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Accountancy Slice
USA
29th January 2026
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THE HOT STORY

Tax season turmoil ahead, warns Taxpayer Advocate

National Taxpayer Advocate Erin Collins has warned that the upcoming tax season will present greater challenges for taxpayers due to significant staffing reductions and complex tax law changes. In her annual report to Congress, Ms. Collins noted that the IRS's workforce decreased by 27% from 102,000 to 74,000 employees, impacting taxpayer services. "Entering 2026, the landscape is markedly different," Ms. Collins stated, highlighting the simultaneous challenges of reduced staff and the implementation of new tax laws from the One Big Beautiful Bill Act. While most taxpayers are expected to receive refunds on time, those needing extra assistance may face difficulties, especially as the IRS phases out paper checks. The report emphasizes the need for improved taxpayer service and efficient processing to avoid delays and confusion during the filing season.

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TAX

IRS clarifies new overtime deduction rules

On January 23rd, the Treasury Department and the IRS released a fact sheet addressing frequently asked questions about the new tax deduction for qualified overtime compensation under the One Big Beautiful Bill Act. For tax years 2025 to 2028, individuals can deduct up to $12,500 of qualified overtime compensation, or $25,000 for joint returns, provided their modified adjusted gross income does not exceed $150,000 ($300,000 for joint filers). The fact sheet includes eight FAQs that clarify reporting requirements and provide resources for employees. Notably, for tax year 2025, employers are not required to report qualified overtime compensation separately on Forms W-2 or 1099. As stated in the fact sheet: "It depends on the tax year" regarding the reporting of qualified overtime compensation. For subsequent years, separate reporting will be mandatory.

LA City Council stalls on housing tax vote

The Los Angeles City Council has postponed a vote on a proposed ballot measure to exempt newer apartment buildings from Measure ULA, a tax that has been criticized by developers for exacerbating the housing crisis. Councilmember Nithya Raman argued that the tax is hindering housing production, saying: “You can't address a housing crisis with a policy that worsens our housing shortage.” Supporters of Measure ULA, including Jerry Jones, executive director of the Greater LA Coalition on Homelessness, countered that the tax has provided essential funding for affordable housing and support for over 10,000 individuals at risk of homelessness. The council's decision means the proposal will not be on the June ballot, potentially delaying any changes until November at the earliest. Raman's proposal aimed to shield sellers of newer buildings from the tax, which currently applies to property sales over $5.3m.

Massachusetts Gov. proposes postponement of federal tax cuts

Massachusetts Gov. Maura Healey is working to mitigate the financial impact of federal tax changes under President Donald Trump's One Big Beautiful Bill Act on Massachusetts. She has proposed legislation to delay the implementation of the five most costly federal tax changes until next year, allowing the state to manage the estimated $442m impact on its budget. Healey described her approach as a “thoughtful, phased-in approach” that aims to protect essential services while providing tax relief. However, business groups argue that delaying these tax benefits could harm the state's competitiveness. Chris Carlozzi, state director of the Massachusetts chapter of the National Federation of Independent Businesses, criticized the plan, stating: “delaying the economic benefits of tax cuts would no doubt prove otherwise.” Healey is urging lawmakers to act swiftly to provide clarity and certainty around the tax code.

INDUSTRY

Proactive support: Ensuring core CPA teams are well-equipped for tax season success

As tax season approaches, firms must prepare to avoid employee burnout and ensure high-quality client service. Steve Saah, executive director of permanent at Robert Half, emphasizes the importance of early capacity analysis, saying: "Conducting this capacity analysis early can help you pinpoint where you may need to hire more full-time staff." Firms should proactively hire, utilize contract talent, and leverage AI to handle routine tasks. Implementing sustainable work practices is crucial to manage stress and maintain productivity. By setting clear expectations and encouraging breaks, firms can support their teams effectively. These strategies not only enhance service delivery during busy periods but also improve employee retention in the long run.

CPAs push for licensure reform in Maryland

The Maryland Association of CPAs (MACPA) recently gathered in Annapolis for their annual CPA Day, where nearly 100 CPAs advocated for significant legislative changes. Key issues included supporting a new pathway to licensure, opposing a sales tax on services, and maintaining the contributory negligence standard in Maryland courts. MACPA CEO Rebekah Olson emphasized: "When CPAs come to Annapolis for CPA Day, they're not showing up to advocate for themselves — they're showing up for their clients." The members also supported additional funding for the Maryland Comptroller's Office, which has been a consistent request over the past three General Assembly sessions.

