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Accountancy Slice
USA
9th October 2026
 

THE HOT STORY

EY challenges Deloitte in outsourcing as revenue growth accelerates

EY has reported a 4.7% increase in global revenue to $57bn for the year ending June 30th, accelerating from 4% growth the previous year and outperforming rival Deloitte’s 3.8% growth rate. The Big Four firm has strengthened its position in outsourcing, with managed services revenue rising 13% to approximately $7bn, supported by demand for tax compliance, IT, and cybersecurity services. Its strategy and deals division, EY Parthenon, recorded the strongest growth, with revenue increasing 7.4% to $6.8bn, benefiting from merger and acquisition activity. Consulting revenue rose 4.4% to $17.4bn, while tax increased 6% to $13.8bn and audit grew 3% to $18.9bn. EY also reported improved profitability, supported by operational restructuring and technology investments, and expects continued workforce growth despite increasing AI adoption.

TAX

IRS failed to prevent unauthorized employee access to high-profile taxpayer records

A TIGTA report has found significant weaknesses in the IRS's safeguards against unauthorized employee access to confidential taxpayer information, including records belonging to government officials, business leaders, and entertainers. An examination of IRS audit logs from 2022 through 2025 identified 86 suspicious instances of access involving 30 taxpayers and 52 employees. Investigators also found that 22 employees were not terminated despite accessing taxpayer records without authorization. The report revealed failures in taxpayer notification procedures, with 175 individuals not receiving required notifications because employees failed to follow established processes. Another 101 taxpayers were not notified because the responsible employees resigned or retired before disciplinary proceedings began. TIGTA issued eight recommendations to strengthen preventive controls, employee accountability, and notification procedures. The IRS agreed or partially agreed with seven recommendations and pledged corrective action to improve taxpayer privacy protections.

Voluntary disclosure reforms aim to reduce penalties

The IRS is preparing major reforms to its Voluntary Disclosure Program (VDP), aimed at encouraging taxpayers to disclose past tax violations by reducing penalties, simplifying procedures, and improving processing times. The proposed changes include removing the requirement to explicitly admit willful misconduct, introducing a single-step application process, and targeting case resolution within 120 days. The revised penalty framework would replace the 75% civil fraud penalty with a 20% accuracy-related penalty for each year of the six-year disclosure period. International information return penalties would be capped at $10,000 annually. However, former IRS official Eric Hylton warns that strict eligibility requirements and a proposed three-month deadline to submit returns and pay outstanding liabilities could discourage participation, particularly among taxpayers with limited financial resources. Hylton argues that the reforms' success will depend on whether taxpayers believe voluntary disclosure offers meaningful protection from criminal prosecution. The changes are expected to be formally announced later in 2026.

IRS targets January 2027 deadline to finalize foreign tax regulations

The IRS is aiming to finalize a series of proposed regulations addressing international tax changes introduced under the $3.4tn Republican tax law by January 4th 2027. Peter Blessing, the IRS's associate chief counsel for international tax matters, emphasized the urgency of completing the regulations during a Practising Law Institute event in New York. The January 4th deadline marks 18 months since the legislation's enactment. Regulations finalized within that period can apply retroactively to the law's original passage date, making timely implementation particularly important. Blessing described the regulations as clear priorities for the agency, signaling its intention to provide guidance on the international tax provisions.

FIRMS

Citrin Cooperman acquires Rosetree Solutions

Citrin Cooperman Advisors has acquired artificial intelligence (AI) consultancy Rosetree Solutions to strengthen its AI capabilities and help small and middle-market businesses integrate the technology into their operations. The acquisition combines Citrin Cooperman's expertise in tax, accounting, and advisory services with Rosetree's experience designing and implementing AI systems. Financial terms of the transaction have not been disclosed. The companies plan to help clients incorporate AI into everyday workflows, business processes, and operational systems, moving beyond experimental applications to deliver practical improvements. The deal follows Citrin Cooperman's recent AI investments and partnerships, including an August agreement with AI engineering venture Ode and collaborations involving Priority Software, Caseware, Intuit, and Tellen.

