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Accountancy Slice
USA
25th March 2026
 

THE HOT STORY

Refund delays hit 1.4m taxpayers

Over 1.4m taxpayers are facing delays in receiving their tax refunds due to the IRS' requirement for direct deposit information. This number is increasing by 300,000 weekly, prompting concerns from lawmakers. House Ways and Means Committee members Danny Davis and Terri A. Sewell expressed their worries in a letter to Treasury Secretary Scott Bessent, stating: "Our first and foremost concern is that taxpayers could face a 10-week wait for their paper refunds." The IRS has been sending notices to those who did not provide banking details, leading to significant confusion and frustration among taxpayers. Many are struggling to reach IRS customer service for assistance, as the provided phone number leads to an automated system rather than live support. Tax professionals are advising clients to provide direct deposit information to avoid lengthy delays.

TAX

IRS invites input for 2026–27 priority guidance plan

The Treasury Department and the IRS are requesting stakeholder recommendations for the 2026-2027 Priority Guidance Plan, which will address key tax issues through various forms of administrative guidance. The IRS emphasized the importance of public input, saying: “Published guidance plays an important role in increasing voluntary compliance by helping to clarify ambiguous areas of the tax law.” Stakeholders have until May to submit their suggestions electronically via the Federal eRulemaking Portal or by mail. The IRS encourages taxpayers to describe their recommendations clearly and explain their significance, particularly how they could reduce taxpayer burdens or improve tax administration.

New York's estate tax proposal under scrutiny

New York City Mayor Zohran Mamdani's proposal to reduce the estate tax exemption threshold to $750,000 has ignited significant controversy. The plan highlights the disparity in how the tax code treats inherited wealth compared to earned income. As Andrew Leahey, an assistant professor at Drexel Kline School of Law, points out: "Estate taxes can help limit the accumulation of inherited wealth; they just need to be properly calibrated." Critics argue that the low threshold could unfairly impact middle-class homeowners and small businesses, rather than solely targeting the wealthy. The current estate tax law's structure, which imposes steep penalties for estates just above the exemption, further complicates the issue. To effectively address wealth inequality, the estate tax system must be refined to ensure fairness and avoid unintended consequences.

Ohio GOP pushes for capital gains tax elimination

An Ohio Republican lawmaker, Rep. Tom Young, has introduced House Bill 617, aiming to eliminate state income taxes on capital gains, which could cost the state up to $680m annually. Young argues that this change would foster business growth and investment in Ohio, saying: “This bill removes state income tax on capital gains so Ohio stops penalizing investment and long-term growth.” The Legislative Service Commission estimates that the state could lose between $615m and $679.8m in tax revenue by 2028. While the Ohio Chamber of Commerce supports the bill, critics argue it primarily benefits wealthier residents. The bill must pass both the Ohio House and Senate before reaching Governor Mike DeWine's desk.

INDUSTRY

Why expertise matters more as tax rules become more complex

As tax season unfolds, professionals are witnessing an increase in clients expecting straightforward deductions, only to find the rules are more complex than anticipated. Many taxpayers rely on paid tax preparers to navigate these intricate regulations, as "the need for knowledgeable and ethical professionals becomes even more important." The bipartisan Taxpayer Assistance and Service Act aims to enhance oversight and continuing education for tax preparers, ensuring they stay updated with evolving laws. This commitment to education not only aids taxpayers in avoiding errors but also upholds the profession's reputation. As tax laws continue to change, the role of competent tax professionals remains crucial in guiding individuals through the complexities of the tax system.

FIRMS

KPMG Canada appoints first AI research head

KPMG Canada has appointed Andrew Forde as its first Head of AI Research, a newly created role aimed at applying advances in Canadian artificial intelligence research to practical business challenges. Forde, a partner in the firm’s Technology Strategy and Digital Transformation practice and a former NASA scientist, will focus on strengthening collaboration between industry, academia, and the public sector, while developing ties with universities and AI labs. The firm said the role is intended to bring greater scientific rigour to client solutions and accelerate the commercialisation of AI.

