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November’s election is shaping up to be critical to tax planning

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2 years ago

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The nearing November elections will be determinative for tax outcomes, say observers. That’s not just due to the presidential election, according to Rochelle Hodes, Washington National Tax Office principal at Top 25 Firm Crowe. “It’s not just the presidential election,” she said. “Both houses of Congress are also at stake and might tip either way.”

“The tax proposals are not the kind that are able to be implemented by regulation or executive order,” she explained. “There is significant complication this time around, including the expiring Tax Cuts and Jobs Act provisions. Whoever takes control of the next Congress will have to figure out what to do about those provisions. The cost of extending all of the provisions is $4.6 trillion. Most of them are related to individuals. If they are allowed to expire, that would raise the tax for many individuals, which is an unattractive proposition for any president or for Congress. The decision will have to be made about which will be allowed to expire, whether or not some of the provisions will be changed in order to accommodate whatever budget goals are agreed upon, then the decision and consensus will have to be made concerning offsets to pay for the resolution of expiring provisions.”

Each party has taken a position on the TCJA, noted Hodes. “On the Republican side, the TCJA was the central tax policy accomplishment of the Trump administration,” she said. “They would make permanent the double standard deduction, for example. It’s unclear whether or not they want to extend only the positive and not the negative provisions. For example, the SALT cap of $10,000 has been very unpopular with high-tax states. While a lot of them might be blue states, a lot of the rest and Congress are not. So SALT has garnered a lot of attention. In general, Republicans want to make the expiring provisions permanent.”

Donald Trump and Kamala Harris - facing pics
Donald Trump and Kamala Harris

Stephen Maturen/Getty Images and/Photographer: Stephen Maturen/Ge

Meanwhile, she continued, “The Democrats and the Harris campaign have put forth the view that they are in favor of extending the expiring provisions to the extent that an individual making less than $400,000 per year and small businesses are not going to have an increase in tax. There has been much written about how that will be accomplished.” 

Of the two different approaches to the TCJA, the Democrats may be “easier” in that they have put forth offsets for the TCJA extension in light of the $400,000 limit. 

Additional Harris proposals focus on the middle class and small business, according to Hodes. “They have offsets they can get, such as a 25% minimum tax on those with more than $100 million in wealth, raising the corporate tax from 21% to 28%. Their raise in the capital gains tax rate is interesting in that Harris recently took a stand that was less of an increase than originally planned in the Green Book — 28% for those with income of more than $1 million. Interestingly, I had trouble getting more concrete information about whether that would also cover qualified dividends. It was unclear from their statement if they were tied together, and was also unclear about the investment income tax. The Green Book proposal to increase that tax, as well as her comments, did not address that, so our chart [available here] assumes that the increase in the Green Book is where Harris would be. All of these increases are raised off the extension of expiring provisions for those making less than $400,000.”

On the Republican side, there are different views about offsets and when they are needed, she added: “For instance, there is a group of Republicans that view many of the TCJA provisions as good for the economy that would drive increases in the economy and economic growth so that an offset would not be necessary. It doesn’t appear that there is a consensus on which provisions in the TCJA should be permanent. How do you figure out who will win in negotiations and how do you plan for uncertainty — that kind of planning is what a lot of them will have to engage in. Some of that uncertainty will be removed after the election.”

For high-net-worth individuals subject to the estate tax, things will become more complicated, according to Hodes. “If either party wins a majority in both houses as well as the presidency, there will be a better understanding of the direction of how the TCJA issues will be resolved, and the direction that other legislation might take,” she explained. “If we have a divided government, I don’t think the November elections will bring much clarity. There will be proposals that will start to develop momentum, as well as some extenders during the lame duck session, but I don’t believe the TCJA can be resolved then. The year 2025 is going to be a very interesting tax legislative year.”

Hodes advised taxpayers to look at the various proposals and identify those that really make a difference — for example, corporate and individual rates for the highest earners. The expiration of Code Section 199A, the qualified business income deduction for pass-throughs, is set to expire. “A lot of small businesses rely on this,” she said. “Does it make another entity more attractive to conduct business? Entities that have taken the deduction need to model and see how a combination of changes will affect them.”

