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Accountancy Slice
USA
17th April 2026
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THE HOT STORY

Las Vegas tests Trump message

President Donald Trump has used a Las Vegas appearance to promote his economic record and the “no tax on tips” law, but the visit highlighted voter frustration over high prices, job losses, and economic anxiety in Nevada. Supporters and critics alike described a city still feeling squeezed by expensive gas, weak tourism, and unsettled household finances. Nevada analyst Greg Ferraro said of the tax policy: “Is it delivering what some had hoped? Probably not,” while adding that it still acknowledges how dependent many workers are on tips.

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TAX

GOP proposes cuts to IRS funding

House Republicans have proposed a budget for fiscal 2027 that includes significant cuts to the IRS and the District of Columbia, while increasing funding for the General Services Administration. The Financial Services and General Government funding bill suggests a total of $25.3bn, which is a $1bn reduction from current levels. The proposed funding for the IRS is $10.2bn, exceeding the White House's request. Democrats criticized the bill, claiming it would harm federal workers and reduce tax enforcement capabilities, with Steny Hoyer saying: “This partisan bill will cost taxpayers - not only in benefits and services but also in lost revenue.” The GOP's plan also includes cuts to the Securities and Exchange Commission and other agencies, raising concerns about the impact on federal operations.

IRS funding boost: A game changer

Senators, led by Angus King (I-Maine) and supported by Ron Wyden (D-Ore.), are proposing legislation to allocate over $83bn to the IRS through Fiscal Year 2031. This funding aims to reverse previous cuts and enhance the agency's customer service, technology, and enforcement capabilities. Wyden said: “A rich tax cheat who shelters mountains of cash among a web of shell companies . . . is likelier to be struck by lightning than face an IRS audit.” The bill, introduced on the federal tax return deadline, signals potential Democratic policies if they regain power, despite its uncertain future under Republican control. The Budget Lab at Yale estimates the bill could generate about $1trn in net revenue over a decade.

Washington's millionaire tax: what to know

Washington state's new 9.9% millionaire tax is set to take effect in 2028, but it faces legal challenges from citizens and business groups claiming it is an illegal property tax. Despite these challenges, tax professionals must prepare for its implications. High-net-worth individuals may reconsider residency, as nonresidents could still owe the tax on allocated income. For instance, Jim, who terminates his residency but works briefly in Washington, would owe tax on a portion of his income. The law also affects pass-through entities, requiring a review of tax distribution terms. Christopher S. Brown, a tax partner at Holland & Knight, emphasizes the need for caution regarding residency changes and suggests reviewing tax distribution history to accommodate the new tax starting in 2028.

New York's new tax targets luxury homes

New York Governor Kathy Hochul's new pied-à-terre tax on expensive secondary residences is projected to generate at least $500m annually for the city. This tax targets around 13,000 units valued at $5m or more that are not owner-occupied. Hochul described the tax as a "safe middle ground" between Mayor Zohran Mamdani's aggressive tax-the-rich proposals and her more moderate approach. The revenue will help address a $5.4bn budget gap. While Mamdani supports the tax, he has pushed for more significant tax hikes on the wealthy, which Hochul has opposed, calling them “nonstarters.” Speaker Menin praised the tax as a “smart, sensible proposal” to strengthen the city's finances without burdening working New Yorkers. The tax will be included in the state's budget, which is overdue.

Tax practitioners face new challenges

Rochelle Hodes, a principal at Crowe, discusses the challenges tax practitioners face in 2026, particularly regarding the IRS's evolving priorities. She emphasizes the importance of understanding the IRS's direction, saying: "Effective tax practitioners leverage their technical expertise as well as their knowledge of the IRS." Hodes notes that recent changes within the IRS, including a new organizational structure and staff reductions, have left many tax professionals uncertain about compliance expectations. She also highlights the need for clear guidance to ensure voluntary compliance, as 99% of U.S. taxpayers want to meet their tax obligations. Hodes advocates for reforms in Section 6664 (c)(2) to allow reasonable cause defenses against penalties, stressing the importance of fair and understandable tax rules.

IRS launches live text chat service

The IRS has introduced a live text chat service for international taxpayers, providing a free alternative to traditional phone lines. The service, available Monday through Friday from 6 a.m. to 11 p.m. ET, allows tax practitioners to assist clients with amended returns and transcript requests. The IRS said: "the chat service can assist with statuses of amended returns; amended return process timeline; and help with requesting transcripts." For specific account inquiries, taxpayers must verify their identity using ID.me. Additionally, the International Taxpayer Service Call Center remains available during the same hours for further assistance.

