Accounting

Lawmakers advance tax legislation for billionaires, IRS, Tax Court

Published

10 months ago

September 18, 2025

Democrats in the Senate and House proposed a bill aimed at ensuring billionaires pay a “fair share” of taxes, without actually raising their tax rate under current law, while Republicans advanced tax legislation of their own pertaining to the Internal Revenue Service and the U.S. Tax Court.

The Democrats’ Billionaires Income Tax Act would expand on an accounting method already used in the Tax Code and would apply to fewer than 1,000 taxpayers and raise more than $500 billion. Only taxpayers with more than $100 million in annual income or more than $1 billion in assets for three consecutive years would be covered by the proposal.

It would require high income and high net worth taxpayers to pay tax on the income they earn on an annual basis through mark-to-market taxation. It would also end the ability of wealthy taxpayers to buy and hold appreciating assets and borrow against those assets to support their lifestyles tax-free. The bill would also stop tax breaks that allow high income and high net worth taxpayers to shield their income from taxation, including the ability to to transfer untaxed appreciated assets to their heirs at death and such heirs to sell such assets completely tax-free.

The bill would tax gains and losses from assets like stocks that can be valued on an annual basis and they would be marked to market each year. Billionaires would have to pay tax on gains or take deductions for losses, whether or not they sell the asset. Taxpayers would be able to carry back their losses for up to three years under certain circumstances.

Senate Finance Committee Ranking Member Ron Wyden, D-Oregon, reintroduced the Billionaires Income Tax Act on Wednesday, while Rep. Steve Cohen, D-Tennessee, and Don Beyer, D-Virginia, introduced identical legislation in the House, making this the first Congress in which the Billionaires Income Tax was a bicameral proposal. The bill was also introduced in 2023.

“While people like nurses and firefighters pay taxes straight out of every paycheck, there’s a thicket of little-known tricks and accounting rules that allow billionaires to opt out of paying a fair share of tax on the income they enjoy,” Wyden said in a statement. “Billionaires and Republicans are going to offer up the same set of trickle-down arguments to pretend this proposal would bring about the end of western civilization. The only time you hear billionaires claim they can’t scrounge together any cash is when somebody brings up taxes, and odds are a lot of these mega-wealthy individuals are crying poverty from their yachts and private islands. This is a carefully designed proposal that draws on accounting methods already used in the tax code and raises revenue without increasing any tax rates.”

There would be a deferral charge on gains from assets like real estate. When a billionaire sells a nontradable asset, such as real estate or a business interest, they would have pay their usual tax, plus a “deferral recapture amount,” similar to interest on tax deferred while the individual held that asset. This approach would eliminate the need for annual valuations of these nontradable assets. The amount owed would be calculated by allocating an equal amount of gain to each year the billionaire held that specific asset, determining how much tax would have been owed on the gain in each year, and assessing interest on unpaid tax for the time the tax was deferred. The interest rate used would be the short-term federal rate plus one percentage point, and no interest accrues prior to the date of enactment of the proposal or the first tax year the individual is subject to the Billionaires Income Tax, whichever is later.

Under the legislation, there would be transition rules. The first time billionaires’ tradable assets are marked-to-market, they could elect to pay the resulting tax over five years. They could also elect to treat up to $1 billion of tradable stock in a single corporation as a nontradable asset, which will help to ensure that the proposal does not affect the ability of an individual who founds a successful company to maintain their controlling interest. The proposal also contains rules to prevent avoidance of the Billionaires Incomes Tax.

The legislation is cosponsored by Sen. Sheldon Whitehouse. D-Rhode Island, Elizabeth Warren, D-Massachusetts, Bernie Sanders, I-Vermont, Tina Smith, D-Minnesota, Ben Ray Luján, D-New Mexico, Peter Welch, D-Vermont, Angela Alsobrooks, D-Maryland, Tammy Baldwin, D-Wisconsin, Richard Blumenthal, D-Connecticut, Tammy Duckworth, D-Illinois, John Fetterman, D-Pennsylvania, Martin Heinrich, D-New Mexico, Mazie Hirono, D-Hawai’i, Edward J. Markey, D-Massachusetts, Jeff Merkley, D-Oregon, Chris Murphy, D-Connecticut, Patty Murray, D-Washington, Jack Reed, D-Rhode Island, Brian Schatz, D-Hawai’i, and Chris Van Hollen, D-Maryland. The bill has been endorsed by over 100 supporting organizations.

