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House committee advances IRS tax legislation

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2 years ago

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The House Ways and Means Committee passed a set of bipartisan bills aimed at improving tax filing and administration at the Internal Revenue Service.

Two of the bills, which were backed by the American Institute of CPAs, would treat electronic tax filing and payments the same as paper equivalents, and require the IRS to explain to taxpayers any reassessment due to alleged math errors. 

The Electronic Filing and Payment Fairness Act would apply the “mailbox rule” to electronically submitted tax returns and payments. Currently, documents and payments properly addressed and sent through the U.S. mail by the due date are considered to be timely, even if they’re received later, which is known as the “mailbox rule.” The legislation would expand that rule to include electronically submitted documents and payments that are submitted by the due date, even if the IRS processes them at a later date.

The Electronic Filing and Payment Fairness Act would enable payments electronically submitted to the IRS to be treated the same as those sent through the mail. In fiscal year 2023, over 213 million—79% of all filings— returns and other forms were filed electronically. The bill would enable electronic payments and documents that are submitted by midnight on the due date to be considered timely. The bill passed the committee by a unanimous vote of 41-0.

The IRS Math and Taxpayer Help Act aims to improve the transparency of the IRS in addressing and rectifying simple accounting mistakes on taxpayers’ returns. The Internal Revenue Code allows the IRS to make “math error” corrections, which are expedited adjustments to tax returns containing simple math or clerical errors. The bill would require the IRS to notify taxpayers of the specific reasoning for math errors and provide 60 days to challenge the IRS’s assessment of the alleged error. 

Each year, the IRS sends millions of “math error” notices to taxpayers that propose to adjust their tax liabilities. But the notices often don’t explain the reasons for the adjustments, and some are never received by the taxpayer due to lost mail. The IRS is not currently required to inform taxpayers that they must dispute the adjustments within 60 days if they disagree or generally forfeit their right to do so. As a result, many taxpayers fail to dispute the IRS assessment. The bill would require the IRS to ensure all math error notices provide a clear explanation of the alleged error including showing the mathematical change and informing taxpayers they have 60 days to challenge the alleged math error. The bill passed the committee by a unanimous vote of 43-0.

“The AICPA is pleased that these bills have been included in the markup and is encouraged by the momentum generated by these provisions moving forward in a bipartisan way,” said Melanie Lauridsen, vice president of tax policy and advocacy for the AICPA, in a statement Wednesday. “These policies are common-sense reforms that will significantly help taxpayers, tax practitioners and tax administration, and we assert our strong support for these bills. We look forward to continuing our work with the committee to advance comprehensive proposals to achieve these goals.”

The bills were also part of a set of IRS administrative proposals that were included late last month in a bipartisan discussion draft by leaders of the Senate Finance Committee, chairman Mike Crapo, R-Idaho, and ranking member Ron Wyden, D-Oregon. 

The House Ways and Means Committee also advanced several other bills in the package. One would help protect the independence of the National Taxpayer Advocate at the IRS.

The National Taxpayer Advocate Enhancement Act of 2025 would prevent IRS interference with National Taxpayer Advocate personnel by granting the NTA responsibility for its employees. In advocating for taxpayer rights, the National Taxpayer Advocate often requires independent legal advice, its proponents noted. Currently, staff hired by the National Taxpayer Advocate is accountable to internal IRS counsel, not the Taxpayer Advocate, creating a potential conflict of interest to the detriment of the taxpayer. The bill authorizes the National Taxpayer Advocate to hire attorneys who report directly to her, helping establish independence from the IRS. The bill passed the committee by a unanimous vote of 43-0.

The Recovery of Stolen Checks Act would require the IRS to create a process for taxpayers to request a replacement via direct deposit for a stolen paper check. If a check is determined to be stolen or lost, and not cashed, a taxpayer will receive a replacement check once the original check is cancelled, however many taxpayers are having their replacement checks stolen as well. Taxpayers who have a check stolen are then unable to request that the replacement check be sent via direct deposit. The bill would require the Treasury Secretary to establish processes and procedures under which taxpayers, who are otherwise eligible to receive an amount by paper check in replacement of a lost or stolen paper check, may elect to receive such amount by direct deposit. The bill passed the committee by a unanimous vote of 41-0.

The Pandemic Unemployment Fraud Enforcement Act would extend the statute of limitations for CARES Act-related unemployment insurance fraud from five to 10 years. The statute of limitations for prosecuting fraud in COVID-era pandemic unemployment insurance programs expires on March 27, 2025. After this date, Congress cannot retroactively change the statute of limitations on criminal prosecutions. The bill would extend the statute of limitations for criminal prosecution and civil enforcement actions in pandemic unemployment programs from five to 10 years. The bill passed the committee by a more divided vote of 24 to 18.

