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Accountants are in the midst of a series of changes, ranging from the future of the Internal Revenue Service to the kick-off of tax season.
President Donald Trump’s hiring freeze for federal government workers, changes at the top at the Internal Revenue Service, a proposed ban on contingency fees from the IRS, massive uncertainty around the Corporate Transparency Act, and a number of other recent developments have introduced a lot of volatility that has professionals wondering where to start.
Catch up on the most pressing issues in the field to stay ahead of the regulatory curve.
President Donald Trump signed a series of executive orders on Jan. 20 after his inauguration, including one that enacted a hiring freeze for federal government workers, particularly at the Internal Revenue Service. He also backed out of a global tax deal that had enjoyed support from the Biden administration.
“I will also issue a temporary hiring freeze to ensure that we are hiring only competent people who are faithful to the American public. And we will pause the hiring of any new IRS agents,” said Trump during a rally and parade at the Capital One Arena. “We will also require that federal workers must return to the office in person.”
Trump then began to refer to claims about thousands of armed IRS agents being hired during the Biden administration, although this claim has been disputed by the IRS and its employee union. “We are going to take the 88,000 people that they hired to go after you with guns — by the way, they are allowed to use guns and harass you like they were, and so many other people,” he said.
The Treasury Department and the Internal Revenue Service have proposed amendments to Circular 230, which governs practice before the IRS. The amendments are the most extensive since 2014 and cover significant developments that have affected practice since that time.
The proposed regulations would remove or update the parts of Circular 230 that related to registered tax return preparers and tax return preparation, as well as contingent fees to reflect changes in the law since the prior amendments to Circular 230 in 2011 and 2014. The regs would also revise or eliminate other provisions that are out of date.
The proposed regulations would incorporate provisions that better align Circular 230 with the current practice environment, such as requiring practitioners to maintain technological competency as part of their practice before the IRS.
The Supreme Court granted a stay against an injunction on the Corporate Transparency Act and its beneficial ownership information reporting requirement that had been imposed by a federal appeals court, but CTA enforcement nevertheless remains on hold because of a separate nationwide injunction.
The lower courts will continue to hear arguments over the law, which requires companies to file reports on their true owners to the Treasury Department’s Financial Crimes Enforcement Network as a way to deter illicit activity such as money laundering, tax fraud, drug trafficking and the financing of terrorism by shell companies. New businesses were required to start filing the beneficial ownership information reports with FinCEN last year, and existing ones had to file the BOI reports starting Jan. 1 of this year.
The Federal Trade Commission finalized an order requiring H&R Block to make a number of changes for the 2025 filing season, as well as longer-term changes.
The settlement also requires H&R Block to pay $7 million toward compensating consumers harmed by the company’s unlawful practices.
In a complaint announced last February, the FTC charged that the tax prep giant unfairly required consumers seeking to downgrade to a cheaper H&R Block product to contact customer service, unfairly deleted users’ previously entered data and made deceptive claims about “free” filing.
Top 10 Firm Grant Thornton announced that its CEO, Seth Siegel, is stepping down from his position after 30 years with the firm, though he will still remain involved as a senior advisor.
“I have called Grant Thornton home for almost three decades and am proud to have been part of this amazing team and organization, which has solidified its standing as the destination of choice for clients and talent alike,” said Siegel in the firm’s official statement. He felt that, with Grant Thornton positioned for what he said was strong continued growth, it was the right time to step down.
In a LinkedIn post, Siegel said the move will allow him to pursue other ambitions, focus on his health and spend more time with his family.
The Internal Revenue Service kicked off tax season on Jan. 27 facing a hiring freeze imposed by President Donald Trump in an executive order on Inauguration Day and lingering uncertainty over how to make up for over $20 billion in budget cuts.
The IRS has been rescinding job offers and posted on its website that hiring offers with a start date on or before Feb. 8, 2025, will be allowed to proceed. But offers with a start date after Feb. 8, 2025, or an unconfirmed start date, will be revoked.
Last month, Trump formally nominated Billy Long, a former Republican congressman from Missouri, as IRS commissioner. Trump announced his intention last month to nominate Long, even though then-commissioner Danny Werfel’s term wasn’t set to end until Nov. 12, 2027.
In the continuing saga of the fate of the Corporate Transparency Act, the New Civil Liberties Alliance filed an amicus curiae brief with the Supreme Court on Jan. 13, 2025, in Garland v. Texas Top Cop Shop.
The brief urges the court to reject the government’s request to stay a preliminary injunction against the enforcement of the CTA and its beneficial ownership information reporting mandate.
The CTA mandates that organizations that have filed for incorporation under state law submit detailed reports to the Treasury’s Financial Crimes Enforcement Network, or FinCEN, with civil and criminal penalties available to the government to punish those who fail to comply, either by omitting information or even accidentally submitting false information.
IRS Commissioner Danny Werfel said on Jan. 17 that he planned to resign on Monday, Jan. 20, coinciding with Inauguration Day.
