The U.K.’s accounting watchdog gave a “scathing” and “highly critical” initial report of EY’s conduct in NMC Health Plc’s audit, lawyers for the collapsed hospital operator alleged in the £2 billion ($2.7 billion) trial.

The Financial Reporting Council’s provisional report found EY “demonstrated a complete lack of professional skepticism” and failed “to be alert to conditions that may have indicated possible fraud,” in its last audit of NMC Health for 2018, lawyers for NMC’s administrator, Alvarez & Marsal said in a court filing. 

“EY’s Audit of NMC was deficient in multiple respects. These failings are extremely serious,” the FRC’s provisional report concluded, according to court filings by NMC’s lawyers prepared for the lengthy civil trial.

Alvarez & Marsal sued EY in London alleging negligence and failure to spot billions in hidden debt between 2012 and 2018 when EY was the auditor. NMC was put into administration in 2020 following allegations of fraud at the health care provider. 

EY has “comprehensively challenged” NMC’s arguments around the report, its lawyers said in court filings. EY denies the allegations and said the claims were “unfounded.”

It is a provisional report that has not been made public until now. The FRC made clear at a pre-trial hearing that the report is not regarded as independent expert opinion, according to EY’s lawyers. “The ‘findings’ on which NMC appears to place such a store, and which EY rejects, are in fact inadmissible and should be disregarded.”

An FRC spokesperson didn’t respond to an email for comment on the status of its final report.

The collapse of NMC sparked a flurry of lawsuits and investigations in the U.K. and U.S. as different sides point the finger of blame. The U.K.’s markets watchdog previously censured the fallen Middle Eastern hospital operator, saying the once listed firm misled investors about its debt position by as much as $4 billion.

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It is getting a little difficult to talk about a post-tax filing season after April 15, 2025. With the use of tax extensions and the number of disaster-relief related extensions, many tax return preparers are seeing the tax filing season continue through the summer and fall.

It was the 70th anniversary of the April 15 tax filing deadline this year. Still, the statistics being reported by the Internal Revenue Service look fairly normal compared to the 2024 tax filing season. By April 18, 2025, the IRS reports that 140,633,000 tax returns had been filed, up about 1.1% from 2024. The IRS notes that typically an additional 10% of returns will be filed by the extended tax deadline of Oct. 15, 2025, representing an additional 16% of tax revenue.

(Read more: “2025 tax season wrap up: The final numbers.”)

Further, all or part of 10 states had filing deadlines extended due to natural disasters, with filing deadlines ranging from May 1, 2025, to Nov. 3, 2025. The IRS typically releases an additional filing update in mid-July.

Tax refunds for 2025 of 86,021,000 were similar to 2024. The refund amount was an average of $2,942, up 3.3% from 2024. E-filings by tax professionals were 72,504,000, up by 1.7% from 2024, while self-prepared e-filings were up more modestly to 63,726,000. One interesting statistic from the IRS was that visits to IRS.gov were down significantly from 571,496,000 in 2024 to 322,948,000 in 2025.

The 2025 tax return itself was not too different compared to 2024, except for the usual inflation adjustments. Additional Form 1099-K filings perhaps made the most significant change for 2025 filings.

There were a few provisions from prior tax legislation still coming into effect in 2024, such as the ability to transfer the Clean Vehicle Credit to the dealer, which did result in some confusion and at least temporarily rejected claims for the credit.

Congress in 2024 did not adopt any major tax legislation to add further changes. The 2026 tax filing season could look very different depending upon whether Congress manages to pass new tax legislation this year. Tax professionals will have the expiration of the individual provisions of the Tax Cuts and Jobs Act to deal with if Congress does not act, and potentially new changes to deal with if Congress does act, although it is not clear how many of those changes might be effective for 2025.

Congress

Congress has approved a budget framework for a budget reconciliation tax package with a focus on extending those individual provisions from the Tax Cuts and Jobs Act. However, Congress is also trying to squeeze in some or all of President Trump’s tax proposals, including no tax on Social Security benefits, no tax on overtime, no tax on tips, a possible reduction in the corporate tax rate for domestic manufacturers, a deduction for interest on car loans, and perhaps a modification of the state and local tax deduction limit.

Possible revenue offsets to come within the budget framework numbers include spending cuts, tariff revenue, assumptions about economic growth resulting from the legislation, repeal of some clean energy credits, and using a budget gimmick to assume that extending current provisions in the Tax Code do not require revenue offsets, even though they add to the deficit.

It will be difficult to accomplish everything that congressional Republicans hope to include while also appeasing the deficit hawks among their members and Republican moderates vowing to preserve Medicaid.

The House has already introduced a series of tax bills addressing matters such as timing of receipt of electronic submissions, communication of math adjustments, disaster relief (including tying relief to state as well as federal disaster declarations), the ability to replace stolen checks electronically, and a bill to enhance certain administrative functions.

IRS

For the IRS, along with most of the federal government, it was far from a normal tax season. Having just staffed up for more enforcement, customer service, and technology improvements thanks to funding from the Inflation Reduction Act, the IRS is now facing a possible 25% reduction in its workforce through a deferred resignation program and a voluntary separation incentive program.

