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This week’s stats focus on the number of PCAOB and SEC enforcement actions against auditors; the percentage of on-site versus remote job offerings for accountants on Glassdoor and LinkedIn; states with the highest and lowest lifetime tax burdens; the growth rate of Crete Professionals Alliance, the fastest growing firm of 2024; chief audit executives by generation; and the amount of employees per partner among the Top 100 Firms.

The Internal Revenue Service issued a notice Friday giving some breathing room to participants and advisors involved with micro-captive insurance companies.

In January, the IRS issued final regulations designating micro-captive transactions as “listed transactions” and “transactions of interest,” akin to tax shelters. The IRS had proposed the regulations in 2023 but needed to be careful to comply with the Administrative Procedure Act to allow for a comment period and hearing after a 2021 ruling by the Supreme Court in favor of a micro-captive company called CIC Services because the IRS hadn’t followed those procedures back in 2016 when designating micro-captives as transactions of interest. However, the micro-captive insurance industry has asked for more time to comply with the new reporting and disclosure requirements, and one group known as the 831(b) Institute announced earlier this week it had sent a letter to the IRS’s acting commissioner requesting an extension.

On Friday, the IRS issued Notice 2025-24, which provides relief from penalties under Section 6707A(a) and 6707(a) of the Tax Code for participants in and material advisors to micro-captive reportable transactions for disclosure statements required to be filed with the Office of Tax Shelter Analysis. However, the relief applies only if the required disclosure statements are filed with that office by July 31, 2025. 

In the notice, the IRS acknowledged that stakeholders had raised concerns regarding the ability of micro-captive reportable transaction participants to comply in a timely way with their initial filing obligations with respect to “Later Identified Micro-captive Listed Transactions” and “Later Identified Microcaptive Transactions of Interest.”

In light of the potential challenges associated with preparing disclosure statements during tax season and in the interest of sound tax administration, the IRS said it would waive the penalties under Section 6707A(a) with respect to Later Identified Micro-captive Listed Transaction and Later Identified Microcaptive Transaction of Interest disclosure statements completed in accordance with Section 1.6011-4(d) and the instructions for Form 8886, Reportable Transaction Disclosure Statement, if the participant files the required disclosure statement with OTSA by July 31, 2025.   

The relief is limited to Later Identified Micro-captive Listed Transactions and Later Identified Micro-captive Transactions of Interest. However, the notice does not provide relief from penalties under Section 6707A(a) for participants required to file a copy of their disclosure statements with OTSA at the same time the participant first files a disclosure statement by attaching it to the participant’s tax return.  

Taxpayers who are concerned about meeting the due date for these disclosure statements can ask for an extension of the due date for their tax return to obtain additional time to file such disclosure statements. The disclosures required from participants in micro-captive listed transactions and transactions of interest on or after July 31, 2025, remain due as otherwise set forth in the regulations. 

There’s also a waiver for the material advisor penalty for similar reasons. “In light of potential challenges associated with preparing disclosure statements during tax return filing season and in the interest of sound tax administration, the IRS will waive penalties under section 6707(a) with 5 respect to Later Identified Micro-captive Listed Transaction and Later Identified Microcaptive Transaction of Interest disclosure statements completed in accordance with § 301.6111-3(d) and the instructions to Form 8918, Material Advisor Disclosure Statement, if the material advisor files the required disclosure statement with OTSA by July 31, 2025,” said the notice. “Disclosures required from material advisors with respect to Micro-captive Listed Transactions and Micro-captive Transactions of Interest on or after July 31, 2025, remain due as otherwise set forth in § 301.6111-3(e).  This notice does not modify any list maintenance and furnishment obligations of material advisors as set forth in section 6112 and § 301.6112-1. “

In my work with accounting firms, I’ve lost count of how many times I’ve heard partners say some version of: “We’re paying top dollar. Why are people still leaving?” One conversation particularly sticks with me — a managing partner genuinely baffled by rising turnover despite offering excellent compensation packages.

What I often discover isn’t surprising: Many firms have mastered technical excellence and client service while leadership runs on autopilot. They focus almost exclusively on metrics and deadlines, forgetting the human element. No wonder talented professionals walk out the door seeking workplaces where they’re valued for more than just their billable hours.

We’re facing a significant talent challenge in our profession. From 2020 through 2022, approximately 300,000 U.S. accountants and auditors have left their jobs — a dramatic shift that should concern all of us. While retiring baby boomers account for some of this exodus, we also see professionals in their prime years leaving the profession.

