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Accountancy Slice
USA
24th March 2026
 

THE HOT STORY

Accounting firm growth hits five-year low

The average growth rate for accounting and financial services firms has decreased from a peak of 13% to below 10%, marking the lowest level in five years, according to a recent study by Hinge Marketing. The study surveyed 133 firms, revealing that high-growth firms achieved a median growth rate of 33.4%, while average-growth firms grew by 9.6%, and no-growth firms contracted by 10%. High-growth firms are investing 9% of their revenue in marketing, nearly double that of no-growth firms, and are leveraging artificial intelligence tools for content creation and market research. "The vast majority of firms across all growth categories use LinkedIn," the study noted, highlighting the importance of social media in their marketing strategies.

TAX

New tax deduction guidance issued by IRS

The IRS has released Revenue Procedure 2026-17, providing essential guidance for businesses to leverage new tax breaks from the One Big Beautiful Bill Act. This procedure allows companies to withdraw previous elections under Section 163(j)(7) of the Tax Code, which pertains to business interest limitations, and to make late elections under Section 168(k)(7) to avoid bonus depreciation. Ed Zollars of Thomas, Zollars & Lynch noted: "For tax professionals advising clients on the business interest deduction limitation, Revenue Procedure 2026-17 offers crucial administrative relief." The guidance is expected to benefit many companies and their tax advisors significantly.

IRS miscalculates Direct File costs

The IRS significantly overestimated the costs of the Direct File tax preparation program, which was terminated for the current tax season, according to a new TIGTA report. Initially projected to cost $61.2m for Fiscal Year 2025, the actual cost was only $16.2m as of May 2025. The report highlighted that the IRS's cost estimates excluded various support functions. Despite the program's expansion to 25 states and an increase in eligible taxpayers to over 32m, only 751,000 registered, with 59% not using it to file. "Lower than expected usage was attributed to confusion about availability and a lack of outreach," the report stated. Improvements were made to reduce rejected returns, but the program was ultimately suspended.

New bill aims to exempt National Guard and Reserve drill pay from federal taxes

The “No Tax on Drill Pay Act,” introduced by Rep. Andy Barr, R-Ky., aims to exempt federal income taxes on drill pay for National Guard and Reserve members. This legislation, which has the support of over 800,000 service members, is designed to enhance recruitment and retention while alleviating financial burdens on military families. Rep. Zach Nunn emphasized the importance of this bill, saying: “I hear from Iowa Guardsmen and their families about the financial strain that comes with that commitment.” Additionally, a separate bill is being considered in Alabama to exempt the first $5,000 of drill pay from state income taxes.

Property tax concerns rise among voters

Recent polling by Marquette University Law School reveals a significant shift in Wisconsin voters' priorities regarding property taxes and school funding. In a February survey, 60% of respondents prioritized reducing property tax bills over funding for K-12 schools, marking the highest concern for property taxes in over a decade. Charles Franklin, director of the poll, noted that this change began around 2018, with voters increasingly worried about rising property tax bills amid inflation and higher home values. The poll also indicated that 63% of voters want a substantial portion of the budget surplus allocated for property tax relief. As the November elections approach, the debate over property taxes and school funding is expected to dominate discussions among candidates.

FIRMS

PwC appoints two external directors to global governance board

PwC International has appointed Neil Parekh and Mads Nipper as external directors to its Global Governance Board, strengthening oversight of the firm’s global network. Their appointments increase the number of external board members to three, alongside Jaya Vaidhyanathan, as PwC continues to enhance its governance structure.

U.S. court overturns FTC order against Intuit over TurboTax ‘free’ ads

A U.S. appeals court has thrown out a Federal Trade Commission order barring Intuit from advertising TurboTax as “free,” ruling that the agency’s use of an administrative law judge to decide deceptive advertising claims violated constitutional separation of powers. The court said the FTC must instead pursue such cases in federal court, while returning the matter for further proceedings, leaving unresolved allegations that Intuit misled consumers over eligibility for its free tax products.