President Donald Trump had announced plans in December 2024 to nominate former Rep. Billy Long, a Republican from Missouri, as the next IRS commissioner, even though Werfel’s term would not end until November 2027.
“While I had always intended to complete my full term as commissioner, the president-elect has announced his plan to nominate a new IRS commissioner,” Werfel said in an email to all IRS employees. “I have been touched by those who have reached out to me to share how they were hopeful that I could remain in seat and continue the important work underway. But as civil servants, we have a job to do, and that job is to now ensure a new commissioner is set up for success.”
National Taxpayer Advocate Erin Collins released her annual report to Congress on Jan. 8, highlighting improvements in taxpayer service by the Internal Revenue Service, but pointed to persistent delays in processing Employee Retention Credit claims and helping victims of identity theft.
“For the first time since I became the National Taxpayer Advocate in 2020, I can begin this report with good news: The taxpayer experience has noticeably improved,” Collins wrote. “In 2024, taxpayers and practitioners experienced better service, generally received timely refunds, and faced shorter wait times to reach customer service representatives … . After receiving multiyear funding, the IRS has [also] made major strides toward improving its taxpayer services and information technology (IT) systems.”
However, the IRS faces a budget cut of over $20 billion after Congress passed a continuing resolution to avoid a government shutdown last month, repeating language from an earlier continuing resolution that cut the IRS’s budget by a similar amount in 2023.
While much has happened during the past few years, and significant change lies immediately ahead, there is little that is new in the upcoming tax season. However, beneficial ownership reporting and tariffs — which are not part of the typical issues that preparers deal with — are potential topics of concern.
For now, this filing season appears to be business as usual for most accounting professionals, according to Misty Erickson, tax content program manager at the National Association of Tax Professionals.
“That said, there are a few things to keep in mind,” she added. “With the ever-changing landscape with BOI reporting, business owners that have not already filed, and need to, may be dealing with a tax deadline and a BOI deadline at the same time. While we wait for a new deadline to be announced, this is something to keep in mind and be prepared to advise clients on next steps.”
House Republican leaders are planning to accelerate new Medicaid work requirements to December 2026 in a deal with ultra-conservatives on the giant tax bill, according to a lawmaker familiar with the discussions.
The revised version of President Donald Trump’s economic package — slated to be released publicly Wednesday — calls to move up work requirements to December 2026 from 2029, the lawmaker said, who requested anonymity to discuss private talks.
Work requirements have been a sticking point in reaching agreement on Trump’s tax bill, as Speaker Mike Johnson attempts to navigate a narrow and fractious majority.
The December 2026 deadline could also become an issue in the midterm elections, just one month earlier with Democrats eager to criticize Republicans for restricting health benefits for low-income households.
The lawmaker said there will be a waiver process for states unable to quickly comply with the deadline. The person also said that changes to the federal match for Medicaid enrollees won’t be in the bill and talks continue on changes to Medicaid provider taxes.
The debate over Medicaid has pinned lawmakers from high-tax states against hardliners. But the new Medicaid work requirement date could alienate several moderates concerned about cuts to the health care program for low-income people and those with disabilities.
Johnson can only lose a handful of votes and still pass the bill, which is the centerpiece of Trump’s legislative agenda.
The new date is also likely to provoke a backlash in the Senate.
It will be very difficult for states to implement the work requirements in a year and a half, said Matt Salo, a consultant who advises health care companies and formerly worked for the National Association of Medicaid Directors.
Squeezing the process of creating work requirements in every state into a compressed time frame is “almost a guarantee it won’t work” and will result in people who qualify for health coverage getting kicked out of the program, Salo said.
“Trying to speed run this into a much tighter time frame to hit an arbitrary budget target is not a recipe for success,” Salo said.
House Speaker Mike Johnson said Republicans have reached an agreement to increase the state and local tax deduction to $40,000, suggesting a resolution to one of the final issues holding up President Donald Trump’s economic bill.
“That is the agreement we came to,” Johnson told CNN Wednesday, in response to a question about raising the deduction cap to $40,000 from $10,000 for a decade.
“I think the SALT caucus, as they call themselves, it’s not everything they wanted, but I think they know what a huge improvement that is for their constituents and it gives them a lot to go home and talk about,” Johnson said.
The $40,000 SALT limit will phase out for annual incomes greater than $500,000, according to a person familiar with the matter. The income phaseout threshold would grow 1% a year over a decade, they said.
The cap is the same for both individual taxpayers and married couples filing jointly, the person added.
Several lawmakers — New York’s Mike Lawler, Nick LaLota, Andrew Garbarino and Elise Stefanik; New Jersey’s Tom Kean, and Young Kim of California — have threatened to reject any tax package that does not raise the SALT cap sufficiently.
It’s not clear that all those lawmakers have signed off on the deal.
Some SALT advocates have pushed for income limits as high as $750,000 and a 2% annual phaseout increase, according to another person familiar with the negotiations, who requested anonymity to discuss private talks.