“The statute of limitations for these investigations runs out in 43 days on March 27,” said House Ways and Means Committee chairman Jason Smith, R-Missouri. “If we don’t extend the statute of limitations, those that perpetrated the greatest theft of taxpayer dollars in American history will not be brought to justice.”

Taxes on seniors

Separately, Rep. Nicole Malliotakis, R-New York, a member of the House Ways and Means Committee, introduced two pieces of legislation Monday to reduce the tax burden on seniors.

The Bonus Tax Relief for America’s Seniors Act, would amend the Tax Code to increase the additional bonus deduction for seniors age 65 and over from $1,950 to $5,000 for single filers, and from $3,100 to $10,000 for married couples. On average, this bipartisan legislation would reduce federal taxes by $2,100 for married couples filing jointly earning $85,000 per year.

The Tax Relief Unleashed for Seniors by Trump (TRUST) Act, would increase the amount of income that is tax exempt and index the threshold to inflation, allowing seniors to keep more of their benefits. The legislation would double current exempt income from $25,000 to $50,000 for single filers and from $32,000 to $64,000 for married couples age 65 and older.

“Our seniors have worked hard and paid taxes their whole lives and they should be able to keep more of their Social Security and retirement income without Uncle Sam trying to reach into their pockets again,” Malliotakis said in a statement. “Many of our seniors have been crushed by inflation, and are being forced to stretch their retirement savings further than ever before. The bills I’m introducing today would reduce the tax burden on our seniors, keep more money in their pockets and allow them to retire with greater financial security.”

Estate tax

Over in the Senate, a group of 46 Senate Republicans reintroduced legislation the Death Tax Repeal Act on Thursday to eliminate the estate tax. Senate Republicans had attempted to repeal the estate tax when Congress considered the Tax Cuts and Jobs Act in 2017. The final version of the TCJA did not fully repeal the death tax, but it effectively doubled the individual estate and gift tax exclusion to $10 million (approximately $13.9 million in 2025 dollars) through 2025, which prevents more families and generationally owned businesses from being affected by this tax. The increased exclusion expires at the end of 2025. 

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AI-Driven Automation and Continuous Accounting Frameworks

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6 days ago

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August 15, 2026

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The accounting profession is undergoing a fundamental structural transition as enterprise finance departments shift from periodic month-end closes toward automated continuous accounting models. By integrating specialized machine learning algorithms directly into enterprise resource planning (ERP) platforms, chief accounting officers are transforming financial reporting from a retrospective exercise into a real-time operational asset.

The Shift from Periodic Close to Continuous Financial Reporting
Traditional accounting workflows heavily relied on manual data reconciliation, spreadsheet calculations, and multi-week closing cycles at the end of each fiscal period. In contrast, continuous accounting frameworks utilize automated software agents to process, validate, and post transactional data in real time as business activities occur.

Automated bank reconciliation tools cross-reference incoming bank feeds, invoice records, and purchase orders automatically. By resolving transactional variances instantly throughout the month, corporate accounting teams eliminate the traditional workload spikes associated with quarterly and annual closes.

Machine Learning in Audit Trails and Anomaly Detection
Advanced natural language processing (NLP) and machine learning tools are redefining internal audit and financial control environments. Automated systems analyze 100% of general ledger entries, identifying anomalous transactions, duplicate payments, and unauthorized journal entries in real time.

Rather than relying on random statistical sampling, corporate internal auditors can focus their attention on high-risk flags automatically surfaced by algorithmic monitoring platforms. This continuous risk assessment strengthens internal controls over financial reporting (ICFR) and significantly reduces fraud risk.

Evolving Roles for Accounting Professionals
As routine data entry and manual reconciliation tasks become fully automated, the skill set required for accounting professionals is shifting toward data analysis, system design, and strategic business advisory.
– Systems Governance: Accountants are increasingly responsible for monitoring algorithmic accuracy and managing data integration pipelines.
– Business Partnership: Finance professionals leverage real-time financial dashboards to advise operational leaders on margin management and working capital allocation.
– Regulatory Compliance Management: Accounting teams utilize automated platforms to ensure compliance with dynamic tax codes and international accounting standards.

Core Implementation Recommendations
1. Deploy Automated Reconciliation Tools: Integrate continuous transaction processing modules into existing enterprise ERP architectures.
2. Establish Algorithmic Governance Controls: Implement strict internal testing protocols to ensure automated accounting rules comply with GAAP/IFRS standards.
3. Reskill Accounting Teams: Invest in training finance staff on data analytics, workflow automation, and predictive financial modeling.

