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Accountancy Slice
USA
5th August 2026
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THE HOT STORY

IRS improper payments on refundable tax credits rise to $28.1bn

The IRS's estimated improper payments for four refundable tax credits increased to $28.1bn in fiscal year 2025, with the overall improper payment rate rising from 21.9% to 26.5%, according to a TIGTA report. The watchdog found the IRS failed to meet requirements under the Payment Integrity Information Act of 2019, which aims to reduce improper payment rates below 10%, citing limited ability to verify taxpayer eligibility before issuing refunds and a sharp decline in prerefund examinations. TIGTA recommended the IRS work with the Treasury Department and Congress to pursue legislative changes, expand error-correction authority, improve data-sharing to verify eligibility, and strengthen taxpayer outreach. The IRS agreed with the recommendations, stating that complex eligibility rules, limited access to verification data, and staffing reductions have contributed to improper payments. The report also noted that prerefund examinations have fallen about 70% over the past three years, and estimated the IRS would need approximately 12,700 additional examiners and $3.4bn annually to conduct enough reviews to meet the statutory payment integrity target.

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TAX

President Trump heads to Nevada to promote tax cuts

U.S. President Donald Trump will visit Las Vegas today to promote his administration's tax cut policies while contrasting with Democrats ahead of the November midterm elections. This visit is part of a broader strategy by the White House to address voter concerns regarding the economy and the ongoing Iran war. Trump will appear alongside Republican congressional candidate Marty O'Donnell in a district represented by Democratic Representative Susie Lee. White House spokeswoman Liz Huston said: "By passing no tax on tips, no tax on Social Security, and no tax on overtime, President Trump and Republicans guaranteed Americans receive bigger paychecks." Democrats have criticized the tax cuts as benefiting the wealthy at the expense of social safety programs. Rising prices and the Iran war are key issues for Democrats in the upcoming elections, with a recent poll indicating only one in three Americans support the military campaign.

IRS cuts multilingual support drastically

The IRS has significantly reduced its multilingual services from 20 languages to just seven - Spanish, Simplified Chinese, Traditional Chinese, Russian, Korean, Vietnamese, and Haitian Creole - following an executive order from President Trump. A new TIGTA report highlights that while the IRS will continue to provide some non-English compliance materials, it will eliminate non-English social media channels and narrow its language services. "Overall, many existing services will not change since the IRS offered limited products and services outside of the seven languages before Executive Order 14224," the report states. The IRS has retained translation services for mission-critical issues outside the top seven languages.

Missouri voters reject income tax phaseout and ballot initiative changes

On Tuesday, Missouri voters overwhelmingly rejected two Republican-backed constitutional amendments, defeating a proposal to phase out the state income tax by an 83% to 16% margin and a measure to change initiative petition approval rules by 80% to 20%. Opponents said the results reaffirmed support for the state's citizen-led ballot initiative process and existing tax structure, while Gov. Mike Kehoe pledged to continue pursuing income tax reform despite the setback. The campaigns against both amendments were led by the Missouri Association of Realtors and a broad coalition of business, education, and advocacy groups, which argued the measures would shift more of the tax burden to consumers and weaken voters' ability to amend the state constitution.

INDUSTRY

Buyers shift focus to profitability and scalability in accounting firm valuations

The accounting firm M&A market has moved beyond traditional revenue-based valuation models, with buyers now placing greater emphasis on sustainable, transferable earnings, recurring revenue, and a firm's ability to grow independently of its owner. Firms that combine compliance services with higher-value advisory offerings, such as tax planning, outsourced CFO services, and business consulting, are generally viewed as more attractive because they generate stronger client relationships, more predictable cash flow, and greater opportunities for long-term growth. David A. Perez, tax strategist and chief executive of Tax Maverick AI, argues that owners seeking premium valuations should reduce dependence on the founder by developing management teams, transferring client relationships, standardizing pricing, documenting operating processes, and tracking key performance metrics well before a sale. The most valuable firms are those that can demonstrate durable client retention, scalable operations, and sustainable profitability, giving owners greater flexibility to pursue either an external sale or an internal succession plan.

FIRMS

BRG signs up former PCAOB Chief Auditor Barbara Vanich

BRG has appointed former PCAOB Chief Auditor Barbara Vanich as a managing director in its Financial Institution Advisory practice, where she will advise clients on accounting, auditing, internal controls, corporate governance, and financial reporting. Based in Washington, D.C., Vanich brings more than 30 years of experience across public accounting, consulting, industry, and financial regulation, including more than 17 years at the PCAOB, where she led the organization's auditing standard-setting activities.

