Senate Finance Committee members Chuck Grassley, R-Iowa, and Sheldon Whitehouse, D-Rhode Island, introduced bipartisan legislation Tuesday that would coordinate Pell Grants with the American Opportunity Tax Credit and fully exclude Pell Grants from taxable income, while Sen. Tommy Tuberville, R-Alabama, and Roger Marshall, R-Kansas, separately introduced a bill related to President Trump’s campaign promise on exempting overtime pay from taxes.

The first bill, known as the Tax-Free Pell Grant Act, aims to iron out the current Tax Code to enable qualifying students to reap the full benefits of financial aid. The bill would make Pell Grants fully tax-free and no longer require students to subtract Pell Grants from expenses for which the AOTC can be claimed. 

“The Pell Grant program has revolutionized American higher education by helping millions of qualifying students afford the cost of college,” Grassley said in a statement Tuesday. “Our bipartisan Tax-Free Pell Grant Act would cut through confusing tax rules and allow Iowans to take full advantage of this financial student aid program.” 

The Pell Grant program helps millions of young people cover college costs, including tuition, living expenses and other fees. The American Opportunity Tax Credit, which was made permanent in 2015 with bipartisan support, provides students up to $2,500 for tuition and course materials, assisting millions with the cost of college. However, the lack of coordination between the two programs keeps students from maximizing the programs’ benefits. 

The issue mainly affects students at lower-cost schools like community colleges. While Pell Grants used for tuition and fees are tax-free, any portion used to cover other education costs, like living expenses, is taxed. Students are currently required to subtract their Pell Grant from the amount of expenses for which they claim the AOTC. To maximize their AOTC, students can use part of their Pell Grant to cover living expenses even though that portion is taxed. But calculating the optimal amount of the Pell Grant to include in taxable income is complicated for those without access to sophisticated tax advice, so many students leave benefits on the table or forgo claiming the AOTC altogether.  

“Pell Grants – one of Senator Pell’s greatest legacies – have helped make college more affordable for generations of Rhode Islanders,” Whitehouse said in a statement. “Our bipartisan legislation will streamline federal student aid programs and ensure students get the maximum possible benefit to achieve their higher education goals.”

Additional cosponsors include Sen. Ron Wyden, D-Oregon, and Thom Tillis, R-North Carolina. The bill’s introduction comes amid proposals by the Trump administration for a 15.3% reduction in the Department of Education’s budget as well as cuts in spending on higher education and Federal Work-Study, although Trump has expressed support for preserving Pell Grants. 

“The American Association of Community Colleges, which represents the nation’s 1,024 community colleges and their more than 10 million students, enthusiastically endorses the Tax-Free Pell Grant Act,” said Dr. Walter G. Bumphus, president and CEO of the American Association of Community Colleges, in a statement. “This critical legislation will help to ensure that the Pell Grant program has maximum impact on student success. It simplifies the tax code, while making it easier for low-income community college students to qualify for the American Opportunity Tax Credit. The legislation is of particular benefit to students attending low-tuition, locally-focused institutions that help individuals learn the skills needed to earn family sustaining wages — in other words, America’s community colleges. We urge the enactment of this critical legislation.”

Overtime pay

Separately, two Republican senators, Tuberville and Marshall, introduced the Overtime Wages Tax Relief Act, which would create a tax deduction for overtime wages up to $10,000 for individuals and $20,000 for married couples. 

“President Trump campaigned and won on a promise to cut taxes for millions of Americans working overtime—and we are delivering on that promise,” Tuberville said in a statement. “Thousands of Alabamians put in way more than 40 hours a week in order to save for retirement, put their kids through college, and keep the trains running. They should not be punished with higher taxes for working longer hours. Alabama was the first state to pass overtime tax exemptions, and I am hopeful that the federal government will follow suit. I’m proud to join Senators Marshall, Ricketts, and Justice in helping deliver on this critical piece of President Trump’s agenda, which will put American workers first.”

The bill includes a phase-out on eligibility based on income. The deduction would begin to phase out when income reaches $100,000 for individuals or $200,000 for married couples, and would be reduced by $50 for every $1,000 in income above the threshold, similar to the Child Tax Credit. The bill would define overtime to include a wide range of workers such as law enforcement officers, nurses, trade workers, factory employees and other eligible professions, and require employers to report overtime earnings to ensure transparency and accuracy in claiming the deduction.