IRS and Tax Court bills

On the other side of the aisle, Rep. Glenn Grothman, R-Wisconsin, introduced the Fair and Accountable IRS Reviews Act to change the IRS penalty process by requiring that all proposed penalties be reviewed and approved by the issuing employee’s immediate supervisor before they can take effect. Currently, any employee the IRS deems a supervisor can approve proposed fines on taxpayers. Due to a 2024 change in agency policy, the definition of “immediate supervisor” was loosened to allow approval from almost anyone at the IRS.

“Taxpayers deserve fair treatment and strong safeguards against unjust penalties,” Grothman said in a statement. “Right now, IRS agents can approve penalties brought forth by employees they have had little to no interaction with, which begs the question of whether taxpayers are receiving appropriate reviews of their cases. My bill restores accountability by requiring an agent’s direct supervisor review and approve any penalty before it is assessed. This simple safeguard will help prevent unnecessary or unfair fines and protect hardworking Americans from bureaucratic overreach.”

The bill passed by a unanimous vote of 44-0 in the House Ways and Means Committee.

Another bill passed by the committee, the Tax Court Improvement Act, is bipartisan and was introduced by Rep. Nathaniel Moran, R-Texas, and Terri Sewell, D-Alabama. It would authorize the Tax Court to sign subpoenas to produce books, papers, documents, electronically stored information, or tangible things for purposes of discovery or evidence, prior to a hearing. It would also hold judges to the standards for disqualification as other federal judges, as well as clarifies that the Tax Court has jurisdiction to extend a taxpayer’s deadline where timely filing was impossible or impractical. The House Ways and Means Committee voted 30-0 to pass the bill.

Accounting

Continuous Auditing Transforms Corporate ERPs

Published

4 days ago

July 21, 2026

Business Finance News

continuous auditing transforms corporate erps

As corporate accounting departments cross the threshold into late July 2026, the adoption of continuous, automated auditing systems has reached a definitive turning point. Driven by advances in artificial intelligence and deep integration with modern Enterprise Resource Planning (ERP) platforms, leading finance organizations are moving away from traditional, periodic post-hoc audits in favor of real-time, 100% transactional verification. This technological transition is redefining internal control environments, reducing compliance costs, and eliminating the structural delays inherent in legacy quarterly closing processes.

Unlike traditional auditing frameworks that rely on statistical sampling—a process that inevitably leaves operational blind spots—continuous auditing software monitors operational data feeds continuously. Every purchase order, electronic invoice, payroll disbursement, and cross-border wire transfer is automatically cross-referenced against established corporate governance parameters, regulatory tax schedules, and anti-fraud algorithms in real time. Anomalies or unauthorized ledger entries are flagged instantly, allowing internal audit teams to investigate and remediate compliance gaps immediately rather than months after the close of a financial period.

The implications for executive financial management are far-reaching. By embedding continuous verification directly into daily transaction workflows, chief financial officers gain uninterrupted visibility into the organization’s true financial standing. Real-time balance sheet auditing eliminates the severe operational bottlenecks associated with month-end and quarter-end financial reconciliations, freeing accounting professionals to focus on strategic financial modeling, tax planning, and capital allocation rather than manual data entry and spreadsheet consolidation.

However, implementing continuous auditing requires accounting leadership to invest heavily in data governance and technical upskilling. Internal audit teams must evolve from manual ledger reviewers into system architects capable of auditing complex algorithms and validating automated data pipelines. Accounting firms and corporate controllers that master continuous auditing will establish a resilient compliance framework capable of meeting stringent international regulatory standards with total transparency.

Accounting

U.S. Imposes New 50% Tariffs on Canadian Imports Under Rare Legal Provision

Published

5 days ago

July 20, 2026

Business Finance News

U.S. Imposes New 50% Tariffs on Canadian Imports Under Rare Legal Provision

WASHINGTON — In a major escalation of cross-border trade friction, U.S. President Donald Trump has signed executive orders imposing new 50% tariffs on a wide selection of Canadian exports, citing discriminatory practices by Ottawa targeting American auto, dairy, and beverage industries.

The new duties, announced Monday, will take effect in 30 days. They target a broad spectrum of consumer and industrial goods—ranging from wine, liquor, and milk products to commercial cement, furniture, clothing, and hockey equipment.