Meanwhile, the Harris proposal to tax unrealized capital gains, if it gains traction in a Democrat-controlled House and Senate, could become the most difficult proposal in the Tax Code to administer, according to Jeffrey Kelson, co-leader of the national tax practice at Top 25 Firm EisnerAmper.

“Harris expressed broad support for a plan to introduce a minimum income tax of 25%. Anyone with a net wealth of more than $100 million would be subject to a prepayment of tax on unrealized gain. If the asset were held and subsequently went down in value, they would be eligible for a refund,” he noted. “Once this is done, it would be necessary to start all over again to value the assets for the next year. It would be very difficult on both sides, and a lot of people might have to sell assets to pay the tax.”

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AI-Driven Automation and Continuous Accounting Frameworks

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5 days ago

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August 15, 2026

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The accounting profession is undergoing a fundamental structural transition as enterprise finance departments shift from periodic month-end closes toward automated continuous accounting models. By integrating specialized machine learning algorithms directly into enterprise resource planning (ERP) platforms, chief accounting officers are transforming financial reporting from a retrospective exercise into a real-time operational asset.

The Shift from Periodic Close to Continuous Financial Reporting
Traditional accounting workflows heavily relied on manual data reconciliation, spreadsheet calculations, and multi-week closing cycles at the end of each fiscal period. In contrast, continuous accounting frameworks utilize automated software agents to process, validate, and post transactional data in real time as business activities occur.

Automated bank reconciliation tools cross-reference incoming bank feeds, invoice records, and purchase orders automatically. By resolving transactional variances instantly throughout the month, corporate accounting teams eliminate the traditional workload spikes associated with quarterly and annual closes.

Machine Learning in Audit Trails and Anomaly Detection
Advanced natural language processing (NLP) and machine learning tools are redefining internal audit and financial control environments. Automated systems analyze 100% of general ledger entries, identifying anomalous transactions, duplicate payments, and unauthorized journal entries in real time.

Rather than relying on random statistical sampling, corporate internal auditors can focus their attention on high-risk flags automatically surfaced by algorithmic monitoring platforms. This continuous risk assessment strengthens internal controls over financial reporting (ICFR) and significantly reduces fraud risk.

Evolving Roles for Accounting Professionals
As routine data entry and manual reconciliation tasks become fully automated, the skill set required for accounting professionals is shifting toward data analysis, system design, and strategic business advisory.
– Systems Governance: Accountants are increasingly responsible for monitoring algorithmic accuracy and managing data integration pipelines.
– Business Partnership: Finance professionals leverage real-time financial dashboards to advise operational leaders on margin management and working capital allocation.
– Regulatory Compliance Management: Accounting teams utilize automated platforms to ensure compliance with dynamic tax codes and international accounting standards.

Core Implementation Recommendations
1. Deploy Automated Reconciliation Tools: Integrate continuous transaction processing modules into existing enterprise ERP architectures.
2. Establish Algorithmic Governance Controls: Implement strict internal testing protocols to ensure automated accounting rules comply with GAAP/IFRS standards.
3. Reskill Accounting Teams: Invest in training finance staff on data analytics, workflow automation, and predictive financial modeling.

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Global ESG Reporting Standards and Double Materiality Compliance

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1 week ago

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August 9, 2026

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Corporate accounting departments face expanding reporting expectations as international sustainability disclosure standards achieve regulatory enforcement across major global jurisdictions. Chief Accounting Officers (CAOs) and corporate controllers are establishing rigorous internal accounting controls to treat Environmental, Social, and Governance (ESG) metrics with the same data precision, auditability, and governance as traditional financial statements.

Regulatory Harmonization Under Global Sustainability Frameworks
The implementation of standardized sustainability reporting frameworks—notably rules established by international sustainability accounting boards—has created unified expectations for public and large private enterprises. Corporations must report standardized metrics covering greenhouse gas emissions (Scope 1, 2, and material Scope 3), energy utilization, workforce demographics, and supply chain governance.

