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Accountancy Slice
USA
2nd July 2026
 

THE HOT STORY

Ways and Means advances package of tax administration reform bills

The House Ways and Means Committee has advanced seven bipartisan tax administration bills aimed at modernizing the Internal Revenue Service, strengthening taxpayer protections, and improving transparency. The measures include extending tax filing relief for Americans held hostage overseas, restoring tax deductions for fraud victims, authorizing the National Taxpayer Advocate to file amicus briefs in federal court, launching an artificial intelligence pilot program to detect fraudulent tax returns, cracking down on fraudulent "ghost" tax preparers, creating a fellowship program to recruit private-sector data scientists to the IRS, and requiring tax-exempt hospitals to provide more detailed reporting on community benefits, executive compensation, and billing practices. While supporters said the legislation would improve fairness, efficiency, and accountability, hospital groups opposed the transparency proposal, arguing it would impose significant administrative burdens on nonprofit health systems.

TAX

House Oversight chair seeks IRS action on tax-delinquent federal employees

House Oversight Committee Chair James Comer (R-KY) is pressing the IRS for more information on federal employees and retirees with unpaid taxes, citing an inspector general report showing tax delinquency rates rose from 4.9% to 6.9% between 2021 and 2024, with outstanding liabilities reaching $6.3bn. Comer also highlighted that around 50,000 delinquent current and former federal workers failed to file tax returns during the period, urged stronger enforcement, and requested details on the IRS's use of the Federal Payment Levy Program, which can garnish federal salaries and certain other payments to collect overdue taxes.

IRS steps up transfer pricing penalty enforcement despite taxpayer documentation

The IRS has significantly increased its use of transfer pricing penalties in recent years, routinely asserting them even when multinational companies have maintained contemporaneous documentation supporting their intercompany pricing, marking a departure from its historical focus on income adjustments rather than penalties. Tax experts argue that recent court decisions, including the 2025 Perrigo ruling, reaffirm that well-prepared documentation from qualified advisers remains a strong defense, making the quality of transfer pricing documentation more important than ever as the IRS adopts a more aggressive enforcement approach.

Boston updates senior property tax exemption to keep pace with inflation

Boston has adopted a new rule that will automatically adjust income and asset eligibility thresholds for its senior property tax exemption each year based on inflation, helping older homeowners on fixed incomes retain access to a $1,000 to $2,000 property tax credit as Social Security and retirement incomes rise. The change, signed by Mayor Michelle Wu, takes effect for 2027 eligibility, while the mayor continues to push broader property tax reforms and an expansion of senior tax relief that remain pending in the Massachusetts Legislature.

INDUSTRY

FASB proposes new fair value rules

The FASB has proposed an update to accounting standards that would change how investment companies measure the fair value of equity securities with contractual sale restrictions. Currently, under Topic 820, entities do not consider these restrictions when determining fair value, which can lead to inflated net asset values and distorted performance reporting. The proposed amendments would require investment companies to factor in these restrictions and disclose the associated discount. FASB believes this change will enhance the usefulness of financial reporting by aligning fair value measurements with market participant valuations. Stakeholders are invited to provide feedback on the proposal by July 17th 2026.

FIRMS

CLA expands Pacific Northwest presence through Perkins & Co. acquisition

CliftonLarsonAllen (CLA) has expanded its presence in the Pacific Northwest by acquiring Perkins & Co., a Portland, Oregon-based accounting firm with more than 200 professionals and offices in Portland and Vancouver, Washington, effective July 1st. Financial terms were not disclosed. The acquisition, CLA's third of 2026, broadens its tax, audit, and advisory capabilities across Oregon and Washington, while Perkins & Co. said joining CLA's independent partnership model will provide greater growth opportunities for clients and employees without disrupting existing client relationships.

ECONOMY

Construction spending edged higher in May as homebuilding remains weak

U.S. construction spending rose 0.1% in May, matching economists' expectations, but was down 1.5% from a year earlier as higher mortgage rates continued to weigh on residential construction. The Commerce Department noted that private construction spending was flat, with a 0.3% increase in renovation activity offsetting a 0.1% decline in new single-family homebuilding, which fell 4% year over year. Higher mortgage rates, driven in part by rising oil prices following the conflict involving Iran, pushed the average 30-year fixed mortgage rate to 6.49% last week. Meanwhile, private nonresidential construction declined 0.3%, led by a 1.3% drop in factory construction, while public construction spending increased 0.5%, supported by higher state, local, and federal government investment.

U.S. factory activity continued to expand in June

U.S. manufacturing activity expanded for a sixth consecutive month in June, although growth slowed modestly. The Institute for Supply Management's (ISM) Purchasing Managers' Index (PMI) fell to 53.3 from 54.0 in May, below economists' expectations of 53.9, but remained above the 50-point threshold that signals expansion. New orders and production continued to grow, albeit at a slower pace than in the previous month, while the prices index remained in expansion despite declining 9.1 points from May. Supplier deliveries slowed for a seventh straight month, and employment improved but continued to indicate contraction. According to Susan Spence, chair of the ISM Manufacturing Business Survey Committee, sentiment remained cautious, with 34% of survey comments positive and 66% negative. Respondents cited higher raw material costs linked to the conflict in Iran, particularly for oil-based products such as adhesives.