ECONOMY

August wholesale inventory growth revised down to 0.5%

U.S. wholesale inventories increased less than initially estimated in August, reflecting strong domestic demand and accelerating sales, according to revised Commerce Department data. Inventories rose 0.5%, down from an initial estimate of 0.7%, following a 1.4% increase in July. Wholesale inventories were 6.4% higher year-over-year, with durable goods inventories rising 0.8%, while nondurable goods inventories remained unchanged. Wholesale sales increased 1.8% in August, compared with 1.0% in July, reducing the inventory-to-sales ratio to 1.18 months from 1.19 months. Businesses are rebuilding inventories following five consecutive quarters of declines, supported by consumer spending and investment in artificial intelligence. Economists expect inventory accumulation to contribute positively to third-quarter GDP growth, although increased imports could subtract as much as 2.5 percentage points. Third-quarter economic growth is forecast at approximately 3.0% annualized, compared with 2.2% in the second quarter. 

U.S. unemployment claims fall to 197,000 as layoffs remain historically low

New applications for U.S. unemployment benefits declined slightly last week, signaling continued job security despite sluggish hiring and signs of a cooling labor market. According to the Labor Department, initial jobless claims fell by 2,000 to 197,000 in the seven days to October 3rd, down from a revised 199,000 the previous week. The four-week average decreased by 2,500 to 198,000 while continuing claims, reported with a one-week lag, rose to 1.72m.

LEGAL

US Tax Court upholds 100% payroll tax penalty despite business financial hardship

The US Tax Court has upheld a trust fund recovery penalty (TFRP) against a construction business owner who prioritized employee wages, union benefits, and supplier payments over outstanding payroll taxes. In Amodio v. Commissioner, the court ruled that financial difficulties did not excuse the owner's failure to remit payroll taxes for 2015 and 2016, even though the original decision to withhold payments was made without his knowledge. The company had faced severe cash flow pressures caused by delayed customer payments and union obligations. After discovering the unpaid taxes, the owner directed available funds toward keeping the business operational. However, the court determined that knowingly paying other creditors instead of the IRS constituted a willful failure under the TFRP rules, which can impose personal liability for 100% of unpaid trust fund taxes. The court also ruled that the penalty amount was limited by the company's 2020 Offer-in-Compromise agreement with the IRS, providing partial relief to the taxpayer.

PERSONAL FINANCE

Student loan forgiveness could trigger tax bills of up to $12,000

Millions of federal student loan borrowers could face substantial tax bills when their remaining debts are forgiven under income-driven repayment plans, according to a new report from advocacy group Protect Borrowers. The analysis estimates that 2m-3m borrowers will receive loan forgiveness over the next decade, potentially triggering one-time federal tax liabilities of $6,000-$12,000 for a typical borrower. Borrowers who have made payments for 20 years or longer could see an average of nearly $50,000 in outstanding student debt canceled. However, because the IRS generally treats forgiven debt as taxable income, borrowers may face significant tax obligations despite receiving financial relief. The report identifies low-income borrowers and residents of Southern states as particularly vulnerable to higher tax burdens. Jennifer Zhang, the report's author, warned that unexpected tax liabilities could create severe financial hardship for borrowers who have spent decades repaying their student loans.

REGULATORY

Trump and Vance back Credit Card Competition Act

President Donald Trump and Vice President JD Vance have endorsed the Credit Card Competition Act, a bipartisan proposal designed to reduce transaction fees and challenge Visa and Mastercard’s dominance of the U.S. payments market. The legislation would require major banks to support at least two payment networks on each credit card, allowing merchants to choose lower-cost processing options. Retailers argue the measure could reduce costs and consumer prices, with the White House claiming hidden swipe fees cost American households $1,200 annually. However, banks warn that lower interchange revenues could threaten popular credit card rewards programs, including cash back and travel points. Merchant groups are exploring ways to attach the bill to existing legislation following the midterm elections; although banking industry representatives remain skeptical that the legislation will pass, Trump’s backing has renewed concerns about potential disruption to the multibillion-dollar credit card payments industry.

Amex fined $350m for failing to flag suspected money laundering

American Express has been fined $350m by U.S. regulators after significant shortcomings were identified in its anti-money laundering controls, which allegedly resulted in approximately $13bn of suspicious activity going inadequately monitored or reported over the past decade. The Office of the Comptroller of the Currency and Federal Reserve cited insufficient resources, inexperienced staff, inadequate training and weaknesses in internal controls, particularly within the company’s credit card operations. American Express neither admitted nor denied the findings but has committed to strengthening its compliance procedures. Chief executive Stephen Squeri said the company has already made progress in addressing the issues and expects neither the penalty nor additional compliance costs to affect its financial guidance for 2026 or 2027.

