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Stephano Slack tops slow quarter for new SEC audit clients

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The departure of audit firms from the Securities and Exchange Commission market can prove a boon for those who remain: Pennsylvania-based auditor Stephano Slack brought on the most new SEC clients in the fourth quarter of 2024 thanks to picking up engagements from an exiting firm — a repeat of a similar situation in the third quarter.

Wayne, Pennsylvania-based Stephano Slack grabbed 11 new clients (and netted 10) from Blue Bell, Pennsylvania-based Morison Cogen, which stopped providing audit services to publicly traded companies in the fall of 2025. (See “Net engagement leaders.“)

That isn’t the only way to pick up new clients, of course: Houston-based HTL International added six of its eight new clients in Q4 from TPS Thayer in Sugar Land, Texas, after the two firms created a strategic collaboration in November that included HTL bringing on the audit team of TPS Thayer.

And while it was a relatively slow quarter for the largest auditing firms, the combination of CBIZ/CBIZ CPAs and Marcum late last year looks likely to benefit a range of audit firms, with Marcum shedding a net of 27 firms. Three out of CBIZ CPAs’ six new clients came from Marcum, while lots of other firms picked up individual Marcum clients. (See “Q4 2024 client gains & losses.”)

The total number of new engagements hit 160, roughly the same as Q3 and much lower than previous two quarters (which had been boosted in part by the implosion of audit firm BF Borgers), but still well above the low numbers from the midst of the COVID pandemic.

SEC clients by filing status, and more

In terms of clients by filing status, KPMG once again led among new large accelerated filers, while Stephano Slack took the lead among non-accelerated filers and small reporting companies. (See “Audit leaders“) Everyone tied for new accelerated filers — with one.

BDO USA took the lead among large auditors in terms of new clients in Q4, and that helped it top the league tables for new market capitalization audited, with the overwhelming majority coming in the form of computer server manufacturer Super Micro Computer Inc.’s $49 billion. BDO also took second in new audit fees, thanks again to Super Micro, which accounted for $4.76 million of the firm’s $5.84 million. (See “New client leaders.“)

Meanwhile, PwC came first in new assets audited, thanks largely to adding asset manager Nuveen, while KPMG came first in new audit fees, with natural gas and electric power distribution company UGI Corp. contributing the most, at $9 million. KPMG also came second in new market cap and new assets audited.

Data for the quarterly rankings are provided by Ideagen Audit Analytics, a premium online intelligence service delivering audit, regulatory and disclosure analysis. Reach them at (508) 476-7007, info@auditanalytics.com or www.auditanalytics.com.

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In the blogs: Breathing room

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Private equity in the profession; green cards and exit taxes; governance for preparers; and other highlights from our favorite tax bloggers.

Breathing room

  • Current Federal Tax Developments (https://www.currentfederaltaxdevelopments.com/): The critical updates of Notice 2025-33, which impacts digital asset brokers and their compliance obligations under IRC Sections 6045, 3406 and related penalty provisions, extend and modify previously granted transitional relief, “offering much-needed breathing room.”
  • Sovos (https://sovos.com/blog/): The IRS will decommission the Filing Information Returns Electronically system in January 2027; all 2026 returns will need to use the new IRS Information Returns Intake System. The window for preparation is closing fast. 
  • Institute on Taxation and Economic Policy (https://itep.org/category/blog/): State legislatures are enjoying a quiet time now, a temporary calm before the storm of the federal tax and budget debate begins raging again.
  • Tax Foundation (https://taxfoundation.org/blog): Illinois policymakers should think twice before taxing GILTI.