SMALL BUSINESS

Tax shock hits small businesses hard

Philadelphia's new Business Income and Receipts Tax (BIRT) has caught many small business owners off guard, with some facing unexpected liabilities exceeding $5,700. The city now requires businesses with sales under $100,000 to pay this tax, which was previously exempt. Approximately 75,000 small business owners may be affected, leading to calls for reform. Councilmember Mike Driscoll has introduced a bill to exempt sole proprietorships from the tax, aiming to support local entrepreneurs. As city officials prepare for potential legal challenges, small business owners are left grappling with the financial implications of this sudden tax change.

Cash method accounting: a double-edged sword

Small business owners often prefer the cash method of accounting for its simplicity, as it allows income to be reported when received and expenses when paid. However, the recent Tax Cuts and Jobs Act restricts this method for C corporations with average annual receipts exceeding $25m. A recent case, Garibyan, TC Memo 2025-106, highlights the risks of improper accounting practices. The IRS audited a hospice care business run by two brothers, discovering over $200,000 in underreported income and disallowing more than $450,000 in deductions. The Tax Court sided with the IRS, citing "suspicious journal entries" and inaccuracies in accounts. The case serves as a reminder for business owners to seek professional guidance and adhere to recordkeeping rules.

INDUSTRY

Offshoring: The new accounting frontier

The U.S. accounting sector is increasingly turning to offshoring to address talent shortages and rising costs. According to the AICPA MAP Survey, 29% of firms are now utilizing offshoring, with nearly half of top-performing firms adopting this strategy. Offshoring allows firms to hire skilled workers from countries like India and the Philippines at significantly lower wages, freeing up U.S. staff for higher-value tasks. Anshul Agrawal, founder of June15 Consulting, emphasizes that direct offshoring can lead to better quality control and data security compared to outsourcing. He notes: "With a direct in-house team, you control the incentives." While challenges such as inconsistent work quality and turnover exist, the long-term benefits include cost savings and access to a broader talent pool. Firms are encouraged to consider both agency and direct models to find the best fit for their needs.

REGULATORY

U.S. Treasury asks private credit firms for data

The U.S. Treasury Department ​is asking ‌private credit firms to submit information ​about their ​business models and ties ⁠to the ​regulated financial system. Firms are being asked about their recent performance and relationships ​with ​banks, ⁠insurance, and reinsurance companies. A Treasury spokesperson said the department “routinely confers” with market participants and financial regulators about private credit.

Trump weighs appointing Michael Murray to lead antitrust at DOJ

The White House is ​considering appointing attorney Michael Murray to lead ‌antitrust enforcement at the U.S. Justice Department. Murray served in various roles at ​the DOJ during the previous Trump administration, ⁠including as principal deputy assistant attorney general ​for the department’s antitrust division. “(Murray) understands how ‌the ⁠DOJ works . . . I expect him to be very much in favor of a predictable business climate,” Andrew Finch, who was a top ​DOJ antitrust official ⁠in the first Trump administration, told Bloomberg. The role is currently held by acting Assistant ​Attorney General Omeed Assefi.

LEGAL

U.S. lawyers warn on AI ruling

Reuters reports that AI is presenting new issues for attorney confidentiality rules, particularly after a federal judge in New York ruled earlier this year that Bradley Heppner, the former chair of bankrupt financial services firm GWG Holdings, could not shield his AI chats from prosecutors pursuing securities fraud charges against him. More than a dozen major U.S. law ​firms have outlined advice for people and companies to decrease the chances of AI chats ending up in court. "We are telling our clients: You should proceed with caution," said Alexandria Gutiérrez Swette of New York-based law firm Kobre & Kim.

ECONOMY

Jobless claims drop amid uncertainty

U.S. applications for unemployment benefits decreased by 11,000 to 207,000 for the week ending April 11, according to the Labor Department. This figure is below analysts' expectations of 217,000 and reflects a stable job market despite ongoing global economic uncertainties due to the war in Iran. The four-week moving average of claims rose slightly to 209,750. Meanwhile, inflation remains a concern, with consumer prices rising 3.3% in March, the largest increase since May 2024.
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