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KPMG US aims to become a law firm too

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KPMG US has set up a subsidiary that has filed an application in Arizona to establish a law firm in the state, with hopes of going national.

The subsidiary of the New York-based Big Four firm, known as KPMG Law US, filed an application with the Arizona Supreme Court to establish KPMG Law US as an “alternative business structure.” KPMG Law US will provide a set of integrated business solutions for legal teams, adding to the global capabilities of KPMG Law.  

KPMG member firms around the world have been offering legal services for over a decade and are now in over 80 jurisdictions. In fiscal year 2024, the fastest-growing function across the KPMG global network was tax and legal services.

“KPMG Law US will be positioned to deliver innovative and quality services for legal teams, drawing on the KPMG network’s global experience as well as our technology capabilities and scale,” said a KPMG US spokesperson. “Legal teams navigate complex challenges with the support of traditional law firms. They also face substantial and wide-ranging process challenges that can benefit from legal expertise and technology at scale. We aim to solve those pain points, especially on tight timelines.This focused effort is a natural extension of our capabilities and will complement the services of traditional law firms.”

KPMG US already serves over 100 clients in Arizona, leveraging approximately 300 people across the firm’s audit, tax, advisory and business process group teams. Its presence has grown 35% since 2020 and supports the growth of the Arizona economy. 

KPMG would be the first Big Four firm in the U.S. to operate a law firm, according to the Wall Street Journal. It’s leveraging a state program that began in 2021 ending a restriction on allowing non-lawyers to own law firms in an effort to alleviate the shortage of legal service providers. 

“We have been studying Arizona’s structure for years, and we’re excited by the possibility that it presents to us,” said KPMG Tax principal Tom Greenaway, the designated principal on the application, during a January 14 court hearing. “We think the time is right now for us, given the advances that we have made in technology and the maturity of this market. We really think that we can bring innovation and a complete set of integrated legal solutions to our clients and to other clients here in Arizona.” 

The firm aims to grow the law firm beyond Arizona once it has received approval from the state supreme court and expand to other parts of the country by leveraging Arizona’s laws and its alternative business structure, 

“As an Arizona ABS, KPMG Law US would be able to practice law in the United States, subject to legal rules in its various jurisdictions, which is something that no Big Four network firm can currently do,” said the spokesperson. “Pending approval, this innovation would differentiate KPMG Law US both in the legal and the consulting markets. KPMG Law US would be able to bring legal capabilities to managed services, such as contract lifecycle management, among others.”

Partnering with firms in other states, KPMG Law US plans to serve clients nationally, including in Arizona. It has established relationships with law firms to support its legal teams. KPMG Law US intends to operate within each state’s ethics rules just like every other law firm. It will be able to co-counsel, refer or partner with separate staffing firms and other law firms, to expand services across jurisdictions, subject in all cases to legal and ethics rules in its various jurisdictions. KPMG pointed out that other ABS law firms operate this way and the model is also consistent with common practice among law firms. For decades, it noted, U.S. law firms, both small and large, have used co-counsel arrangements and staffing companies to provide coverage for their work across different jurisdictions.

“In order to do this job effectively, I need to be embedded within and working shoulder to shoulder proactively with the business,” said KPMG principal David Rizzo, a compliance lawyer for the ABS application, during the court hearing. “We are committed to running a tight ship and to standing on the right side of the law in Arizona, and in all other jurisdictions, backed by the support and resources of KPMG LLP.”

The firm plans to abide by all of the ethics rules surrounding such arrangements. “We will strive to set the bar for quality and ethics in legal services,” said the spokesperson. “KPMG Law US will be governed by the same high ethical standards that apply to other law firms and will build on our long-standing commitment to quality, ethics, independence and compliance with professional standards. We look forward to enhancing our multidisciplinary model and driving further innovation in the professional services industry, pending approval.”   

