Accounting practice management software provider Canopy announced a $70 million Series C funding round. Viking Global Investors led the round, with continued participation from existing investors Ten Coves Capital, Ankona Capital, Pelion Venture Partners and Tenaya Capital. 

The announcement follows the success of a $35 million round in May 2024. The funding from this most recent investment will focus on leveraging AI to make medium and large accounting firms more efficient and profitable. The company will also be evaluating opportunities to grow through acquisitions. 

“At Canopy, our mission is to help accountants to focus on what drew them to the profession in the first place: being accountants,” said Canopy CEO Davis Bell. “They want to apply their expertise to delivering real value to clients — not chasing documents, renaming PDFs and sending invoices. We were already making these tasks easier, but with AI we’re now automating them away entirely. This frees up time and resources and generates insights that help firms better serve clients, increase profitability and reduce team burnout. As the operating system for accounting firms, Canopy is the natural starting point for the AI transformation of the industry.”

Last month, Canopy announced it had begun testing for Questionnaire, Document Automation and Email Summaries features.  The Questionnaire feature will allow users to build custom forms with preconfigured settings, which can be used for organizers or client intake. The Document Automation feature will eventually leverage AI to create consistent naming conventions based on a firm’s preferences. When individuals or companies upload documents into Canopy, this feature will provide uniform naming structures to make document management more efficient. Email Summaries will let practitioners scan and process emails.

Tax and finance executives around the world are confronting the prospect of increased tariffs and trying to adjust their plans accordingly.

Many are anticipating the need for greater tax disclosures, according to a new survey by Deloitte of 1,100 tax and finance executives from 28 countries. The survey found 82% of the respondents expecting increased public tax disclosures over the next two to three years. A similar proportion, 81%, said national-level transparency laws are the most influential regulatory force they are facing.

“As they grapple with widespread uncertainty, global organizations are focusing on what they can control as the tax function undergoes significant policy shifts with the added complexity of a fast-moving tariff environment,” said Amanda Tickel, Deloitte’s global leader of tax and legal policy, in a statement Wednesday. “Keeping a pulse on such rapid change can be incredibly challenging. Tax leaders must collaborate across the organization to understand where they are, where they’re going, and how they can get there.”

The digitalization of tax is a top priority across the globe, but optimism about tax technology has waned year over year, with only 29% of respondents believing AI will enhance accuracy. There are growing concerns that AI can introduce more complexity than simplification, although AI-driven tax compliance software keeps expanding globally. Other concerns have arisen over the costs of e-invoicing.

The increase in remote and cross-border work also presents tax challenges, with approximately three-quarters of businesses expressing concerns about corporate tax risks, such as transfer pricing. Two-thirds of the respondents reported increased use of tax incentives to attract foreign talent, particularly in high-skilled industries. 

Sustainability has become a top priority for businesses, jumping from No. 5 to No. 3 in the report’s impact rankings year over year. That includes reporting requirements, new and emerging taxes, and corporate sustainability initiatives.  The majority of respondents (55%) cited sustainability as a top priority within their business. A 56% majority of respondents indicated tax implications are incorporated within their current sustainability strategies. But the cost of compliance is still a significant challenge, particularly in Africa, where respondents (45%) rate it as a major issue. While many of the respondents are still exploring different options to lower their costs, only about one-third of respondents (36%) are leveraging grants and incentives. 

Get ready to spot some frauds.

“Ponzi schemes don’t collapse when the markets are booming. They collapse when the music stops,” warned Jeffrey Schneider, managing partner at law firm Levins Kellogg Lehman Schneider + Grossman, describing how financial frauds typically unravel during recessions and why we should be on high alert. 

With recession odds jumping from 23% in January to 36% in March, according to CNBC’s Fed Survey, and J.P. Morgan putting the risk at 40% (likely higher after the latest round of tariff announcements), the economic pressure is mounting — and so is the potential for Ponzi schemes to implode.

Jin Lee/Bloomberg

During recessions, the influx of new investors dries up, while demand for withdrawals rise. “It’s a perfect storm that often reveals the unsustainable foundation of a Ponzi scheme,” according to Schneider. “As we’ve seen time and again — from 2008’s Great Recession to COVID-era fraud — downturns don’t just hurt the market, they expose what’s been lurking beneath it.”

Schneider is a trial attorney who has recovered more than $400 million for defrauded investors, including well-known frauds such as Jay Peak and Mutual Benefits. 

“When the economy is strong and investor optimism is high, Ponzi schemes can run for years undetected,” he said. “But when markets turn and recession fears grow, that’s when the house of cards begins to crumble. The influx of new investors dries up, and pressure mounts from existing investors trying to withdraw their money. That combination is deadly for fraudsters, and it’s often how their schemes are finally exposed.”

Ponzi schemes remain a serious issue in the U.S., even after the high-profile collapses of Bernie Madoff, Allen Stanford and Scott Rothstein, Schneider observed. 

“In 2023 alone, 66 Ponzi schemes were uncovered, which collectively involved nearly $2 billion of potential losses, according to Ponzitracker,” he explained. “And those are just the ones that have been caught. Many more fly under the radar until, in many cases, economic conditions bring them to light.”

Investors should remain vigilant and be on the lookout for common red flags that may signal a Ponzai scheme, Schneider emphasized. These include consistently high returns that appear unaffected by market conditions. If an investment opportunity seems too good to be true, it probably is, he advised. 

“A lack of transparency is another warning sign,” he continued. “If you can’t clearly understand how the investment works or where the returns are coming from, proceed with caution. Difficulty withdrawing funds or pressure to continually reinvest should also raise alarms, as legitimate investments typically allow for straightforward access to your money. It is also important to verify that both the investment products and the individuals offering them are properly registered with the Securities and Exchange Commission or FINRA. Unregistered entities are a major red flag.” 

“I’ve seen firsthand how devastating these schemes can be and how important it is to hold bad actors accountable,” Schneider said. “But the best defense is always prevention. In uncertain economic times like these, heightened vigilance is critical.”

Getting your own back

“Ponzi schemes are so prevalent that they have their own set of guidelines,” said Miami CPA Carrie Baron of Carrie Baron & Associates. 

For tax years 2018 through 2025, individuals can only deduct casualty or theft losses of personal-use property not connected with a trade or business or a transaction entered into for profit if the loss is attributable to a federally declared disaster. 

“But theft losses incurred in a transaction entered into for profit may still be deductible,” she noted. “The amount of the theft loss includes not only the investor’s [unrecovered investment], but also the amounts reported as income from the investment in prior years that were reinvested in the fraudulent investment arrangements, according to the IRS.”

“The defrauded investor can take an ordinary loss of 95% of the loss if they are not seeking recovery,” noted Baron. “The IRS says if you use the safe harbor they won’t challenge the Ponzi deduction.”

The safe harbor under the revenue procedure generally permits taxpayers to deduct in the year of discovery 95% of their net investment less the amount of any actual recovery in the year of discovery and the amount of any recovery expected from private or other insurance, such as that provided by the Securities Investor Protection Corporation.