ECONOMY

U.S. construction spending misses expectations as sector faces ongoing pressure

U.S. construction spending fell 0.3% in January, the Commerce Department reported on Monday, undershooting expectations for a 0.1% increase and highlighting continued weakness in the sector despite a modest rebound at the end of 2025. While December saw a 0.3% monthly rise driven by residential activity, broader trends remain subdued, with full-year spending down 1.4% and declines in both residential and non-residential construction. The sector continues to face headwinds including high mortgage rates, rising material costs linked to tariffs and labor shortages, although public construction has provided some support with modest growth.

REGULATORY

SEC's former enforcement chief clashed with bosses over Trump cases

Reuters reports that SEC Enforcement Division Director Margaret Ryan - who resigned last week after just over six months in the role - had clashed with agency leaders over the direction of its enforcement program, including the handling of cases with ties to President ​Donald Trump and his family, according to three people familiar with the matter. Ryan wished for a more aggressive pursuit of charges for fraud and other misconduct including in cases that touched the president's circle, but faced resistance from the likes of SEC chair Paul Atkins, two of the people said.

RISK & COMPLIANCE

Department of Education launches portal to disclose foreign funding in universities

The U.S. Department of Education has introduced a new online portal requiring colleges and universities to disclose foreign funding, as it aims to improve transparency and enforce compliance with federal reporting laws. The initiative, tied to Executive Order 14282, comes amid concerns over foreign influence in U.S. education, with $72.1bn in funding already disclosed across 559 institutions, including $5.2bn reported in 2025 alone. The department also released data showing more than 8,300 foreign funding transactions in 2025, with Qatar the largest source at $1.1bn, followed by countries including the United Kingdom, China, Switzerland, and Japan. Officials emphasized that institutions have a legal obligation to report foreign gifts exceeding $250,000, while critics have long argued that enforcement has been insufficient.

TECHNOLOGY

Companies keep core software but layer AI tools on top

Large corporations are resisting the idea of replacing core enterprise software with artificial intelligence (AI), instead maintaining systems such as SAP, Salesforce and Workday while exploring how AI can enhance them. Technology leaders say these platforms remain too complex and critical to replicate, particularly given regulatory, operational and maintenance challenges. Instead, companies are increasingly using AI coding tools to build smaller, customised applications and automate workflows on top of existing systems, a trend often referred to as “vibe-coding”. This approach allows businesses to reduce costs, avoid expensive software upgrades and exert pricing pressure on vendors, while focusing internal resources on areas that provide competitive advantage. Over time, executives expect AI agents to become the primary interface for interacting with enterprise software, shifting traditional applications into more of a data backbone role rather than replacing them entirely.

INTERNATIONAL

Middle East conflict creates new pressures for tax teams

The ongoing conflict in the Middle East has created significant challenges for businesses and tax teams in the region. Tuhin Chaturvedi, a tax partner at RSM in Kuwait, highlights that "tax teams should proactively forecast upcoming corporate tax payments at the earliest possible time." With tax-return deadlines approaching - April 15 in Kuwait and April 30 in Oman, Qatar, and Saudi Arabia - companies are facing liquidity issues and must explore options to mitigate penalties. The conflict has also led to potential new permanent establishments due to employee relocations and project delays. As the situation evolves, tax professionals remain uncertain about whether authorities will extend deadlines, emphasizing the need for vigilance and strategic planning.

AND FINALLY...

Workers impressed by corporate jargon 'may be worse at their jobs'

A study by Cornell University has found that employees who are impressed by corporate jargon may struggle with effective decision-making. “There's a lot of useful things about the way people in a certain company speak to each other. But it becomes problematic when that turns into nonsense that's used for misleading purposes,” Shane Littrell, a postdoctoral researcher and cognitive psychologist at Cornell University who authored the study, said. “It's the people that can't tell the difference that seem to have the most problems.” The research indicates that those susceptible to corporate jargon often display lower analytical thinking and problem-solving skills. The study highlights the need for awareness of how corporate jargon can mislead even highly educated professionals.
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