KPMG Law US plans to offer legal managed services, global entity management, outbound legal project management support, and legal transformation solutions to legal teams. KPMG Law US will mainly deliver large-scale, process-driven work, such as volume contracting, remediation exercises, M&A-driven harmonization of contracts, and other legal managed services, leveraging its technology. KPMG has a cloud-based and generative AI-enabled Digital Gateway platform that serves as a “control tower” for a company’s set of tax and legal data, providing advanced analytics and reporting capabilities.

“Technology and process are something that we’re really good at,” said Greenaway at the hearing. “We’ve spent a decade or more investing massive sums of money in building our technology platform and solutions. Our firm has a proprietary Digital Gateway platform that we are going to deploy across these business law problems that emerge. We think we can provide a more efficient set of solutions than a lot of existing providers.” 

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House passes tax administration bills

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The House unanimously passed four bipartisan bills Tuesday concerning taxes and the Internal Revenue Service that were all endorsed this week by the American Institute of CPAs, and passed two others as well.

  • H.R. 1152, the Electronic Filing and Payment Fairness Act, sponsored by Rep. Darin LaHood, R-Illinois, Suzan Delbene, D-Washington, Randy Feenstra, R-Iowa, Brad Schneider, D-Illinois, Brian Fitzpatrick, R-Pennsylvania and Jimmy Panetta, D-California. The bill would apply the “mailbox rule” to electronically submitted tax returns and payments to allow the IRS to record payments and documents submitted to the IRS electronically on the day the payments or documents are submitted instead of when they are received or reviewed at a later date. The AICPA believes this would offer clarity and simplification to the payment and document submission process while protecting taxpayers from undue penalties.
  • H.R. 998, the Internal Revenue Service Math and Taxpayer Help Act, sponsored by Rep. Randy Feenstra, R-Iowa, and Brad Schneider, D-Illinois, which would require notices describing a mathematical or clerical error to be made in plain language, and require the Treasury to provide additional procedures for requesting an abatement of a math or clerical error adjustment, including by telephone or in person, among other provisions.
  • H.R. 517, the Filing Relief for Natural Disasters Act, sponsored by Rep. David Kustoff, R-Tennessee, and Judy Chu, D-California. The process of receiving tax relief from the IRS following a natural disaster typically must follow a federal disaster declaration, which can often come weeks after a state disaster declaration. The bill would provide the IRS with authority to grant tax relief once the governor of a state declares either a disaster or a state of emergency and expand the mandatory federal filing extension under Section 7508(d) of the Tax Code from 60 days to 120 days, providing taxpayers with more time to file tax returns after a disaster.
  • H.R. 1491, the Disaster related Extension of Deadlines Act, sponsored by Rep. Gregory Murphy, R-North Carolina, and Jimmy Panetta, D-California, would extend the amount of time disaster victims would have to file for a tax refund or credit (i.e., the lookback period) by the amount of time afforded pursuant to a disaster relief postponement period for taxpayers affected by major disasters. This legislative solution would place taxpayers on equal footing as taxpayers not impacted by major disasters and would afford greater clarity and certainty to taxpayers and tax practitioners regarding this lookback period.

“The AICPA has long supported these proposals and will continue to work to advance comprehensive legislation that enhances IRS operations and improves the taxpayer experience,” said Melanie Lauridsen, vice president of tax policy and advocacy for the AICPA, in a statement Tuesday. “We are pleased to work closely with each of these Representatives on common-sense reforms that will benefit taxpayers, tax practitioners and tax administration and we’re encouraged by their passage in the House. We look forward to continuing to work with Congress to improve the taxpayer experience.”

The bills were also included in a recent Senate discussion draft aimed at improving tax administration at the IRS that are strongly supported by the AICPA.

The House also passed two other tax-related bills Tuesday that weren’t endorsed in the recent AICPA letter. 

