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Trump calls SALT deduction-focused Republicans to Florida before tax fight

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A cohort of about 20 Republican House members from New York, New Jersey and California was invited to meet with President-elect Donald Trump at his Mar-a-Lago estate Saturday ahead of a looming fight over an extension of his 2017 tax cuts.

Much of the group is likely to attend and plans to discuss increasing the $10,000 cap on state and local tax deductions, which has disproportionately hurt voters in the three high-tax states, according to Representative Nick LaLota, who represents eastern Long Island in New York. 

Republicans in Congress are in the beginning stages of negotiating a package that will extend Trump’s 2017 tax cuts — including the future of the cap on the SALT deduction, which will otherwise expire — and address the other legislative priorities of immigration and energy production. The meeting is a positive sign for lawmakers seeking to expand the deduction, a politically divisive write-off that reduced tax bills for some residents of high-tax states.

In an interview with Bloomberg, LaLota said the group of lawmakers includes four other representatives who are banding with him to push for a “reasonable” adjustment to the cap on so-called SALT deductions. The cap was imposed as part of the 2017 bill.

“There are five very salty Republicans — I would expect that somebody in his position would appreciate that dynamic and would want to provide an accommodation to get the bill passed,” he said. “The five of us have the opportunity to effectuate an even more beautiful, big bill.”

The group, which also includes New Yorkers Andrew Garbarino and Mike Lawler, New Jersey Representative Tom Kean and California’s Young Kim, will push to expand the deduction — currently capped at $10,000 regardless of marital status — that would deliver big savings to their constituents as part of a larger tax package, said LaLota. 

While he declined to comment on what the group would consider to be an acceptable cap, last month he said that a potential plan by Trump’s economic advisors to double the tax write-off limit to $20,000 “is not reasonable.” He also told Bloomberg the removal of the so-called marriage penalty — the fact that the limit is the same for both single and married taxpayers — on its own would be insufficient for the “salty” five.

Spokespeople for Lawler, Garbarino and Kim confirmed their plans to attend the meeting with Trump, while Kean’s spokesperson didn’t respond to a request for comment. Spokespeople for Trump did not immediately respond to a request to comment.

“I’ve been very clear, and I think my colleagues will understand it, that SALT has to be included” in the bill, Lawler said in a separate interview Tuesday. “There’s already an understanding that that’s the case, so I’m not concerned.”

Because of its slim majority in the House, the GOP can only afford to lose the support of a couple congressional Republicans in order to advance the bill through a process known as budget reconciliation. The process, which would allow the GOP to pass legislation only with Republican votes, depends on near-universal agreement within its narrow majorities in the House and Senate. That puts great pressure on Trump and Republican leaders to negotiate a package that appeases both their far-right flank as well as members from the New York City-area and Southern California, for whom expanding the SALT deduction is a political priority.

“The math dictates that any small group of members can block anything that is going to be Republican,” he said. “And that math isn’t just particular to the SALT discussion, but just about anything and everything we do here in this town. That said, that President Trump is bullish on SALT and wants to provide a fix and is inviting us to Mar-a-Lago to be a part of that fix gives me great optimism.”

While it was Trump who curbed the tax break as part of his signature 2017 legislation, on the campaign trail he vowed to expand the cap. LaLota credited the change of heart to efforts by lawmakers to develop a relationship with Trump.

In addition to taxes, LaLota said that he and Lawler also plan on discussing with Trump New York City’s congestion pricing toll, which went into effect this week and charges drivers $9 for entering Manhattan’s central business district. Trump had said he opposes the fee.

LaLota said the toll especially hurts suburbanites from his and Lawler’s districts, who “should not be a piggy bank to the bloated MTA.”

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IAASB tweaks standards on working with outside experts

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The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.

The proposed narrow-scope amendments involve minor changes to several IAASB standards:

  • ISA 620, Using the Work of an Auditor’s Expert;
  • ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
  • ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
  • ISRS 4400 (Revised), Agreed-upon Procedures Engagements.

The IAASB is asking for comments via a digital response template that can be found on the IAASB website by July 24, 2025.

In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.  

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Tariffs will hit low-income Americans harder than richest, report says

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President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an analysis from the Institute on Taxation and Economic Policy.

The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings. 

Trump has imposed the steepest U.S. duties in more than a century, including a 145% tariff on many products from China, a 25% rate on most imports from Canada and Mexico, duties on some sectors such as steel and aluminum and a baseline 10% tariff on the rest of the country’s trading partners. He suspended higher, customized tariffs on most countries for 90 days.

Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.

Food prices could rise by 2.6% in the short run due to tariffs, according to an estimate from the Yale Budget Lab. Among all goods impacted, consumers are expected to face the steepest price hikes for clothing at 64%, the report showed. 

The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.

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At Schellman, AI reshapes a firm’s staffing needs

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Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist Schellman do more things with fewer people, allowing the firm to scale back hiring and reduce headcount in certain areas through natural attrition. 

Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time. 

“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said. 

One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load. 

“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai. 

Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies. 

“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.

However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area. 

“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai. 

As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales. 

“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai. 

While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves. 

“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”

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