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Accountancy Slice
USA
22nd September 2026
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THE HOT STORY

KPMG reorganizes AI operations into new innovation incubator reporting directly to CEO

KPMG has combined its artificial intelligence (AI), innovation, and technology partnership functions into a new Client Technology & Innovation (CT&I) group designed to develop AI-native businesses and new client offerings. Effective September 22nd, the unit is led by 15-year KPMG veteran Todd Lohr, who has been appointed vice chair and reports directly to chief executive Tim Walsh. CT&I brings together product and platform strategy, commercial infrastructure, firmwide AI and data strategy, and an internal venture studio intended to create businesses that could eventually be integrated into KPMG, spun out with external investment, or operated as joint ventures with technology partners. Existing relationships with Anthropic, Google Cloud, Microsoft, OpenAI, and Databricks will also sit within the group. The reorganization coincides with the September 30th retirement of Steve Chase, vice chair and global head of AI & Digital Innovation. Lohr said the new structure is intended to help KPMG commercialize internal ideas more quickly and potentially create billion-dollar businesses.

CYBERSECURITY & PAYMENTS

It's almost Cybersecurity Awareness Month!

The threats hitting accounting firms today are faster, smarter, and easier to launch than ever before. And your financial data is exactly what attackers are after.

This October, BILL is hosting a month of free content designed specifically for accounting and finance professionals. Register once to access four expert-led, CPE-eligible webinars, plus practical tools and resources delivered to your inbox throughout the month.

Whether you manage a small practice or oversee security across a large accounting firm, you’ll walk away with practical tools you can put to work immediately. The content is free, and registration is open now.

Your defense starts here.

 

TAX

IRS challenges popular wealth-transfer strategy in $736m GRAT tax dispute

The IRS is challenging the use of grantor-retained annuity trusts (GRATs), in a case that could affect a popular strategy used by wealthy Americans to transfer appreciating assets to their heirs while minimizing gift and estate taxes. Chuck and Trisha Elcan are contesting a $736m bill comprising $614m in gift taxes and $122m in penalties related to three GRATs funded in 2018 with assets valued at about $1.5bn, including interests in holding companies containing HCA Healthcare stock. The dispute centers on Trisha Elcan’s use of interest-bearing promissory notes to purchase assets from the trusts, with portions of those notes later forgiven to satisfy annuity payments. The IRS argues that the arrangement violated GRAT regulations and made the transfers taxable gifts, while the Elcans maintain that the transactions complied with tax law. With the case pending, some advisers are recommending that clients avoid using promissory notes in GRAT transactions until the Tax Court provides greater clarity.

California billionaire tax support falls to 45% as opposition rises

Support for California’s Proposition 40, a ballot measure that would impose a one-time 5% tax on the net worth of the state’s billionaires, has declined, according to a UC Berkeley Citrin Center-POLITICO poll cited by The Hill. The survey found that 45% of registered voters support the measure, 43% oppose it, and 12% remain undecided, compared with 50% support and 28% opposition in an earlier poll. Among undecided likely voters, however, 65% said they were leaning toward supporting the measure, while 15% were leaning against it. The proposal is supported by the California Democratic Party, unions including SEIU-UHW, Sen. Bernie Sanders, and Rep. Ro Khanna, while Gov. Gavin Newsom and Google co-founder Sergey Brin are among its opponents. The survey of 2,418 respondents was conducted from September 8-14 and has a 2.7-percentage-point margin of error. 

Citizenship question added to draft income tax form

The IRS has proposed a draft of the 2026 Form 1040 that may require taxpayers to disclose their legal status in the U.S. This early release of the common annual tax form is subject to approval by the Office of Management and Budget and may undergo changes before its final version is published. The draft indicates a shift in how taxpayers report their information, with a specific question about whether they or their spouse are legally in the country.

ECONOMY

Fed’s Kashkari warns U.S. inflation has spread well beyond energy prices

Minneapolis Federal Reserve President Neel Kashkari has warned that U.S. inflation remains too high across the economy, with price pressures extending well beyond the recent rise in oil prices and into areas such as services. Kashkari said the Fed cannot directly address energy supply disruptions, but monetary policy can tackle broader, underlying inflation. He supported the Fed’s latest 25-basis-point rate increase, which lifted the federal funds target range to 3.75%–4.00%, the first increase since July 2023. The Fed has also raised its inflation forecasts, projecting headline PCE inflation of 3.7% and core PCE inflation of 3.4% for the year, while pushing its expected return to the 2% target to 2029. Sixteen of 18 FOMC participants projected at least one additional rate increase, and 17 viewed inflation risks as tilted to the upside.

CORPORATE

Major Wendy’s franchisee files for bankruptcy

Meritage Hospitality Group, one of the largest Wendy’s franchisees in the U.S., has filed for Chapter 11 bankruptcy protection, citing rising beef costs, weaker brand marketing, and pressure from discounting and promotional strategies. The company, which operates 314 Wendy’s locations and employs about 8,850 people, reported approximately $651m in liabilities and $725.9m in assets, and said its restaurants will continue operating while it restructures. Meritage closed 60 underperforming Wendy’s locations at the end of 2025 and plans to close or sell additional sites, while also facing a franchise dispute in which Wendy’s says it is owed roughly $147m in past-due royalties, fees, and operating charges. Meritage said its average beef costs rose nearly 19% year over year in the three months through June, adding to pressure from tariffs, adverse weather, and six consecutive quarters of declining Wendy’s same-store sales.