Untested Legal Mechanism

To enact the sweeping measures, the administration invoked Section 338 of the Tariff Act of 1930—a rarely used legal provision allowing the executive branch to levy additional tariffs of up to 50% on foreign nations deemed to discriminate against U.S. commerce.

White House officials noted that Section 338 addresses trade discrimination rather than national security or economic emergencies. The move comes months after prior global emergency tariffs faced legal challenges in domestic courts, signaling Washington’s pivot toward alternate statutory authorities to maintain import duties.

Senior administration officials briefed reporters that the measure directly responds to Canadian provincial bans on U.S. alcohol, restrictions on American vehicle exports, and import quota disparities affecting U.S. dairy and cheese producers relative to third-party trading partners.

“While the administration continues to secure reciprocal trade agreements globally, Canada retaliated against efforts to protect domestic industry,” U.S. Trade Representative Jamieson Greer stated.

USMCA Impact and Carve-Outs

Significantly, the newly ordered 50% duties will apply to designated items even if they otherwise comply with the United States-Mexico-Canada Agreement (USMCA).

However, the administration confirmed key targeted exemptions:

Energy products (including oil and natural gas)
Potash and critical minerals
Fish and seafood
Goods already governed by sector-specific duties (such as existing steel and aluminum tariffs)

Administration representatives emphasized that the tariffs do not stem from recent disputes concerning drifting Canadian wildfire smoke, noting that policy options regarding environmental spillover remain under separate review.

Canadian Response and Market Reaction

Following the White House announcement, the Canadian dollar experienced a sharp decline against the U.S. dollar, falling approximately 0.4% during evening trading.

Canadian Prime Minister Mark Carney issued a statement emphasizing that Canada’s earlier counter-duties had merely matched previous U.S. trade actions. “Canada stands ready to engage intensively to address outstanding issues with the U.S. to the mutual benefit of our citizens,” Carney stated, pointing to detailed proposals Ottawa submitted to modernize the USMCA framework.

Ontario Premier Doug Ford took a firmer stance, urging a “dollar-for-dollar” reciprocal response if the measures go into effect on August 19.

With a 30-day implementation window before the duties officially lock in, industry associations and trade groups on both sides of the border are calling for urgent bilateral negotiations to avert further supply chain disruption across North America.

Accounting

Automated Continuous Auditing: Transforming Compliance and Real-Time Financial Oversight

Published

5 days ago

July 20, 2026

Business Finance News

Transforming Compliance and Real-Time Financial Oversight

The traditional accounting paradigm—defined by periodic monthly closures and post-hoc annual audits—is rapidly giving way to continuous, automated financial oversight. As of July 2026, forward-thinking accounting practices and multinational corporate finance departments are leveraging continuous auditing systems powered by advanced machine learning models. These systems monitor operational transactions in real time, shifting audit methodologies from sample-based post-analysis to absolute, 100% transaction-level verification.

The operational advantages of continuous auditing are transformative. Standard auditing procedures historically relied on statistical sampling, which, despite rigorous methodology, inherently left gaps where anomalies or fraudulent transactions could go undetected for months. Modern continuous auditing platforms integrate directly with enterprise resource planning (ERP) databases, instantly cross-referencing purchase orders, invoices, bank feeds, and tax records. Any deviation from established control parameters or unusual transaction behavior triggers immediate flags for internal audit teams, dramatically reducing detection lag from quarters to seconds.

Beyond fraud prevention, continuous auditing fundamentally alters internal reporting and decision-making. Executive leadership no longer has to wait weeks after the close of a quarter to evaluate precise financial standing; real-time verified ledger data provides an uninterrupted view of operating margins, tax liabilities, and cash flow dynamics. This real-time visibility enables corporate controllers to adjust capital allocation strategies dynamically, mitigating liquidity constraints and capitalizing on emerging commercial opportunities far more efficiently than competitors bound to legacy reporting cycles.

However, implementing continuous auditing requires accounting professionals to acquire new analytical capabilities. The role of the auditor is evolving from manual data reconciliation toward system validation, algorithmic model governance, and strategic risk interpretation. Accounting firms and corporate finance departments must invest in continuous technical education, ensuring that audit staff possess the data engineering skills necessary to design, maintain, and evaluate complex automated compliance systems.