“President Trump promised relief for millions of hardworking Americans, and we’re proud to help deliver on that with the Overtime Wages Tax Relief Act,” Marshall said in a statement. “Our legislation ensures Kansans keep more of their hard-earned wages and codifies a key pillar of President Trump’s pro-worker agenda as we work to pass our ‘One Big Beautiful Bill.’ It’s time to put American workers first again, and I’m proud to work with Senators Tuberville, Ricketts, and Justice to ensure we do just that.”  

Two other Republicans joined Tuberville and Marshall in introducing the legislation: Sen. Jim Justice, R-West Virginia, and Pete Ricketts, R-Nebraska.

Today’s young CPAs aren’t just looking for a job or paycheck. They’re looking for purpose, impact and flexibility in their careers, preferably at firms that share their values and mission. 

Unlike previous generations, this new wave of CPAs isn’t satisfied with clocking in, doing the work, and waiting a decade to be recognized. They want growth, mentorship, transparency and a seat at the table from Day One. In the past, our profession encouraged us to stay in our lane and climb the ladder gradually. Now it’s about custom-building the ladder to fit our purpose and lifestyle.

Unfortunately, too many firms are still trying to attract and retain talent with old-school tactics despite the intense competition for talent. Pizza parties, casual Fridays and sign-on bonuses are nice, but they aren’t enough when the job still feels transactional. They don’t want to feel like replaceable cogs in a time-tracking machine. They want to feel that their voice matters at their firm and that they’re building something meaningful in their career. 

When firms aren’t willing to update their tech stack, internal culture or hiring tactics, they’ll be perceived as dinosaurs by potential candidates and the pipeline shortage will continue. That’s where using game-based tactics can help.

Gamification

Forward-leaning firms are increasingly turning to gamification to make accounting more attractive to young professionals. Gamification transforms recruiting and training into an interactive, rewarding experience. 

This has been on my mind lately, as a first-time father. Growing up, I learned so much more about math and finance by playing board games like Monopoly and Cash Flow that I did by reading textbooks. In elementary school, my favorite days were when we got to use the PlayStation to learn our shapes and how to count. That was so much better than sitting at my desk and watching the teacher scribble on the blackboard. Why can’t learning be fun in adulthood? 

For instance, when I was at a Big Four firm, my associate “class” was divided into teams and each team was given a case study. We had to do in-depth research on the fly and then present the case to our peers and superiors. Throughout the process we were asked questions by the “judges,” and we earned points for answering correctly under time pressure. It was a lot of fun and so much better than sitting through a training lecture in a windowless conference room. But the case study competition was only a small part of the overall Big Four training we received.

In college, we played Jeopardy with accounting-specific questions and had to answer the questions in Jeopardy-esque “What is …?” fashion. It was fun and challenging. And since every player got a turn in the “hot seat,” these games gave our quieter classmates a chance to be heard and to contribute to the discussion. It was a great way to level the playing field. 

Using game-based tactics to attract and retain talent

Gamification isn’t just for the younger members of your team. Here are five ways that firms can incorporate gamification for everyone throughout the employee lifecycle at your firm:

1. Recruitment engagement: Firms can reimagine the candidate experience with interactive portals, simulation-based interviews, “loyalty” reward points or “game nights” that reveal both skill sets and cultural fit. This approach helps firms stand out while giving candidates a real taste of the firm’s vibe. At CPAcon, the conference I founded, we don’t hold stale job fairs. Instead, firms engage with talent through firm-vs-firm competitions, sponsor-led activations, and arcade-style challenges in which personality and team dynamics shine.

2. Learning and development: Gamification transforms traditional training and continuing education into dynamic experiences. From live CPE game shows to interactive competitions like The Balance Sheet or Post It! that we do at CPAcon, these methods increase retention and turn learning into something professionals look forward to.

3. Career growth and performance: Level-based progression systems, skill-based tournaments and internal leaderboards help employees track their development in a visual, motivating way. Recognizing achievements with XP points, badges or creative perks fosters upward momentum and a sense of ownership. With CPAcon, professionals get recognized for more than just years of experience — they shine through creativity, teamwork, and strategy in real-time. 

4. Mentorship and community: Gamifying mentorship and onboarding encourages connection and accountability. By turning relationship-building into a shared quest — complete with milestones, feedback loops and recognition — firms foster a stronger sense of belonging and support. Community-building is baked into the games and programming at CPAcon and so can your firm. In this setting, mentorship occurs organically without the awkwardness of a forced pairing.