REAL ESTATE

U.S. apartment landlords face mounting pressure as $1.8tn debt burden comes due

U.S. apartment landlords face growing financial strain as more than $1.8tn of debt matures over the next decade, including about $757bn through 2028. Nearly $300bn is due in 2026, followed by $223bn next year, forcing many owners to refinance loans at borrowing rates roughly twice those available five years ago. The pressure follows a pandemic-era apartment investment boom, when mortgage rates were around 3%, rents were rising rapidly, and investors borrowed heavily, particularly for Sunbelt properties. Subsequent oversupply, weaker rent growth, higher interest rates, and falling property values have pushed some owners toward defaults, distressed sales, or returning properties to lenders. Multifamily loan delinquency rates in commercial mortgage-backed securities have risen from 1% in October 2023 to 7.1% this year, while apartment values are now more than 20% below their 2022 peak. The distress is also creating opportunities for well-capitalized investors to acquire properties at substantial discounts.

FRAUD

Polymarket faced $10m fraud attempt

Fraudsters attempted to steal at least $10m through Polymarket’s U.S. platform earlier this year by placing bets with stolen debit cards. The prediction markets platform's payment processor at one point rejected more than 80% of the deposits it handled as fraudulent, according to The Wall Street Journal. The company's CEO, Shayne Coplan, reportedly downplayed the incident to employees, instructing them to focus on growth now and deal with regulatory fines later. Polymarket says it has since strengthened its infrastructure and leadership. An investigation by the law firm Sullivan & Cromwell concluded the company had complied with regulations, according to people familiar with the findings. Separately, the FT reports that Polymarket is convening with European regulators to make the case that it should be regulated under financial services laws instead of local gambling statutes.

CYBERSECURITY

IRS cybersecurity woes continue

For the second consecutive year, TIGTA has criticized the IRS's cybersecurity program, stating that "if the IRS does not take steps to mitigate these deficiencies, taxpayer data could be vulnerable." The report for fiscal year 2026 revealed that 86% of sampled information systems had critical vulnerabilities that were not addressed within the required 30-day period. Additionally, the IRS failed to provide an inventory of its critical software and did not meet federal standards for identifying cybersecurity risks. Despite some progress, including improvements in multifactor authentication, the IRS's overall cybersecurity effectiveness remains in question. TIGTA noted that only about one-third of required control assessments had been completed, highlighting ongoing security challenges.

TECHNOLOGY

Former IRS chief calls for AI-driven modernization to cut delays and compliance costs

Former acting IRS commissioner Michael Faulkender has called for greater use of artificial intelligence (AI) and modern technology to improve taxpayer services, arguing that lengthy processing times and outdated systems impose significant costs on U.S. businesses. The National Taxpayer Advocate said the IRS took an average of 401 days to process amended business returns in fiscal 2025, while business correspondence cases took 319 days. Mr. Faulkender cited an estimate that business income-tax return compliance consumes about 935m hours and costs more than $126.2bn annually. He recommends connecting the IRS’s 18 siloed computer systems, using AI for taxpayer services as well as enforcement, phasing out paper correspondence and filing, and introducing deadlines for IRS responses. He also advocates safeguards around AI, including privacy protections, zero-data retention policies, human review and appeals, reliability testing, and continued public reporting of service-performance metrics.

AI staff complain of mental toll over fears of threat to society

The FT reports that staff at AI companies and institutions are suffering from the severe mental strain associated with working on systems they fear are unsafe for public release.

INTERNATIONAL

Harley-Davidson faces renewed tariff pressure in U.S.-Canada trade dispute

Harley-Davidson has again become a target of retaliatory tariffs, with Canada imposing a 50% import duty on large U.S. motorcycles as part of its response to heightened American trade restrictions. The motorcycle maker has absorbed more than $170m in retaliatory tariff costs over the past eight years to limit price increases, including $8m from Canadian tariffs last year, although Canada accounted for just 4% of Harley-Davidson’s $4.5bn in revenue. The company’s prominent American identity and manufacturing presence have repeatedly exposed it to trade retaliation, including EU tariffs in 2018 that prompted Harley-Davidson to shift some Europe-bound production to Thailand. With Canadian dealers concerned that higher prices could weaken demand, producing Canada-bound motorcycles in Thailand could provide an alternative if the dispute continues, as Canadian authorities have said goods that do not originate in the U.S. are exempt from the new tariff.

China's offshore trust tax crackdown could hit single stocks, BofA says

China's new income tax crackdown on offshore trusts could present ‌short-term risks on certain shares as payment deadline approaches, according to BofA Securities. Offshore-listing private companies could be under more scrutiny, while state-owned companies were less likely to be affected, observed Winni Wu, BofA Securities China Equity Strategist. ⁠In July, Chinese authorities said they will impose individual income tax on assets ​placed in offshore trusts and the income they generate, and the ​unpaid taxes must be settled within 90 days. That deadline is now approaching.
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