This year’s report of the IRS Advisory Council includes recommendations on 37 issues covering a broad range of topics, among the most important of which are IRS funding and oversight of preparers.

The top general report issues also include IRS Strategic Operating Plan assessment and analysis, hiring, online accounts promotion and technical support, capabilities and authorizations for business online accounts, ID theft and the PTIN database and broader continuing education for Enrolled Agents, among other topics.

“IRSAC members have spent numerous hours analyzing issues in tax administration and the transformation work underway across the IRS,” said IRS Commissioner Danny Werfel. “The IRS is grateful for their hard work.” 

Among the issues and recommendations:

• IRS funding: Noting that many Americans do not understand the tax gap or its impact, and that Congress rescinded some of the IRS funding granted under the Inflation Reduction Act and continues denying inflation adjustments to the IRS base budget, IRSAC recommended greatly improved communication to the public regarding the impact of the tax gap.
• Preparer oversight: The report noted that tax prep businesses “continue to train tax preparers they employ according to their own needs and standards” and that “sole proprietors have complete discretion as to their preparation and training.” Among other recommendations, IRSAC proposed a voluntary Filing Season Agent credential modeled on the Enrolled Agent credential. “Research and publish results regarding accuracy rates among [Annual Filing Season Program] record holders, uncredentialed preparers, and preparers otherwise exempt from AFSP test requirements,” the report suggested.
• EA CE: The 72 hours of continuing education required to renew enrollment for EAs should allow up to four hours of practice management, which could include business organization, communications, marketing and IT, among other topics.

The IRSAC serves as a federal advisory committee to the IRS commissioner and executive leadership. It provides a public forum for discussion of relevant issues in tax administration. IRSAC subgroups cover information reporting, large business and international, small business/self-employed, tax exempt/government entities and taxpayer services. 

With the contentious 2024 elections behind us, we can finally focus on President-elect Trump’s agenda for the economy, taxes and jobs. With Republicans flipping the Senate (and White House) and also retaining the majority in the House of Representatives, the president-elect should have control and a voter mandate that could dramatically streamline the legislative process in his second term. As you start year-end planning for your clients, you’ll want to familiarize yourself with the many potential 2025 tax changes to ensure more thorough analyses and productive client discussions. Many tax policy experts believe Republicans are likely to use a process called budget reconciliation, which allows for budget legislation to be passed out of the House and Senate via a simple majority.

Trump’s landmark tax legislation from his first term — the 2017 Tax Cuts and Jobs Act — remains intact even after Democrats won the White House in 2020. But most TCJA provisions are set to expire in 2026 as part of the original legislation passed seven years ago. As such, the TCJA will be the centerpiece of Trump’s new tax and economic platform. However, there are many new additions to the TCJA that you and your clients will want to keep an eye on. Let’s look at the potential impact of 11 of the most important ones, thanks to a skillful analysis of the governmental impact by the Tax Foundation, a nonpartisan, nonprofit independent tax policy research organization. Below the Tax Foundation analysis, we have added our own take on what the proposed changes could mean for you and your clients.

The Public Company Accounting Oversight Board introduced two pieces of guidance to help auditing firms apply its new quality control standard.

The Securities and Exchange Commission approved the PCAOB’s QC standard in September. QC 1000, A Firm’s System of Quality Control, will require all registered public accounting firms to identify specific risks to their practice and design a quality control system that can safeguard against those risks. The standard will require an annual evaluation of firms’ QC systems and reporting to the PCAOB. It takes effect on Dec. 15, 2025.

To help firms adjust to the upcoming requirements, the PCAOB posted two guidance documents Tuesday. QC 1000 Staff Guidance explains how all firms registered with the PCAOB, including those that don’t audit issuers or SEC-registered brokers and dealers, are affected by QC 1000, but not all requirements of QC 1000 will apply to every firm. The publication offers an overview of the various requirements of QC 1000 and along with staff guidance for firms about how to comply with the standard.

QC 1000 emphasizes accountability, firm culture and the “tone at the top,” and firm governance through requirements for specified roles within and responsibilities for the QC system, including at the highest levels of the firm; quality objectives that link compensation to quality; and, for the largest firms, the requirement of an independent perspective on firm governance, the publication points out.

The other publication is AS 2901 Staff Guidance. In connection with the adoption of the new QC 1000 standard, the PCAOB has expanded the auditor’s responsibility to respond to deficiencies on completed engagements under an amended and retitled AS 2901, Responding to Engagement Deficiencies After Issuance of the Auditor’s Report. In addition to an overview of these changes, this publication includes insights from the PCAOB staff on the scope and applicability of the new requirements, as well as information on responding to engagement deficiencies and documentation. AS 2901 requires firms to take action to respond to all engagement deficiencies identified on completed engagements unless it’s probable that the auditor’s report is not being relied on, the PCAOB noted.