5. Culture and retention: Daily micro-games, team challenges and firm-wide competitions culminate at CPAcon, which can energize culture and reinforce company values. These small touchpoints help employees feel seen, celebrated and connected — the keys to building long-term employee loyalty. Gamifying the experience of being a CPA reminds participants why they chose their career path — and it makes them proud to stay on it.

If you want to start utilizing game-based tactics to attract and retain talent at your firm, make sure the games are relevant, inclusive and accessible. Make sure the challenge level matches the audience’s knowledge, and that there’s a clear connection between the game and real-world skills and goals. Also, make sure to tie in recognition — people love being publicly recognized for their efforts.

At CPAcon, I’ve seen attendees who barely know each other bond over accounting games and walk away feeling like they were part of something bigger. That’s the magic — turning compliance into community. For example, in the Post It! challenge I mentioned earlier, players must correct accounting entries against the clock to ensure accuracy and integrity of the books. If there are errors in a company’s ledger or misclassified expenses, players must keep their cool and Post It right when it truly counts. Here’s a short video of CPA gamification in action.

Gamification ROI

Since you’re likely to encounter skeptics, here are some good metrics and KPIs to show the benefits of using gamification for your recruiting and retention efforts:

• Retention rate post-engagement: Show how people who participated in gamified onboarding or learning stay longer.
• Time to competency: Show how new hires learned faster through game-based modules than through traditional methods.
• Participation rate: Show how many people opted in to the games or challenges.
• Engagement scores: Use surveys to measure whether people feel more connected, motivated, or excited after participating. 
• Referral rate: Show how participants are recommending gamification experiences to peers after taking part.

You can also compare the number of internal promotions and skills progress between employees who engage in game-based learning versus those who don’t. Gamification transforms accounting — which can feel rigid and isolated into something social, energizing and even fun. Think of team competitions, live events, accounting trivia nights or creative budgeting challenges. You’re not just teaching skills — you’re building camaraderie, improving morale and showcasing people’s strengths in new ways.

When done right, gamification doesn’t replace professionalism — it enhances it. It creates community, inspires growth and proves that accounting can be both rigorous and rewarding. What’s not to like? I’ll be speaking more about gamification for accounting firms at the Firm Growth Forum in San Diego in May. I hope to see you there.

The Internal Revenue Service lost 31% of its auditors from buyouts and layoffs tied to Elon Musk’s Department of Government Efficiency, departures that are likely to hamper the agency’s ability to go after tax cheats.

More than 3,600 revenue agents — responsible for collecting tax payments — have left the IRS, according to an IRS watchdog report.

In addition, 18% of revenue officers, who oversee challenging tax cases, and 10% of tax examiners — front-line employees who review returns — have also left the agency, the Treasury Inspector General for Tax Administration said in a recent report.

The IRS downsizing is due to a series of moves, spurred by Musk’s DOGE, to cut the agency’s workforce. More than 7,300 probationary employees were terminated. More than 4,100 workers took Musk’s “Fork in the Road” resignation offer, followed by a second round of buyouts where more than 13,100 were approved to leave, according to the report.

The IRS had a large number of newly hired probationary auditors due to a funding boost under President Joe Biden, who increased funding for tax enforcement to rebuild the agency’s depleted capabilities. That means the cuts targeting recent hires disproportionately affected those with auditing jobs. 

The terminations have been the subject of ongoing litigation.

The report found that auditors in fiscal year 2023 recommended approximately $32 billion in additional tax assessments. The National Bureau of Economic Research has found that auditors more than pay for themselves, with the IRS collecting $6 for every $1 spent on audits of high-income taxpayers.

The departure of auditors could result in a deeper revenue loss for the government since more people may evade paying taxes if they’re less worried about getting caught.

The Yale Budget Lab forecast that laying off about 18,000 IRS employees would result in a net revenue loss of roughly $159 billion over ten years. That could rise to as much as $1.6 trillion over ten years if non-compliance is high, the group said. 

The White House on Friday released a fiscal 2026 budget requesting $163 billion in non-defense savings that it associates with the DOGE effort. Nearly all of the savings the administration claimed would be plowed into a $119 billion boost in military spending. Adding in the loss of tax revenue could mean the DOGE effort causes a net budget deficit increase.

The report found that just 5% of information technology staff had departed and 10% of customer services agents had left. These groups could soon be targeted for a future round of job cuts that the IRS has said it is planning.