(Read more: “Connected Leaders: Cultivating deeper bonds for team success“)

The timing couldn’t be worse. The Bureau of Labor Statistics projects about 136,400 accounting and auditing job openings annually through 2031, creating a significant gap between talent supply and demand. This challenge requires more than recruitment tactics or compensation increases — it demands a fundamental shift in how we lead.

The disconnection crisis

Traditional accounting leadership has often prioritized technical excellence and client service at the expense of human connection. We’ve built cultures where being constantly available somehow equals commitment, boundaries are treated as limitations rather than assets, and professional development means technical improvement instead of leadership growth.

Technology has both connected and disconnected us. I’ve worked with firms where team members haven’t had a meaningful conversation with their managers in months despite being on Zoom calls together every day. This disconnect leads to declining engagement and stalled innovation, and makes retaining talented professionals increasingly difficult.

Connected leadership isn’t complicated — it’s about creating real relationships through intentional practices that build trust. It’s the opposite of the “manage by spreadsheet” approach that’s all too common in our profession.

I love thinking about connected leadership like conducting an orchestra. Great conductors don’t just keep time — they understand what makes each musician unique, create space for individual expression within the group, and know when certain sections should shine while others provide support. Most importantly, they get that beautiful music comes from relationships, not just technical precision.

This approach sits at the heart of what I teach through The B³ Method — Business + Balance = Bliss. When leaders create environments where team members feel genuinely seen and valued, magic happens — both in personal fulfillment and on the bottom line.

Alenavlad – stock.adobe.com

The business case for connection

Before dismissing this as too “soft” for our numbers-driven profession, consider the data. According to Gallup’s 2024 State of the Global Workplace report, low employee engagement costs the global economy $8.9 trillion annually — an extraordinary sum that affects businesses of all sizes.

Organizations with high engagement see 21% higher profitability and significantly lower turnover. What accounting leaders really need to understand is that managers account for 70% of the variance in team engagement. When managers themselves are engaged, employees are twice as likely to be engaged too. These positive shifts translate to better retention, stronger client relationships and improved profitability.

Beyond retention, connected leadership directly impacts client relationships and innovation. When team members feel psychologically safe, they’re more likely to raise concerns, suggest improvements, and deliver exceptional client service.

Becoming a connected leader

You don’t need to overhaul your entire firm to start seeing results. Try these practical approaches:

1. Take a beat. Before jumping into solutions or directives, pause to really listen. Some of my most successful clients start meetings with “connection before content” — spending just a few minutes establishing human connection before diving into the agenda. I recently had an attendee of my Connected Leadership workshop tell me: “Taking just two minutes to meditate can remarkably reset the nervous system, providing a quick and effective way to find calm and focus during a busy workday.”
2. Create boundary rituals. Work-life harmony isn’t about perfect balance — it’s about intentional integration. Help your team establish clear boundaries that actually enhance client service, like “no-meeting Fridays” or dedicated deep work blocks. One partner told me their key takeaway was “to take care of myself to be better in all aspects of life!”
3. Measure what matters. Beyond billable hours and realization rates, assess team connections through regular check-ins focused on engagement and belonging. Another workshop participant noted that, as a leader, they must take “100% responsibility for my own actions and outcomes.” What gets measured gets managed — so measure the human element, too.
4. Get comfortable with vulnerability. Share appropriate challenges and lessons learned, showing that vulnerability is a strength. Poignant feedback from my last workshop stated: “For the managing partners and leaders of the organization to put out there for us their vulnerabilities, past struggles, and pain is a testament to their humanity and endurance, and that is a powerful takeaway.”

The future of accounting leadership

Implementing connected leadership will likely face resistance, particularly in traditional accounting environments. This approach can initially be misperceived as “soft” or less important than technical skills. However, the firms that successfully navigate this transition recognize that connected leadership isn’t separate from business success — it’s foundational to it.

When faced with resistance, start small with measurable experiments. Document outcomes, adjust approaches and gradually expand successful practices. Focus on the business case rather than just the human case, though both are equally important.

As our profession navigates unprecedented talent challenges, we need to evolve how we lead. The firms that will thrive won’t just be those with the best technical expertise — they’ll be the ones where leaders prioritize connection alongside excellence.

I challenge you: Are you leading in a way that creates meaningful relationships, or are you perpetuating a culture where people feel like just another billable resource? Your answer might determine whether your firm struggles to keep talent or becomes a magnet for professionals seeking both success and fulfillment.

In an orchestra, the most powerful moments often come not from individual instruments playing louder, but from all sections playing in harmony. The same is true for our teams.