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Accountancy Slice
USA
4th February 2026
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THE HOT STORY

House ends partial shutdown, kicking off immigration talks

The Republican-led House has narrowly approved legislation to end a partial U.S. government shutdown, passing the funding bill by a 217–214 vote before President Donald Trump signed it into law. The measure restores funding for much of the government through the end of the fiscal year, while temporarily funding the Department of Homeland Security until mid-February to allow further negotiations over immigration enforcement. The package allocates $11.2bn to the IRS for the current fiscal year, down from prior levels, with the largest share going to enforcement. It also rescinds $11.7bn in previously approved mandatory IRS funding from Democrats’ 2022 tax and climate law, further shrinking a funding pool that has already been substantially reduced through earlier cuts and agency spending. The vote exposed deep divisions within and between the parties, with most Democrats opposing the bill over concerns about immigration policy and some Republicans dissenting over unrelated election issues. The agreement now sets the stage for intense talks over immigration enforcement standards, with both sides warning that reaching a compromise will be difficult.

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TAX

IRS unveils clean fuel tax credit changes

The IRS and the Treasury Department have proposed new regulations for the clean fuel production credit under the One Big Beautiful Bill Act (OBBBA), aimed at supporting domestic clean transportation fuel producers. The 45Z credit offers businesses a tax credit for clean fuel produced after December 31st 2024, and sold by December 31st 2029. Key changes include limiting feedstocks to those from the U.S., Mexico, or Canada, and adding anti-abuse provisions. A Treasury official stated: "The tax credit will continue U.S. leadership in the transportation and aviation industries while lowering costs for consumers." The guidance will be open for public comment for 60 days, with a public hearing scheduled for further discussion.

NY Gov. Hochul's plan shields charity donations from state tax

A proposal from New York Gov. Kathy Hochul aims to protect the deductibility of charitable donations from state taxation, even if federal tax-exempt status is revoked. This initiative is designed to shield donors and institutions from political and regulatory challenges, potentially reshaping corporate philanthropy. The proposal allows donations to organizations losing federal tax-exempt status to still qualify for state deductions, thereby maintaining the flow of charitable capital in New York. Hochul's plan seeks to provide stability for businesses, particularly those with significant ties to higher education, by ensuring predictable tax treatment during uncertain federal scrutiny.

Oregon Democrats aim to boost revenue

Two prominent Oregon Democrats, Sen. Anthony Broadman and Rep. Nancy Nathanson, have introduced a plan to increase state revenue by eliminating three tax breaks from the federal One Big Beautiful Bill Act. This initiative is expected to generate $342m in the current biennium, addressing anticipated declines in state tax revenue. The proposed changes target tax breaks related to car loan interest, certain stock profits, and bonus depreciation for business equipment. Nathanson said: “The additional tax revenue . . . will be used to protect programs and services for Oregonians.” The plan also includes $25m in tax breaks for job-creating businesses and a $26m increase in the earned income tax credit for low-income workers. The bill aims to close tax loopholes while maintaining some federal benefits to keep Oregon attractive for businesses.

FIRMS

H&R Block narrows losses as revenue rises on strong tax demand

H&R Block has reported a slightly narrower second-quarter net loss, supported by double-digit revenue growth driven by higher assisted tax-filing volumes, subscription growth and stronger DIY software sales. The tax services group posted a net loss of $242.2m, broadly flat year on year, while revenue rose 11.1% to $198.9m. Management reaffirmed its full-year guidance, expecting 2026 revenue of $3.88bn-$3.9bn and adjusted earnings per share of $4.85-$5.00.

CrossCountry Consulting acquires M&A due diligence firm CDS

CrossCountry Consulting has acquired CDS, a San Francisco-based financial due diligence specialist, strengthening its transaction advisory capabilities for mergers and acquisitions. Founded in 2022, CDS works with private equity, investors, lenders and corporates, and brings a team of more than 35 professionals with buy-side and sell-side expertise. The acquisition establishes a new financial due diligence practice within CrossCountry, led by CDS partners Brian Drue and Anthony Azevedo, and expands the consultancy’s ability to support private equity sponsors and CFOs across the full deal and investment lifecycle.

PERSONAL FINANCE

Why Americans oppose taxes that often benefit them

Americans consistently express hostility toward taxes - even progressive taxes that many say they support in principle and that often align with their economic self-interest. Drawing on research by MIT political scientist Andrea Campbell, economic historian Jospeh Thorndike argues that this contradiction is not driven primarily by self-interest or partisanship. Instead, it stems from the complexity of the U.S. tax system, widespread use of tax breaks, low trust in government, and deep-seated racial resentment. Tax expenditures make the system opaque, obscuring who benefits and encouraging a generalized belief that all taxes are bad. This confusion leads many nonwealthy Americans to support tax cuts that primarily benefit the rich. Racial politics further shape attitudes, with many white Americans perceiving taxes as funding benefits for “undeserving” others, while Black and Hispanic Americans - often disadvantaged by the tax system - also distrust taxation due to historical and ongoing government coercion. The result is a bipartisan antitax culture that undermines progressive taxation, even as the nation faces worsening fiscal pressures.

LEGAL

Supreme Court 'understands enormous stakes in tariff case'

U.S. Trade Representative Jamieson Greer has told CNBC that the Supreme Court is taking its time to rule on a case challenging the legality of President Donald Trump's tariffs because of the "enormous" stakes involved. "We've built a new trade order on the back of these tariffs," Greer said. "So the stakes are enormous, and I think the court . . .  is being very careful and considerate as to how they deal with this issue of extreme national interest."

RISK

The tax liabilities lurking in HR solutions

As organizations increasingly depend on HR-led solutions and third-party vendors for managing benefits, payroll, and compensation, they may inadvertently incur hidden tax liabilities. These liabilities can lead to audits, penalties, and remediation costs. Julie M. Bradlow, Chair of DarrowEverett's Tax Practice Group, emphasizes the importance of early collaboration between HR and tax departments to avoid costly errors. The article outlines common pressure points, such as ACA reporting and payroll tax deposit failures, and stresses the need for proactive measures to manage risks. Companies are advised to conduct self-audits and involve tax advisors in HR policy design to enhance compliance and mitigate unforeseen tax penalties.

TOOLS

Anthropic unveils Claude legal plugin

Anthropic has unveiled a legal plugin that helps customise its large language model Claude for legal tasks such as document review. The AI company said the plugin did not provide legal advice. “AI-generated analysis should be reviewed by licensed attorneys before being relied upon for legal decisions,” Anthropic said.

CRYPTO

Clash over stablecoin rewards stalls legislation

A White House meeting which sought to break a protracted stalemate between major U.S. banks and cryptocurrency firms has ended without agreement. A key sticking point between the two industries is how the bill treats interest and other rewards paid on stablecoins. Banks want language in crypto market structure legislation to prohibit the practice. “The White House continues to engage in productive conversations to advance President Trump’s agenda of cementing American dominance in the cutting-edge technologies of the future," said White House spokesman Kush Desai.

INTERNATIONAL

Chile’s push for ‘greatness’ runs up against tax reality

The slogan “Make Chile Great Again” is central to the upcoming 2025 elections, with conservative José Antonio Kast leading the charge. His administration aims to implement pro-business tax policies, including lowering corporate tax rates and simplifying compliance. However, Kast lacks a congressional majority, making it challenging to pass his tax agenda. He may need to negotiate with the People's Party, led by Franco Parisi, who proposes reducing corporate tax from 27% to 20%-23%. Kast's approach also includes improving tax administration and addressing issues with current tax technology that misclassifies taxpayers.
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