In addition, although it is still tied up in the courts, there may still be departures of provisional employees. Leadership at the IRS has also been unstable, with three interim IRS commissioners since IRS Commissioner Daniel Werfel resigned on Jan. 17, 2025.

Other changes announced by the IRS include elimination of the beneficial ownership information reporting requirement for domestic entities and declaring obsolescent a variety of old guidance.

(Read more: “Lessons from tax season.“)

Congress acted to overturn the IRS requirement for crypto broker DeFi reporting on Form 1099-DA. The IRS also announced the withdrawal of the final regulations on partnership basis-shifting transactions involving related parties as a transaction of interest.

However, Revenue Ruling 2024-14 appears to remain in effect, providing that the economic substance doctrine applies where basis shifting among related parties does not have economic purpose or substance. There are also indications that the IRS Direct File program, which was around for 2024 and 2025, will not be continued for future years.

Summary

The relative stability of the 2025 tax filing season is likely to be very different next tax filing season. Congress hopes to pass major tax legislation, some of which will preserve the status quo but other parts of which will present new tax filing challenges.

It is still too early to ascertain the impact on the IRS; however, the loss of so many employees and leadership turnovers point to less enforcement and compliance activity, and less revenue collected from such activities, including a pullback of the effort to increase partnership audit activity. There could also be a return to declines in customer service.

At the American Bar Association Tax Section meeting in Los Angeles in February 2025, no representatives of the Treasury or the IRS were permitted to attend or participate in the usual discussion panels.

At the time of this writing, the next meeting of the Tax Section was due in mid-May, in Washington, D.C. It will be interesting to see if government panelists are permitted to go the few blocks to the conference. Usually, the exchange of ideas is very helpful to the tax professionals in attendance and to the government personnel seeking comments on proposed guidance.

Big Four firm PwC announced new agentic AI capacities, including a model that proactively identifies areas of value leakage and acts inside the tools teams already use to fix them itself. 

The new solution, Agent Powered Performance, combines continuous AI-driven insight with embedded execution to address the problem of businesses only finding problems when they have already hurt performance. By actively monitoring and working inside the client’s existing systems, though, PwC’s agents can actively and autonomously address such issues. 

The software, which is supported by PwC’s recently released Agent OS coordination platform, is  embedded in enterprise systems to sense where value is leaking, think through the most effective performance strategies using predictive models and industry benchmarks, and act directly in tools like ERP or CRM software to make improvements stick. 

The system connects directly into ERP environments, continuously monitors key metrics, and acts inside the tools teams already use. For example, a supply chain agent might detect rising shipping costs and automatically reroute deliveries to reduce spend. Finance agents can spot and correct billing errors before they reach the customer. Clients typically see measurable efficiency gains in the first quarter, with continued improvements over time as the system learns and adapts.

“Too many transformations still rely on one-off pilots and stale data, stretching the gap from insight to impact and suffocating ROI,” said Saurabh Sarbaliya, PwC’s principal for enterprise strategy and value. “Agent Powered Performance flips the economics by distilling PwC’s industry transformation playbooks into AI agents that turn static insights into compounding gains, without rebooting each time.”

Agent Powered Performance is platform-agnostic and built on an open architecture so it can work across different LLMs based on client preferences and task-specific needs. It works with major enterprise platforms including Oracle, SAP, Workday and Guidewire.

Agent OS Model Context Protocol

PwC also announced that its Agent OS AI coordination platform now supports the Model Context Protocol, an open standard from Amazon-backed AI company Anthropic. 

By integrating this standard, agent systems registered as MCP servers can be used by any authorized AI agent. This reduces redundant integration work and the overhead of writing custom logic for each new use case. By standardizing how agents invoke tools and handle responses, MCP also simplifies the interface between agents and enterprise systems, which will serve to reduce development time, lower testing complexity, and cut deployment risk. Finally, any interaction between an agent and an MCP server is authenticated, authorized and logged, and access policies are enforced at the protocol level, which means that compliance and control are native to the system—not layered on after the fact. 

This means that agents are no longer siloed. Instead, they can operate as part of a coordinated, governed system that can grow as needs evolve, as MCP support provides the interface to external tools and systems. This enables organizations to move beyond isolated pilots toward integrated systems where agents don’t just reason, but act inside real business workflows. It marks a shift from experimentation to adoption, from isolated tools to scalable, governed intelligence.

Research Composer

Finally, a PwC spokesperson said the firm has also launched a new internal tool for its professionals called Research Composer, a patent-pending AI research agent embedded in the firm’s ChatPwC suite, designed to accelerate insight generation by combining web data with PwC-uploaded content. 

Professionals will use the Research Composer to produce in-depth, citation-backed reports for either the firm or its clients. The solution is intended to enhance the quality of client work by equipping teams with research and strategic analysis capabilities. 

The AI agent prompts users through a step-by-step research workflow, allowing them to shape how reports are packaged—tailoring the output to meet strategic needs. For example, a manager in advisory services might use Research Composer to evaluate white space opportunities across industries or geographies, drawing from internal reports and up-to-date market data.