Conquering tariffs; bracing for notices; FBAR penalty timing; and other highlights from our favorite tax bloggers.

Whiplash

Number-crunching

• Canopy (https://www.getcanopy.com/blog): “7-Figure Firm, 4-Hour Workweek: 5 Questions to Ask Yourself.”
• The National Association of Tax Professionals (https://blog.natptax.com/): This week’s “You Make the Call” looks at Sarah, a U.S. citizen who moved to London for work in 2024. On May 15, 2025, it hit her that she forgot to file her 2024 U.S. return. Was she required to file her 2024 taxes by April 15?
• Taxable Talk (http://www.taxabletalk.com/): Anteing up with Uncle Sam: The World Series of Poker is back, and one major change this year involves players from Russia and Hungary. After suspension of tax treaties with those nations, players will have 30% of winnings withheld. 
• Parametric (https://www.parametricportfolio.com/blog): Direct indexing seems to come with a common misunderstanding: On the performance statement, conflating the value of harvested losses with returns. 

Problems brewing

• Taxing Subjects (https://www.drakesoftware.com/blog): No chill is chillier than the client’s at the mailbox when an IRS notice appears out of the blue. How you can educate — and warn — them about the various notices everybody’s that favorite agency might send.
• Dean Dorton (https://deandorton.com/insights/): Perhaps because they can be founded on trust, your nonprofit clients are especially vulnerable to fraud.
• Global Taxes (https://www.globaltaxes.com/blog.php): When it’s your time, it’s your time: The clock starts on FBAR penalties when the tax forms are due and not when penalties are assessed — and even the death of the taxpayer doesn’t extend the deadline.
• TaxConnex (https://www.taxconnex.com/blog-): Your e-commerce clients can muck up sales tax obligations in many ways. How some of the seeds of trouble might hide in their own billing system.
• Sovos (https://sovos.com/blog/): What’s up with the five states that don’t have a sales tax?
• Taxjar (https://www.taxjar.com/resources/blog): Humans are still needed to handle sales tax complexity, with real-world examples.
• Wiss (https://wiss.com/insights/read/): A business — and business-advising — success story from a California chicken eatery.

Almost half done

The reconciliation bill passed by the House on May 22 is currently being considered by the Senate, and will likely undergo changes before approval by the upper chamber. To what extent the changes will create stumbling blocks before a final bill is produced and voted on is uncertain, with the increased SALT deduction, Medicaid reforms, and repeal of certain Inflation Reduction Act credits on the line. 

While much can change between now and the final version of the bill, the following is a quick overview of some of the provisions:

• Bonus depreciation. First-year bonus depreciation, currently being phased down 20% per year since 2023, is 40% for 2025, and will drop to 0% in 2027. Under the One Big Beautiful Bill Act (or OBBBA) it will be reset at 100% for eligible property acquired and placed in service after Jan. 19, 2025, and before Jan. 1, 2030.
• Section 199A Qualified Business Income deduction. The QBI deduction, created by the Tax Cuts and Jobs Act, is available through 2025 to owners of pass-through entities, sole proprietors and the self-employed. The OBBBA would make the deduction permanent, and the deduction would increase to 23% for tax years beginning after 2025.
• Domestic research and experimental expenditures. The OBBBA would reinstate the deduction available to businesses that conduct research and experimentation. Expenses incurred after 2024 and before 2030 would be eligible. 
• Section 179 expensing. The bill increases the limit to $2.5 million and increases the phaseout threshold to $4 million for property placed in service after 2024. The limit and threshold would be adjusted annually for inflation.
• Excess business loss limitation. The bill makes permanent the excess business loss limitation for pass-through entities.
• Pease limitation. The bill would make permanent the repeal of the Pease limitation on itemized deduction, but would introduce a new limitation for taxpayers in the 37% bracket for years after 2025. It would also temporarily increase the standard deduction for tax years 2025 through 2028.
• The Child Tax Credit. The bill makes the CTC permanent and raises it to $2,5000 per child for tax years 2025 through 2028, after which it would return to its present $2,000 with an annual inflation adjustment. 
• Federal gift and estate tax exemption. The bill increases the federal gift and estate tax exemption to $15 million, and adjusts it annually for inflation. It is currently set at $13.99 million.

One sector the bill is very positive for is real estate, according to Tyler Davis, president of Saunders Real Estate: “It makes a lot of the TCJA provisions permanent. The estate tax exemption is made permanent and raised to $15 million, and the bonus is back to 100% for the next four years. This allows purchasers to depreciate their investments a lot faster, so it makes deals more attractive for investors and developers. A special provision for industrial manufacturing property under the bill, it is eligible for 100% expensing.”

Photographer: Nikita Sobolkov/nikkytok – stock.adobe.com

This would allow 100% of a project’s cost to be deducted in the first year, making it “hugely attractive,” he said. “The administration wants to bring investment back to the U.S. This will incentivize that process.”

Under the bill, the Section 163(j) business interest deduction would expand and allow more interest to be deducted on qualifying real estate, he said. “And they’re redoing some of the Opportunity Zone rules and boundaries, and are lowering reinvestment thresholds for investments. This should drive more investment into rural communities. And, lastly, there are no Section 1031 changes in the bill. That’s a really positive thing from a transactions and reinvestment perspective.”

Top 25 Firm WithumSmith+Brown acquired Pannel Kerr Forster of Texas on June 1, expanding its geographic reach into Texas and adding energy and oilfield expertise to its practice.

PKF Texas is an accounting, tax and business advisory firm headquartered in Houston. Its 20 partners and approximately 160 team members will join Withum’s roster but remain at their Houston office. 

“Joining forces with Withum offers our valued clients and dedicated staff even greater opportunities to thrive and succeed,” Gary Voth, director and chairman of the board at PKF Texas, said in a statement. “Our clients will now benefit from a larger platform of national and international resources, deeper technical expertise, and specialized knowledge. We share a commitment to the highest level of integrity, a flexible and innovative culture, and a dynamic approach to problem-solving. This allows us to seamlessly expand into new markets while maintaining our core values as we continue to service our clients under the Withum brand.”

PKF Texas also strengthens Withum’s financial services, manufacturing, professional services, technology, private client services, client accounting and advisory services. 

‘Uniting our firms enables us to grow a portfolio of energy and oilfield service businesses nationwide,” Patrick Walsh, Withum’s managing partner and CEO, said in a statement. “A piece of our M&A strategy aims to build around existing capabilities to create a more holistic client service approach. Diversity in expertise, experience and culture strengthens our ability to serve our clients and attract talent. Having a presence in the Space City offers us fantastic growth opportunities, and we’re excited to be here.”

Withum is based in Princeton, New Jersey, and reported $577 million in revenue in 2024. It has 25 offices, 226 partners and over 2,300 employees.

In April, Withum added CTM CPAs in Lincolnshire, Illinois. It added BBD LLP in Philadelphia in April 2024; O’Connor & Drew in Braintree, Massachusetts, in 2023; and Martinez & Associates in Winter Springs, Florida, and Martini Partners in Encino, California, in 2022.