FIRMS

Deloitte and Thomson Reuters launch global e-invoicing alliance

Deloitte and Thomson Reuters have expanded their partnership to offer a global e-invoicing and e-reporting managed service. Leveraging Thomson Reuters' ONESOURCE Pagero platform, Deloitte will help businesses navigate complex regulatory environments, improve data accuracy, and reduce compliance risks. The alliance offers end-to-end support across more than 80 jurisdictions, aiming to streamline operations, cut costs, and enhance data-driven insights. This move integrates e-invoicing with traditional indirect tax compliance, providing a scalable and future-ready solution for multinational corporations.

PwC U.S. and Google Cloud team up

PwC U.S. has announced a three-year collaboration with Google Cloud, investing $400m to enhance security operations. The partnership aims to modernize cyber resilience through AI-driven tools.

ECONOMY

Fed keeps interest rates unchanged for first time since July

The Federal Reserve's Open Market Committee has voted 10-2 to keep the benchmark federal-funds rate steady in a range between 3.5% and 3.75%, ending a run of three consecutive quarter-point reductions.“Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization. Inflation remains somewhat elevated,” the Fed said in a post-meeting statement that offered little to suggest what it's next move will be. “In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” it added. Futures markets are pricing in at most two rate reductions in 2026, during which Chair Jerome Powell will step down, and none in 2027. Predictions markets are pointing to BlackRock bond chief Rick Rieder as the likely candidate to succeed Powell.

CORPORATE

Amazon and Chanel join Saks creditors committee

Amazon – alongside luxury brands Chanel, LVMH, and Kering – has been appointed to the creditors committee in Saks Global’s $3.4bn bankruptcy case, giving them a stronger voice in restructuring talks as Saks seeks approval to make $337.4m in catch-up payments to key vendors. Amazon, which has a $475m equity stake and e-commerce partnership with Saks, has already opposed parts of the retailer’s bankruptcy financing.

PERSONAL FINANCE

Avoiding costly RMD mistakes this year

Many financial advisors view the required minimum distribution (RMD) as a simple annual task, but Vanguard research reveals that about one in three clients aged RMD-age either miss their distribution or withdraw insufficient amounts. In 2024, 6.7% of clients failed to take their RMD, while 24% withdrew less than required, leading to average penalties of up to $2,900. Andy Reed, head of behavioral economics research at Vanguard, noted: "Most investors seem to make RMDs a routine, but rather than 'set and forget,' many simply 'forget and forget.'" To mitigate penalties, advisors recommend prompt action and thorough documentation. Joon Um, a tax advisor, emphasized that missing an RMD is fixable if addressed quickly. Consolidating accounts can also help prevent missed distributions, as Aaron Goodman from Vanguard points out: "Combining IRAs and putting RMDs on autopilot takes forgetting out of the equation."

CRYPTO

White House to discuss a path forward for landmark crypto legislation

A summit to be hosted by the White House's crypto council on Monday will focus on how landmark crypto legislation which has stalled due to ​a clash between the  banking and cryptocurrency industries treats interest and other rewards crypto firms can distribute on customer holdings of dollar-pegged tokens known as stablecoins. Cody Carbone, chief executive of The Digital Chamber, a crypto trade group, thanked ⁠the White House for "pulling all sides to the negotiating table."

INTERNATIONAL

Capgemini under fire in France for ICE contract

France's finance minister, Roland Lescure, has called on Capgemini to clarify its contract with Immigration and Customs Enforcement (ICE) amid growing concerns over the agency's actions. Capgemini Government Solutions has signed a contract for "skip tracing services" to assist ICE in locating deportees. Lescure said: "I urge Capgemini to shed light . . . on its activities." The scrutiny follows incidents involving ICE officers that have raised international concerns, including the agency's involvement in the U.S. security team for the upcoming Winter Olympics in Italy. Capgemini chief executive Aiman Ezzat noted that the US branch of the firm acted independently on the contract.
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