Wells Fargo faces potential probe over Black homeownership commitments

Wells Fargo faces a potential investigation from the Trump administration's housing authority over programs and commitments ​the lender made over nearly a decade to increase homeownership among Black Americans. The probe will look at whether the ​bank violated fair-lending laws by favoring Black or other ⁠minority homeowners, according to a letter from the Department of Housing and Urban Development sent to Wells Fargo CEO ​Charlie Scharf. The Wall Street Journal notes that the potential probe is another instance of corporate America being targeted by the White House for programs that were encouraged during prior administrations, either by the government or socially conscious investors.

RISK

Former IRS Commissioner partners with AICPA to establish AI tax risk council

Former IRS Commissioner Danny Werfel and AICPA have established the Council on AI Risk in Tax (CART) to promote responsible artificial intelligence (AI) adoption across tax administration and professional practice. The council brings together representatives from accounting, law, technology, government, and academia to develop practical guidance, share emerging risks, and improve industry collaboration. A central priority is refining Mr. Werfel's AI tax risk framework, which provides organizations with a voluntary approach to evaluating and mitigating AI-related risks. An updated version is expected within six months, followed by annual revisions. CART will meet quarterly and encourage firms to share lessons from AI implementation rather than keeping potential problems confidential for competitive reasons. Mr. Werfel emphasized the importance of introducing AI incrementally, maintaining human oversight, and addressing risks such as inaccurate outputs, expanding system responsibilities, and surveillance concerns. The initiative aims to establish widely adopted best practices without imposing formal regulatory standards.

WORKFORCE

Microsoft, Adobe blocked from green-card program amid visa fraud crackdown

The U.S. Labor Department is to suspend Microsoft and Adobe from its Permanent Labor Certification, which allows companies to hire foreign workers to work permanently in the U.S., amid allegations of fraud. Labor Secretary Keith Sonderling said IT contractors Cognizant, Infosys, Capgemini, Tata, Wipro and HCL were also suspended from the program. The move came as the White House increases pressure on companies to hire more Americans. “There has been no company in the United States, unfortunately, that has abused this system more than Microsoft,” U.S. Vice President JD Vance said at a news conference on Thursday. “Now, our message to Microsoft and to any other foreign or domestic corporation is quite simple,” he added. “We obviously want you to thrive in the United States of America . . . We want people to invest in the United States of America, particularly the American technology sector. We are the biggest boosters of your industry. We want you to continue to grow and to employ a lot of people, but we want you to employ American workers.” Microsoft responded to Vance’s claims in a blog post, saying that “80 percent of the visas were to extend or change the status of existing Microsoft employees.”

INTERNATIONAL

U.S. investigates EU carbon border tax over potential trade barriers

The United States has launched an investigation into whether the European Union's Carbon Border Adjustment Mechanism (CBAM) creates unfair trade barriers for American businesses, raising the prospect of renewed transatlantic trade tensions. Introduced in January 2026, CBAM applies to imports of aluminum, cement, fertilizers, hydrogen, iron, and steel. The mechanism aims to prevent companies from relocating carbon-intensive production to countries with weaker environmental regulations. Washington is examining the tax's impact on U.S. exporters, including compliance costs, market access, and proposed expansions to products such as washing machines and automotive parts. U.S. businesses have until November 9 to submit comments. The investigation comes amid internal EU disagreements over expanding CBAM, calculating emissions, and granting exemptions. European lawmakers are seeking stricter enforcement, while some governments favor greater flexibility. Separately, the World Trade Organization has agreed to examine Russia's challenge to CBAM, which Moscow argues creates discriminatory trade barriers.

U.K. and Irish accounting bodies report 2.5% membership growth

Accounting organizations in the United Kingdom and Ireland reported continued membership growth in 2025, although longer-term declines in student enrollment have raised concerns about the profession's future talent pipeline. According to the Financial Reporting Council (FRC), total membership increased 2.5% to 418,986 in 2025, representing a 7.6% rise since 2021. Chartered Accountants Ireland recorded the strongest growth, with membership rising 16.2% to 8,482 following its merger with Certified Public Accountants Ireland. The Association of Chartered Certified Accountants (ACCA) reported 3% growth. Meanwhile, accounting student numbers increased 0.9% to 156,367 in 2025 but remained 3.1% below 2021 levels. Professional bodies are responding to changing career expectations and technological developments. ACCA plans to introduce a redesigned qualification in 2027 to attract new talent and accommodate more flexible career paths, while industry representatives have highlighted continued consolidation among registered audit firms.

 
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