  • H.R. 1155, Recovery of Stolen Checks Act, sponsored by Rep. Nicole Malliotakis, R-New York, would require the IRS to create a process for taxpayers to request a replacement via direct deposit for a stolen paper check. If a check is determined to be stolen or lost, and not cashed, a taxpayer will receive a replacement check once the original check is cancelled, but many taxpayers are having their replacement checks stolen as well. Taxpayers who have a check stolen are then unable to request that the replacement check be sent via direct deposit. The bill would require the Treasury to establish processes and procedures under which taxpayers, who are otherwise eligible to receive an amount by paper check in replacement of a lost or stolen paper check, may elect to receive such amount by direct deposit.
  • H.R. 997, National Taxpayer Advocate Enhancement Act, sponsored by Rep. Randy Feenstra, R-Iowa, would prevent IRS interference with National Taxpayer Advocate personnel by granting the NTA responsibility for its attorneys. In advocating for taxpayer rights, the National Taxpayer Advocate often requires independent legal advice. But currently, the staff members hired by the National Taxpayer Advocate are accountable to internal IRS counsel, not the Taxpayer Advocate, creating a potential conflict of interest to the detriment of taxpayers. The bill would authorize the National Taxpayer Advocate to hire attorneys who report directly to her, helping establish independence from the IRS. 

House  Ways and Means Committee Chairman Jason Smith, R-Missouri, applauded the bipartisan House passage of the various bills, which had been unanimously passed by the committee.

“President Trump was elected on the promise of finally making the government work better for working people,” Smith said in a statement Tuesday. “This bipartisan legislation helps fulfill that mandate and makes improvements to tax administration that will make it easier for the American people to file their taxes. Those who are rebuilding after a natural disaster particularly need help filing taxes, which is why this set of bills lightens the load for taxpayers in communities struck by a hurricane, tornado or some other disaster. With Tax Day just a few days away, we must look for common-sense, bipartisan ways to make filing taxes less of a hassle.”

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In the blogs: Many hats

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Teaching fraud; easement settlement offers; new blog on the block; and other highlights from our favorite tax bloggers.

Many hats

  • Taxbuzz (https://www.taxbuzz.com/blog): There’s sure an “I” in this “teamwork:” What to know about potential IRS and ICE collaboration.
  • Tax Vox (https://www.taxpolicycenter.org/taxvox): How IRS data would likely be unhelpful validating SNAP eligibility.
  • Yeo & Yeo (https://www.yeoandyeo.com/resources): How financial benchmarking (including involving taxes) can help business clients see trends, pinpoint areas for improvement and forecast future performance.
  • Integritas3 (https://www.integritas3.com/blog): One way to take a bite out of crime, according to this instructor blogger: Teach grad students how to detect, investigate and prevent financial fraud.
  • HBK (https://hbkcpa.com/insights/): Verifying income, fairly distributing property, digging the soon-to-be-ex’s assets out of the back of the dark, dark closet: How forensic accounting has emerged as a crucial element in divorces.

Standing out

Genuine intelligence

  • AICPA & CIMA Insights (https://www.aicpa-cima.com/blog): How artificial intelligence and other tech is “Reshaping Finance,” according to this podcast. Didem Un Ates, CEO of a U.K.-based company offering AI advisory services, tackles the topic.
  • Taxjar (https:/www.taxjar.com/resources/blog): How AI and automation can help even the knottiest sales tax obligations and problems.
  • Dean Dorton (https://deandorton.com/insights/): Favorite opening of the week: “The madness doesn’t just happen on college basketball courts — it also happens when your finance team is stuck using a legacy on-premises accounting system.”
  • Canopy (https://www.getcanopy.com/blog): Top client portals for accounting firms in 2025.
  • Mauled Again (https://mauledagain.blogspot.com/): Despite what Facebook claims, dependents have to be human.

New to us

  • Berkowitz Pollack Brant (https://www.bpbcpa.com/articles-press-releases/): This Florida firm offers a variety of services to many industries and has a good, wide-ranging blog. Recent topics include the BE-10, nexus and state and local tax obligations, IRS cuts and what to know about the possible bonus depreciation phase out. Welcome!

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Accounting

Is gen AI really a SOX gamechanger?

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By streamlining tasks such as risk assessment, control testing, and reporting, gen AI has the potential to increase efficiency across the entire SOX lifecycle.

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