LEGAL

IRS halts removal of union materials after legal challenge

The IRS has agreed to stop confiscating National Treasury Employees Union (NTEU) materials from employee workstations and common areas after the union sued, alleging the agency violated workers' First Amendment rights. Under the agreement, the IRS will pause enforcement of its directive, allow employees to display union materials again, return confiscated items where possible, and provide the union with five days' notice before reinstating any similar policy.

Court holds corporate officer personally liable for insolvent company’s unpaid taxes

A federal district court has held the sole director, president, and treasurer of Lehcim Holdings personally liable for nearly $1.9m in unpaid federal taxes after finding he authorized more than $8.8m in transfers to a private creditor while the company was insolvent and aware of its tax debt. The court ruled that the transfers violated the Federal Priority Statute, which requires federal claims to take precedence over private creditors when an insolvent debtor’s assets are distributed.

SMALL BUSINESS

Small business hiring strengthens as wage growth remains subdued

Small business employment increased for the fourth consecutive month in June, according to Paychex, with the strongest gains in the West and the leisure and hospitality sector, while education and health services also recorded solid job growth. However, hourly wage growth remained below 3% for the 20th straight month, as Paychex noted continued strength in new business formation, potentially driven by AI and corporate layoffs, while advising businesses to monitor upcoming federal AI legislation and numerous state-level regulatory changes taking effect in July.

REGULATORY

Kevin Warsh vows ‘no changes’ to Fed independence

Federal Reserve Chairman Kevin Warsh has insisted there would be “no changes” to U.S. central bank independence as he pledged that the Fed would take a strident approach to tackling inflation. Warsh said he will stick firmly to a 2% inflation target and "disappoint" anyone who expects loose monetary policy despite ​President Donald Trump's call for interest rate cuts. "If people thought this central bank was going to be comfortable with an inflation objective above 2%, they would be disappointed," Warsh said at the European Central Bank’s annual gathering of international policymakers and economists in Sintra, Portugal. He added that "we have been an independent central bank for a long time. We are going to be an independent central bank at this moment and you will see no changes on that." 

White House accelerates plans for AI model standards

The U.S. government is in advanced talks with AI companies to create voluntary standards for the release of new models. The guidance could be announced as soon as next week.

PERSONAL FINANCE

Treasury selects State Street, BlackRock, and Vanguard ETFs for Trump Accounts

The U.S. Treasury has selected exchange-traded funds from State Street, BlackRock, and Vanguard for the new Trump Accounts program, with the State Street SPDR Portfolio S&P 500 ETF (SPYM) serving as the default investment option at launch. Under the initiative, the Treasury will deposit $1,000 into an investment account for every eligible child born between 2025 and 2028, while additional investment options will include BlackRock's iShares Core S&P 500 ETF (IVV) and iShares Core S&P Total U.S. Stock Market ETF (ITOT), State Street's SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM), and the Vanguard Total Stock Market ETF (VTI). Several investment firms, including BlackRock, have also committed to matching the government's $1,000 contribution for eligible employees' children.

WORKFORCE

Practitioner-led initiative aims to boost accounting careers by reaching students in high school

The Four-Stage High School Initiative, developed by the University of Nebraska at Omaha's School of Accounting, aims to inspire high school students to consider careers in accounting. The initiative addresses the lack of awareness among students about the diverse opportunities in the accounting field. "High school is where career dreams are formed (or dismissed)," the authors note, emphasizing the need for early engagement. The initiative includes a standing advisory board of early-career professionals, immersive camps like Accounting Adventures, and biannual mini camps to provide students with hands-on experiences. Feedback indicates a growing interest in accounting, with many students expressing a desire to pursue a degree in the field. The initiative not only aims to spark interest but also to sustain it through dual-credit courses and ongoing support for educators.

Some companies regret AI-driven layoffs and are rehiring

CNBC reports on companies that have walked back their hiring plans after rapidly changing their minds that artificial intelligence can “do it all,” to focus more on human capital. Ford has rehired hundreds of experienced human engineers to work on quality issues that automated systems couldn’t fix, and Commonwealth Bank of Australia and IBM are also said to be refocusing on human capital after making layoffs while investing in AI. IBM replaced its HR functions with AI that handled around 94% of routine requests but was unable to meet the other 6%, which included ethical dilemmas. “Budgeting on ‘tech to replace humans’ without investing in training or upskilling left teams unprepared to leverage AI,” a report from Intuition Labs observed. “Notably, among companies pushing automation, many later ‘regretted’ layoffs, having cut the very people needed to oversee AI,” it added.

INTERNATIONAL

U.S. declines to renew North American trade pact

The Trump administration has declined to renew the U.S.-Mexico-Canada Agreement (USMCA) in its current form following its mandatory six-year review, leaving the trade pact in force for up to another 10 years with annual reviews while negotiations continue over proposed changes. The move starts the countdown towards the agreement's expiry unless all three countries agree to a revised version. The U.S. is seeking tougher North American rules of origin for automobiles and other industrial goods, aiming to reshore manufacturing, reduce trade deficits and limit China's access to the regional trading bloc. Talks with Mexico are due to resume later this month, and Canada has also pledged to continue negotiations while seeking relief from U.S. tariffs on steel, aluminum, vehicles and lumber. The USMCA underpins around $1.6tn of annual trade between the three countries, and industry groups, including automakers and agricultural exporters, have urged governments to preserve the agreement.
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