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Accounting

Global ESG Reporting Standards and Double Materiality Compliance

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2 weeks ago

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August 9, 2026

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Corporate accounting departments face expanding reporting expectations as international sustainability disclosure standards achieve regulatory enforcement across major global jurisdictions. Chief Accounting Officers (CAOs) and corporate controllers are establishing rigorous internal accounting controls to treat Environmental, Social, and Governance (ESG) metrics with the same data precision, auditability, and governance as traditional financial statements.

Regulatory Harmonization Under Global Sustainability Frameworks
The implementation of standardized sustainability reporting frameworks—notably rules established by international sustainability accounting boards—has created unified expectations for public and large private enterprises. Corporations must report standardized metrics covering greenhouse gas emissions (Scope 1, 2, and material Scope 3), energy utilization, workforce demographics, and supply chain governance.

In Europe and other participating international jurisdictions, double materiality principles are mandatory. Under double materiality, organizations must report both how external sustainability risks impact corporate financial performance, and how internal corporate operations affect surrounding environmental and social structures.

Integrating Sustainability Metrics into Core ERP Systems
To provide auditable non-financial data, enterprise organizations are integrating specialized carbon accounting and ESG management platforms directly into core ERP systems. Automated data collectors capture energy utility invoices, logistics fuel consumption metrics, and vendor compliance records in real time.

Establishing automated, traceable data pipelines ensures that non-financial reporting is supported by clear audit trails. This structured approach allows external financial auditors to provide reasonable assurance on sustainability disclosures during annual corporate reporting cycles.

Financial Impacts and Capital Market Disclosure
Accurate ESG reporting directly influences corporate cost of capital and institutional credit ratings. Commercial lenders and institutional asset managers systematically incorporate sustainability metrics into risk pricing models. Companies that demonstrate transparent, verifiable progress in operational energy efficiency and climate risk mitigation benefit from expanded access to green bond markets and lower debt pricing.

Action Steps for Accounting Leadership
1. Implement Double Materiality Frameworks: Conduct comprehensive assessments to identify material financial and operational sustainability metrics.
2. Build Auditable Non-Financial Data Pipelines: Automate ESG data collection within core accounting software to ensure data integrity.
3. Align Sustainability with Annual Financial Filings: Prepare non-financial disclosures concurrently with financial statements to satisfy regulatory audit expectations.

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Accounting

Modernizing Internal Controls: Machine Learning and Continuous Monitoring in Auditing

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2 weeks ago

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August 5, 2026

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Internal audit departments and corporate risk managers are modernizing internal control frameworks by shifting from periodic sampling techniques to continuous monitoring and machine learning analytics. As operational data volumes increase across enterprise organizations, automated control testing ensures financial integrity, prevents corporate fraud, and streamlines annual audit engagements.

The Limitation of Periodic Audit Sampling
Historically, internal and external auditors evaluated internal controls by reviewing random samples of financial transactions—often analyzing less than five percent of total ledger entries. In complex enterprise environments, periodic sampling methods carry inherent risks of overlooking localized financial misstatements, unauthorized disbursements, or operational control breakdowns.

In 2026, progressive internal audit functions are utilizing automated continuous monitoring platforms that evaluate one hundred percent of financial transactions in real time. Continuous control auditing systems continuously monitor general ledger entries, procurement approvals, and expense reimbursements across all operating subsidiaries.

AI-Powered Fraud Detection and Anomaly Identification
Machine learning models trained on historical corporate financial data excel at identifying subtle transactional anomalies that indicate potential fraud or operational error. Automated systems instantly flag duplicate invoice payments, unapproved vendor creation, unusual journal entry timing, and unauthorized override of authority thresholds.

When an anomaly is detected, the automated auditing platform generates an instant risk alert, allowing internal audit teams to investigate root causes immediately. Early detection prevents minor operational errors from escalating into material weaknesses in financial reporting.

Streamlining External Audit Preparation
Continuous internal control monitoring delivers significant benefits during annual external financial audits. External audit firms can review continuous audit logs and automated control testing documentation, reducing the time required for manual field testing.

This integrated approach lowers overall audit compliance fees, reduces administrative burdens on corporate accounting staff, and provides senior management and audit committees with real-time visibility into the organization’s overall risk profile.

Core Implementation Guidelines
1. Transition to 100% Data Testing: Replace legacy sampling methods with automated continuous audit monitoring systems.
2. Deploy Anomaly Detection Algorithms: Implement machine learning models to identify unauthorized transactions and operational control overrides.
3. Align Internal and External Audit Workflows: Coordinate continuous control testing protocols with external auditors to optimize annual compliance cycles.

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