Top 100 firm BMSS announced an investment in Knuula, an engagement letter and client documents software provider. The investment from BMSS came after successfully implementing Knuula over the past year to streamline its engagement letter process. It was after doing so that the firm’s leadership came to believe that Knuula could create complex client documents at an enormous scale, which was a huge need for the broader accounting industry. BMSS thought this presented a great opportunity to guide Knuula and help facilitate its growth. 

“We began working with Knuula in Spring 2024 to streamline our engagement letter process,” said Don Murphy, Managing Member of BMSS. “It quickly became clear that Knuula was not only a strong solution for us, but also an ideal partner in advancing industry-wide automation.”

While the specific terms of the deal were not disclosed, a spokesperson with Knuula said that, after this investment, BMSS and a collection of 21 of their partners now own 13% of the company. The investment represents not some passive revenue deal but an active collaboration between the two companies, with the spokesperson saying they will be working closely together on things like product development, new features, improvements, and networking.

The deal comes about a year after Knuula integrated with QuickFee, a receivables management platform for professional service providers, which allowed users to have engagement letters directly connecting to their QuickFee billing platform, tying the execution of the letter directly to the billing process. 

“We’ve long sought to partner with a firm focused on strategic innovation in the accounting space,” said Jamie Peebles, founder of Knuula. “To develop a perfect solution for large firms, it is ideal to have a partner that is willing to work closely together and iterate quickly. This requires constant feedback between our two teams. The IT team from BMSS worked with our development team constantly and helped us iterate rapidly. We also had consistent input from partners, manager, and administrative staff to help us make valuable changes to Knuula. BMSS was a perfect partner for us.”

The American Institute of CPAs is asking accountants to reach out to their congressional representatives and protest the proposed elimination of the ability of pass-through entities such as accounting firms to deduct state and local taxes.

The AICPA sent out a call to action on Friday urging CPAs to contact their members of Congress and voice their opposition to the “unfair targeting” of pass-through businesses in the tax reconciliation bill moving through Congress, such as those of accountants, dentists, doctors, lawyers and pharmacists, through the elimination of the Pass-through Entity Tax SALT deduction. 

“This would increase taxes on the partners/owners of many service-based businesses, such as accounting firms, discourage the creation and growth of such businesses, and further expand the disparity between C corporations and pass-through entities,” the AICPA warned.

On Sunday night, the bill advanced through a key House committee after several Republicans who had blocked the bill in the House Budget Committee on Friday agreed to let it proceed after winning promises of faster cuts in Medicaid health coverage. But the AICPA warned last week about several provisions in the bill, including the change in the SALT deduction rules, while praising others. 

The AICPA is concerned about language in the legislation, named after President Trump’s description, “One Big, Beautiful Bill,” that would eliminate the ability of certain pass-through entities, including accounting firms, to take advantage of the state and local tax deduction for pass-throughs. 

“This legislation would not only have an impact on the accounting profession, but also on many of their clients,” the AICPA pointed out. “Under this legislation, accounting firms will be worse off than they were after the application of the SALT cap under the Tax Cuts and Jobs Act (TCJA) and before the IRS-approved deductions were authorized. Specifically, the proposal newly subjects local entity level taxes to the individual SALT cap.”

The SALT cap for individual taxpayers has also been a bone of contention for Republican lawmakers in blue states like New York, New Jersey and California, who have been pushing for an expansion of the $10,000 limit in the TCJA. Under the current bill, the SALT cap would increase to $30,000, but some lawmakers would like to see it increase to $80,000 or higher. However, the cap would now be imposed on pass-through businesses under the bill.

“The proposed tax legislation unfairly subjects specified service trades or businesses (SSTBs), such as accountants, doctors, lawyers, dentists, veterinarians, etc., to the individual cap on state and local income tax deductions at the federal level, regardless of partners’/owners’ income level or the state in which they live,” said the AICPA.

“When comparing the tax treatment of state and local taxes for pass-through entities between the TCJA and this proposed bill, the sole change is the targeting of pass-through service providers, who were already substantially limited under the qualified business income (QBI) deduction for SSTBs,” the AICPA pointed out.

The TCJA excluded many firms from claiming the full 20% QBI deduction, which would increase to 23% under the bill.

The AICPA is encouraging accountants to call or email their senators and representatives by Wednesday, May 21, using this link to find and contact their members of Congress. It provided a sample email blurb to send to them:

“I urge you to oppose provisions included in the House Ways and Means Committee’s tax reform legislation that unfairly target the ability of service businesses structured as pass-through entities to deduct their state and local taxes (SALT) from their federal tax liability while providing no such limit to other businesses. This legislation effectively discriminates against particular pass-through businesses by indirectly raising taxes on those entities that are considered the backbone of the American economy. These provisions greatly widen the disparity in treatment between pass-through entities and other kinds of businesses, and I strongly urge you to oppose these provisions of the bill.”

The U.S. Government Accountability Office created a list of questions for policymakers’ oversight of the energy tax expenditures in the Inflation Reduction Act of 2022.

The report, published today, describes selected features and effective dates of each IRA energy tax expenditure, the implementation status and data of each expenditure as of January 2025, and questions to aid the oversight of the expenditures.

The 21 energy-related tax expenditures, which includes 20 credits and one deduction, cover a range of subjects such as clean vehicles, clean energy infrastructure, electricity generation and energy efficient buildings. The Joint Committee on Taxation estimates the expenditures may result in at least $200 billion less in revenue collected between 2022 and 2031. 

The GAO has long recommended greater scrutiny of tax expenditures. For example, in 2005, it recommended that the Office of Management and Budget produce a framework for reviewing the performance of tax expenditures.

“However, as of January 2025, the recommendation has not been implemented, limiting policymakers’ ability to regularly review their effectiveness,” the GAO wrote in its report. “Periodic reviews could help determine how well specific tax expenditures work to achieve their goals and how their benefits and costs compare to those of direct spending programs with similar goals. Since the IRA tax expenditures represent a substantial federal commitment, oversight questions can help provide useful scrutiny.”

The questions the GAO proposed regard evaluating effectiveness: Have the relevant agencies identified which tax expenditures contribute to their agency goals? What information are agencies reporting on the use and effects of the tax expenditure and how does that information relate to goals and measures? And what roles do agencies, including the Department of the Treasury and the Office of Management and Budget, have in overseeing the evaluation of the expenditure?

Other questions regard assessing administration: What have agencies done to minimize the burden associated with planning, recordkeeping, reporting and other compliance costs for taxpayers? What policies and processes does the IRS use to identify tax expenditure fraud risk? And what challenges, if any, have responsible agencies experienced in coordinating the implementation or administration of the expenditure?