year. Some firms have already sold portions of their holdings to repay debt or buy back shares, highlighting vulnerabilities in the model. Analysts say the most exposed DATs are those holding illiquid tokens or lacking sustainable businesses, while companies with operating revenues or equity-funded purchases are better positioned to survive the downturn.

INTERNATIONAL

Shell appoints PwC as new auditor, replacing EY from 2027

Shell has selected PwC as its new external auditor following a competitive tender process, to replace EY from 2027. The decision comes after scrutiny of EY’s audit work, including an investigation opened by the UK’s Financial Reporting Council into EY’s audit of Shell’s 2024 accounts over potential breaches of audit partner rotation rules. Shell previously disclosed that EY had failed to comply with both UK and U.S. partner rotation requirements, prompting the company to amend its 2023 and 2024 annual reports, though the underlying financial statements were not affected. Shell said its Audit and Risk Committee based the auditor change on standard selection criteria, including independence, audit team quality, scope and regulatory compliance.

AND FINALLY...

Record number of employees to miss work today, poll suggests

An estimated 26.2m U.S. employees will miss work the day after the Super Bowl and about 4.9m workers plan to arrive late to work without giving their managers advance notice, according to UKG's annual Super Bowl Absenteeism Survey. The absences could cost upwards of $5.2bn in lost work and productivity, UKG said. "We are not advocating for it to be a holiday but a lot of people treat it as such," said Julie Develin, Senior Partner, Human Insights at UKG, a global AI platform for HR, pay, and workforce management.
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