ECONOMY

Trade deficit narrows in June as trade activity cools following May surge

The U.S. trade deficit narrowed 5.6% to $73.3bn in June as imports fell 1.8% to $388bn and exports declined 0.9% to $314.7bn, reflecting a slowdown after unusually strong trade activity in May. Imports from Mexico, Vietnam, and South Korea reached record levels, while services imports and exports both hit all-time highs. The data underscores continued volatility in global trade as businesses adjust to tariffs, shifting supply chains, and geopolitical disruptions, with the Trump administration continuing to pursue tariffs aimed at reducing the U.S. trade deficit despite ongoing legal and economic challenges.

Factory orders unexpectedly decline in June despite strong AI-driven investment

The Commerce Department reported on Tuesday that U.S. factory orders unexpectedly fell 0.3% in June, following a revised 1.1% decline in May, missing expectations for a modest rebound. The weakness was driven by sharp declines in orders for defense aircraft and mining, oil, and gas field machinery, although overall manufacturing activity continued to benefit from robust business investment in artificial intelligence infrastructure and front-loaded purchases aimed at mitigating supply chain disruptions and higher costs linked to the Middle East conflict. Underlying business investment remained resilient, with orders for non-defense capital goods excluding aircraft - a key measure of equipment spending plans - rising 1.2%, while shipments of those goods increased 2.0%. Demand for computers and electronic products climbed 3.2% from the previous month and 13.9% year over year, underscoring continued strength in AI-related spending, while orders also increased for electrical equipment, motor vehicles, commercial aircraft, and primary metals.

Job openings ease in June as hiring strengthens and layoffs stay low

U.S. job openings fell by 178,000 to 7.36m in June, slightly below economists’ expectations, reflecting softer labor demand led by a 147,000 decline in healthcare and social assistance vacancies, according to the Labor Department’s JOLTS report. The job openings rate edged down to 4.4% from 4.5%, although economists continue to characterize the labor market as stable rather than weakening. Despite fewer open positions, hiring increased by 96,000 to 5.35m, lifting the hires rate to 3.4%, while layoffs and discharges remained largely unchanged at 1.77m, with the layoffs rate holding at 1.1%. The combination of modest hiring gains and low layoffs reinforces the view that the labor market remains in a "slow-hire, slow-fire" environment, allowing the Federal Reserve to keep its focus on inflation ahead of Friday’s July employment report, where economists expect payroll growth of 80,000 and the unemployment rate to remain at 4.2%.

LEGAL

Trump opposes legal fee requests in dismissed IRS lawsuit

President Donald Trump has asked a federal court in Florida to deny requests for legal fees and costs from former federal judges, former government officials, and public interest organizations that opposed his now-dismissed $10bn lawsuit against the IRS over the leak of his tax returns. The requests include approximately $39,000 sought by advocacy groups and former officials, along with about $4,600 in costs and nominal fees sought by 35 former federal judges. The dispute follows a sanctions order issued by U.S. District Judge Kathleen Williams, who ruled that Mr. Trump had improperly used the lawsuit to seek personal benefits and allowed the amicus groups to pursue fees.Mr. Trump has appealed that ruling, arguing that nonparties to litigation are not entitled to recover legal fees or costs. The former judges contend the court acted within its authority to award fees as a sanction and said their request is intended to protect the integrity of the judicial process.

Texas law firm agrees $15m settlement over judicial scandal

Texas law firm Jackson Walker has agreed to pay $15m to settle a civil case from the Justice Department over ex-bankruptcy practice partner Elizabeth Freeman's undisclosed romantic relationship with the nation’s former top bankruptcy judge, David R. Jones, who oversaw the firm's cases. Houston-based Jackson Walker said it would also pay for independent review of its bankruptcy disclosure requirements and ethical obligations, and change some of its ​conflict screening procedures. In its settlement with the Office of the U.S. Trustee, the civil watchdog that oversees the nation’s bankruptcy courts, Jackson Walker said it "acknowledges, while not admitting fault, that it could have approached this ​matter differently."