ECONOMY

U.S. business activity hits 11-month low as Iran war fuels inflation pressures

U.S. business activity has slowed to its lowest level in 11 months, with the S&P Global Composite PMI falling to 51.4 in March from 51.9 in February, as rising energy costs and heightened uncertainty linked to the Iran conflict weighed on demand. The slowdown was driven primarily by the services sector, where activity weakened more than expected, while manufacturing showed a modest improvement, partly due to easing tariff pressures. At the same time, private-sector employment contracted for the first time in over a year, reflecting companies cutting costs and reducing hiring amid a more uncertain economic outlook. Inflationary pressures intensified sharply, with input prices rising to 63.2 and output prices also increasing, as businesses passed on higher costs driven largely by a more than 30% surge in oil prices and a near $1 increase in gasoline prices. The data suggests consumer inflation could accelerate toward 4%, complicating the Federal Reserve’s policy path.

Q4 productivity growth revised lower but underlying trend remains resilient

U.S. worker productivity growth was revised down more sharply than expected to an annualized 1.8% in the fourth quarter, from an initial estimate of 2.8%, reflecting weaker economic output following a downgrade to GDP growth. Despite the softer quarterly reading, the broader trend remains solid, with productivity rising 2.5% year-on-year and averaging around 2.1% since 2019, suggesting underlying efficiency gains in the economy. However, the revision was accompanied by a significant increase in unit labor costs, which rose at a 4.4% rate, as stronger-than-expected hourly wage growth, up 6.3%, outpaced productivity gains. The rise in labor costs has raised concerns about inflation, with economists noting that sustained increases at this pace would be inconsistent with the Federal Reserve’s 2% target, though some expect the pressure to ease as the labor market softens.

AUDIT & REPORTING

IRS audits of large partnerships plummet

The IRS has significantly reduced its examination of large partnership tax filings due to staffing shortages and resource constraints, as highlighted in a recent report by TIGTA. The report reveals that while large partnership filings surged from over 140,500 in 2011 to nearly 335,000 in 2023, examination rates plummeted from 2.7% to below 0.1%. Despite efforts to enhance audits under former IRS commissioner Danny Werfel, budget cuts and staffing reductions have hindered progress. The IRS issued 483 soft letters regarding balance sheet discrepancies, but many responses were inadequate or unreturned. "The IRS will need to reassess their exam coverage goals for large partnerships following the reduced staffing," the report states. TIGTA recommends that the IRS streamline future projects to eliminate duplicative steps and ensure all large partnership returns are assessed for risk. The IRS has agreed to these recommendations and plans corrective actions.

LEGAL

Musk lawyers try to bar judge over LinkedIn ‘like’ cheering legal defeat

Lawyers for Elon Musk want Delaware judge Kathaleen McCormick to step back from cases involving the billionaire entrepreneur, after her account “liked” a LinkedIn post celebrating his recent legal defeat.

TECHNOLOGY

AI could deepen wealth inequality, warns Fink

BlackRock chief executive Larry Fink has cautioned that artificial intelligence (AI) could exacerbate wealth inequality. In his annual letter to shareholders, he noted that the benefits of AI might concentrate among a few businesses and investors, leaving many behind. Fink stated: "The massive wealth created . . . flowed mostly to people who already owned financial assets." He emphasized the need for broader participation in AI's economic growth, highlighting that investment firms are financing significant data center expansions to support the technology.

BLOCKCHAIN

NYSE partners with Securitize to develop tokenized securities platform

The New York Stock Exchange is partnering with digital asset ​company Securitize to help create tokenized versions of ‌traditional financial securities. Securitize will serve as the first digital transfer agent eligible to create blockchain-based securities for issuers of corporate and ​exchange-traded funds on an upcoming NYSE-affiliated Digital Trading ​Platform, the company said.

AND FINALLY...

Easter spending set to hit record $25bn

U.S. consumers are expected to spend a record $24.9bn on Easter in 2026, according to a new report from the National Retail Federation (NRF), up 5.5% year-on-year, with average spending per person reaching $195.59 as households continue to prioritize holiday celebrations despite ongoing economic uncertainty. Food is set to account for the largest share of spending at $7.5bn, followed by candy at $3.5bn and gifts, reflecting the holiday’s strong focus on traditional gatherings and family occasions. Industry data suggests demand remains resilient even among non-celebrants, with over half planning to take advantage of Easter-related promotions, while the NRF noted that holidays continue to drive consumer spending as families seek opportunities to connect and celebrate.
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