Simplify, simplify, simplify

  • Mauled Again (http://mauledagain.blogspot.com/): Why hasn’t the blogger been commenting on the federal legislation that would extend and enlarge tax cuts and tax breaks for wealthy individuals and corporations? The answer is simple. 
  • TaxProf Blog (http://taxprof.typepad.com/taxprof_blog/): The contours of the Supreme Court’s dormant Commerce Clause doctrine of internal consistency, which asks whether a state tax intrinsically overreaches in imposing a burden upon interstate commerce, are difficult to understand. A recent paper examines how uncertainty is suggested again by Zilka v. Tax Review Board
  • The Rosenberg Associates (https://rosenbergassoc.com/blog/): Private equity entered the accounting profession with promises of creating value and fixing many of the pain points in the profession. A recent survey shows that while PE is already delivering on some of those promises, mixed feelings (and warning signs) abound.
  • Wiss (https://wiss.com/insights/read/): The recent Tax Court decision in Soroban Capital Partners LP v. Commissioner has rippled through the financial and legal communities and reinforced the importance of functional roles over formal titles when determining tax liability under self-employment tax.
  • Virginia – U.S. Tax Talk: (https://us-tax.org/about-this-us-tax-blog/): When a foreign national works in the U.S. and is granted stock options, taxation of these options can become complex if the individual later leaves the U.S. and becomes a nonresident alien for tax purposes. 

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Oil industry gets $1B tax tweak in GOP’s Senate bill

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Senate Republicans included a tax break estimated to be worth more than $1 billion for oil and gas producers in their version of President Donald Trump’s sprawling fiscal package. 

The provision would allow energy companies subject to a 15% corporate alternative minimum tax to deduct certain drilling costs when calculating their taxable income. Companies including ConocoPhillips, Ovintiv Inc. and Civitas Resources, Inc. lobbied in favor of it.

The change, included in the legislation released Monday by Republicans on the Senate tax writing committee, is nearly identical to a bill by Republican Senator James Lankford. His home state of Oklahoma is among the top oil and gas producing states.  

Lankford’s bill, called the Promoting Domestic Energy Production Act, would cost the US government $1.1 billion over 10 years, according to the non-profit Tax Foundation, which cited an estimate from the non-partisan Joint Committee on Taxation. 

A representative for Lankford declined to comment. 

Earlier this year, Lankford told CNBC that his bill was necessary to prevent independent oil and gas producers from being squeezed by the Corporate Alternative Minimum Tax, enacted under former President Joe Biden to prevent corporations from using deductions and credits to pay little or no taxes.

“If we can’t get rid of that entirely we at least need to give some relief to those folks who are independent producers,” Lankford said. “We need to be able to get some relief to them so they’re not constantly worried about it.”

Environmental and watchdog groups including Friends of the Earth and Public Citizen panned the provision included in the Senate bill as a giveaway to fossil fuel companies. 

“This proposal would introduce a massive new loophole for oil and gas companies,” said Lukas Shankar-Ross, deputy director for climate for Friends of the Earth.

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Rich colleges would face lower tax hike under Senate tax bill

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Wealthy U.S. colleges scored a win on Monday with the release of Senate Republicans’ tax bill, which would institute a lower tax increase on endowments than what GOP House members have backed. 

Private universities with at least 500 students that have endowments of $2 million per pupil or more would pay an excise tax of 8% under the new bill released by the Senate Committee on Finance. The levy would be placed on net-investment income earned by the endowments. That’s much lower than the 21% rate that was included in the House proposal, which passed the chamber in May.

The endowment tax would raise revenue to offset President Donald Trump’s tax cuts and it would punish universities that are “woke,” in the words of the House tax-writing committee. The White House has frozen federal funding to a number of schools including the Ivy League’s Harvard, Princeton and Columbia. 

Under the new proposal, institutions with endowments of $750,000 to $1,999,999 per student would face a tax of just 4%. Under the House plan, colleges with endowments over $1.25 million per student but below $2 million would pay 14%. Colleges have warned that the House plan would be extremely costly for the schools and take away from financial aid provided to students. 

Religious schools would be exempt from the tax in both the House and Senate proposals. The current levy of 1.4% on the richest colleges was instituted as part of the 2017 Trump tax cuts.

Karin Johns, director of tax policy for the National Association of Independent Colleges and Universities, said the tax should be eliminated and not expanded.

“The tax remains purely punitive, unfairly impacts one sector of higher education, disincentivizes charitable giving, and siphons funds to the federal government used to support students and their families,” she said in an emailed statement. 

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