In Europe and other participating international jurisdictions, double materiality principles are mandatory. Under double materiality, organizations must report both how external sustainability risks impact corporate financial performance, and how internal corporate operations affect surrounding environmental and social structures.

Integrating Sustainability Metrics into Core ERP Systems
To provide auditable non-financial data, enterprise organizations are integrating specialized carbon accounting and ESG management platforms directly into core ERP systems. Automated data collectors capture energy utility invoices, logistics fuel consumption metrics, and vendor compliance records in real time.

Establishing automated, traceable data pipelines ensures that non-financial reporting is supported by clear audit trails. This structured approach allows external financial auditors to provide reasonable assurance on sustainability disclosures during annual corporate reporting cycles.

Financial Impacts and Capital Market Disclosure
Accurate ESG reporting directly influences corporate cost of capital and institutional credit ratings. Commercial lenders and institutional asset managers systematically incorporate sustainability metrics into risk pricing models. Companies that demonstrate transparent, verifiable progress in operational energy efficiency and climate risk mitigation benefit from expanded access to green bond markets and lower debt pricing.

Action Steps for Accounting Leadership
1. Implement Double Materiality Frameworks: Conduct comprehensive assessments to identify material financial and operational sustainability metrics.
2. Build Auditable Non-Financial Data Pipelines: Automate ESG data collection within core accounting software to ensure data integrity.
3. Align Sustainability with Annual Financial Filings: Prepare non-financial disclosures concurrently with financial statements to satisfy regulatory audit expectations.

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Accounting

Modernizing Internal Controls: Machine Learning and Continuous Monitoring in Auditing

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2 weeks ago

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August 5, 2026

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Internal audit departments and corporate risk managers are modernizing internal control frameworks by shifting from periodic sampling techniques to continuous monitoring and machine learning analytics. As operational data volumes increase across enterprise organizations, automated control testing ensures financial integrity, prevents corporate fraud, and streamlines annual audit engagements.

The Limitation of Periodic Audit Sampling
Historically, internal and external auditors evaluated internal controls by reviewing random samples of financial transactions—often analyzing less than five percent of total ledger entries. In complex enterprise environments, periodic sampling methods carry inherent risks of overlooking localized financial misstatements, unauthorized disbursements, or operational control breakdowns.

In 2026, progressive internal audit functions are utilizing automated continuous monitoring platforms that evaluate one hundred percent of financial transactions in real time. Continuous control auditing systems continuously monitor general ledger entries, procurement approvals, and expense reimbursements across all operating subsidiaries.

AI-Powered Fraud Detection and Anomaly Identification
Machine learning models trained on historical corporate financial data excel at identifying subtle transactional anomalies that indicate potential fraud or operational error. Automated systems instantly flag duplicate invoice payments, unapproved vendor creation, unusual journal entry timing, and unauthorized override of authority thresholds.

When an anomaly is detected, the automated auditing platform generates an instant risk alert, allowing internal audit teams to investigate root causes immediately. Early detection prevents minor operational errors from escalating into material weaknesses in financial reporting.

Streamlining External Audit Preparation
Continuous internal control monitoring delivers significant benefits during annual external financial audits. External audit firms can review continuous audit logs and automated control testing documentation, reducing the time required for manual field testing.

This integrated approach lowers overall audit compliance fees, reduces administrative burdens on corporate accounting staff, and provides senior management and audit committees with real-time visibility into the organization’s overall risk profile.

Core Implementation Guidelines
1. Transition to 100% Data Testing: Replace legacy sampling methods with automated continuous audit monitoring systems.
2. Deploy Anomaly Detection Algorithms: Implement machine learning models to identify unauthorized transactions and operational control overrides.
3. Align Internal and External Audit Workflows: Coordinate continuous control testing protocols with external auditors to optimize annual compliance cycles.

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