REGULATORY

CFPB supervisor warned staff against aggressive oversight of financial firms

A senior supervisor at the U.S. Consumer Financial Protection Bureau (CFPB) warned staff they could face "the most unpleasant" consequences if they made inflammatory or overly aggressive remarks during examinations of financial firms, according to an internal email obtained by Reuters. The message, sent by Chief Examiner Fatima Batie in May as the agency resumed inspections after a lengthy pause, has prompted criticism from former officials, who argue it could discourage rigorous oversight and embolden the companies the CFPB regulates. The email reflects the Trump administration's broader effort to scale back financial regulation. Former acting CFPB Director Russell Vought has said the agency has recalibrated its supervisory approach to minimize burdens on businesses, while agency leadership has reduced the number of examinations by around 50% and shifted focus away from areas such as student loans and medical debt. Similar changes have been introduced by other federal banking regulators, which have encouraged financial institutions to report concerns about examiner conduct. 

Regulators urged to probe Wall Street banks over Epstein accounts

U.S. Senator Ron Wyden (D-OR) has called for federal regulators to investigate major banks regarding their management of the late sex offender Jeffrey Epstein's accounts, citing potential violations of anti-money laundering laws. In a report released on Tuesday, Mr. Wyden alleged that Bank of America, Deutsche Bank, and JPMorgan Chase failed to report suspicious transactions linked to Epstein in a timely manner. The report said that Bank of America did not properly screen $170m in payments to Epstein, while Deutsche Bank delayed reporting over $250m in suspicious wire transfers. JPMorgan was accused of delaying the reporting of over $1bn in transactions. A spokesperson for JPMorgan said: "We acted appropriately on what we knew, when we knew it, as the law requires." Mr. Wyden's investigation included a review of suspicious activity reports and testimonies from various financial institutions. Epstein, who died in 2019, had connections with multiple banks during his lifetime.

PERSONAL FINANCE

Donor-advised funds see surge in gifts

Donor-advised funds (DAFs) are experiencing a significant increase in donations, particularly in non-cash assets, driven by a surge in IPOs and private tech company valuations. According to Julie Sunwoo, president of DAFgiving360, “This year we had more inquiries about private-business interests and pre-IPO shares than ever before in any other year.” DAFs allow donors to make charitable gifts while receiving immediate tax deductions, enabling them to decide later on the specific charities to support. This is especially appealing to younger tech workers who can donate now and choose recipients later. With large DAFs having the expertise to value and liquidate private shares, the potential for increased donations is substantial, particularly with upcoming IPOs like SpaceX, Anthropic, and OpenAI.

STRATEGY

Accounting firms urged to rethink global audit staffing beyond cost savings

Public accounting firms should view global staffing as a long-term strategy for building audit capacity rather than simply reducing costs, according to industry expert Ajay Kataria. With accounting graduate numbers remaining below historical levels despite recent enrollment growth, firms are increasingly relying on global professionals to support audit work, but success depends on strong technical qualifications, standardized workflows, effective supervision, and consistent documentation rather than adding headcount alone. Kataria argues that firms should integrate global teams into a single engagement model by using shared workpaper systems, providing direct access to audit platforms, offering ongoing training, and encouraging direct communication between U.S. and global staff. He also stresses the importance of robust governance covering data security, independence, supervision, and AI usage, noting that firms should measure success through audit quality, review efficiency, and reduced bottlenecks, rather than simply the volume of work transferred offshore.

INTERNATIONAL

Australia urged to boost whistleblower protection

CPA Australia, the country's professional body for accountants, has called for a dedicated Whistleblower Protection Office, warning that the current whistleblower framework is unclear and may discourage individuals from reporting misconduct.

AND FINALLY...

'Helicopter parents' becoming a bigger presence in young adults' careers

Recruiters and hiring managers say parental involvement in the careers of young adults is becoming increasingly common, with some parents contacting employers, applying for jobs on behalf of their children, attending interviews, or even participating in workplace discussions. Human resources professionals say the trend has become far more widespread in recent years, particularly among Gen Z workers, raising concerns that excessive parental involvement signals a lack of independence and self-reliance. While some parents argue they are simply helping their children navigate a difficult job market or providing networking support, employers say direct intervention rarely improves hiring prospects and can instead create a negative impression. A survey by résumé service Zety found that 20% of Gen Z respondents had a parent attend a job interview with them, while HR professionals reported receiving calls from parents about applications, performance reviews, benefits, and even absences. Many employers said they now encourage parents to step back and instead coach their children to communicate directly with managers and recruiters.
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