Lawler told NPR in an interview Wednesday morning that lawmakers are still working through some “finer points,” but that he’s hopeful to reach a deal later in the day.
The current write-off is capped at $10,000, a limit imposed in Trump’s first-term tax cut bill. Previously, there was no limit on the SALT deduction and the deduction would again be uncapped if Trump’s first-term tax law is allowed to expire at the end of this year.
Johnson’s plan expands upon the $30,000 cap for individuals and couples included in the initial version of the tax bill released last week. That draft called for phasing down the deduction for those earning $400,000 or more. That plan was quickly rejected by several lawmakers from high-tax districts who called the plan insultingly low.
SALT has been among the thorniest issues for House leaders who are navigating the political realities of pushing an expensive tax bill through with their narrow and fractious majority. Trump has grown frustrated over the SALT demands and urged lawmakers on Tuesday to not let their parochial interests sink the bill.
Still, the agreement is also already causing a backlash from conservatives who are pushing for more spending cuts to offset the tax reductions in Trump’s economic package.
Representative Andy Harris, who chairs the conservative House Freedom Caucus, told Newsmax he thinks Republicans are “actually further away from the deal, because that SALT cap increase, I think, upset a lot of conservatives again.”
The House Rules Committee debated Trump’s bill for hours early Wednesday, beginning at 1 a.m. Washington time, in order to meet Johnson’s self-imposed Thursday deadline to pass the legislation out of the House. Republicans are expected to soon release a revised version of the legislation that will address SALT and other unresolved issues.
Republicans are also sparring over spending reductions in the bill, including weighing cuts to Medicaid health coverage and food assistance for low-income households.
House Republicans leaders are planning to accelerate new Medicaid work requirements to December 2026 from 2029 in a deal with ultra-conservatives to cut additional health spending.
IT auditors who know a lot about artificial intelligence can now show it through a new certification, as the ISACA — the organization behind credentials like CISA and CISM — now offers an AAIA or “Advanced in AI Audit” credential. The certification demonstrates that an IT audit professional can navigate the complexities of AI and has the skills to respond to risks, identify opportunities and ensure compliance while safeguarding organizational integrity. Overall, it validates expertise in conducting AI-focused audits, addressing AI integration challenges, and enhancing audit processes through AI-driven insights.
The credential requires knowledge of a wide range of AI-related audit skills, proven through an exam scheduled through ISACA. Only those with an active CISA from ISACA, CIA from the IIA, and CPA from the AICPA are eligible to pursue the AAIA, which covers the key domains of AI governance and risk, AI operations, AI auditing tools and techniques.
Chiefly, professionals must demonstrate “AI operations” skills that concern balancing sustainability, operational readiness and the risk profile with the benefits and innovation AI promises to support enterprise-wide adoption of this powerful technology. This includes AI-specific data management, AI solution lifecycle management, AI-specific change management, supervision of AI solutions (especially agents), testing techniques for AI solutions, AI-specific threats and vulnerabilities, and AI-specific incidence response management.
The next largest area of focus is “AI governance and risk,” which is mainly concerned with advising stakeholders on implementing AI solutions through appropriate and effective policy, risk controls, data governance and ethical standards. This encompasses general knowledge of AI and its business impacts, AI governance and program management, AI risk management, data and data governance programs, and how AI fits into standards frameworks and professional ethics.
After that is “AI auditing tools and techniques,” which focuses on optimizing audit outcomes for innovation and highlights the professional’s knowledge of audit techniques tailored to AI systems and the use of AI-enabled tools to streamline audit efficiency and provide faster, quality insights. This includes audit planning and design, testing and sampling methodologies, evidence collection techniques, data quality and analytics, outputs and reports, all specific to AI.
There are a number of task-based secondary classifications, such as “utilize AI solutions to enhance audit processes, including planning, execution and reporting” and “evaluate algorithms and models to ensure AI solutions are aligned to business objectives, policies and procedures.”
“ISACA is proud to have served the global audit community for more than 55 years through our audit and assurance standards, frameworks and certifications, and we are continuing to help the community evolve and thrive with the certifications and training they need in this new era of audits involving AI,” said Shannon Donahue, ISACA chief content and publishing officer. “Through AAIA, auditors can demonstrate their expertise and trusted advisory skills in navigating AI-driven challenges while upholding the highest industry standards.”
As AI becomes increasingly integrated into the world economy, a number of standard-setting and certification bodies have responded to rising concerns about the impact the technology can have on business and the economy as a whole. The National Institute of Standards and Technology released its AI Risk Management framework at the beginning of 2023. The following year, the International Organization for Standardization released ISO 42001, which specifies requirements for establishing, implementing, maintaining and continually improving an AI management system within an organization. ISACA says this is the first advanced AI audit certification in the world, developed in response to rising concerns about the black box nature of many AI models which, in turn, has driven calls for more oversight by audit and assurance professionals over the technology’s internal structures.