Key takeaways:

• • • The wash sale loophole is likely closing — For clients that have been harvesting crypto losses and immediately repurchasing the same asset should know that “wash sale” strategy may soon work exactly like it does for stocks — with a mandatory 30-day waiting period.

    • Non-compliant holders have a potential off-ramp — A proposed voluntary disclosure program would let clients that haven’t properly reported digital asset income to get into compliance with reduced penalties — but it’s only available for a limited time.

    • Staking and mining income treatment is changing — Proposed legislation would allow taxpayers to elect to defer recognizing newly minted digital assets as income, which could be a meaningful planning opportunity for active miners and stakers… or a trap, depending on their situation.

Walk into any conversation with a cryptocurrency-owning client right now and you’re navigating the same awkward reality: The rules are genuinely unclear, have been unclear for years, and yet the IRS has increasingly expected compliance anyway. Now, however, the U.S. House Ways and Means Committee is trying to resolve that tension.

And crypto legislation is one piece of a much larger shift reshaping the tax profession and potentially impacting clients right now. The recent 2026 State of Tax Professionals Report from the Thomson Reuters Institute maps the challenges and opportunities defining the profession this year, including AI adoption, advisory pricing, talent constraints, and the growing gap between what clients want and what firms are charging for it.

Add to that list now, the changes coming for crypto asset owners and their tax, audit & accounting advisors.

New legislative changes for crypto owners

The package of crypto legislation — a collection of seven separate bills — currently under consideration by Ways and Means is serious enough that their tax advisors need to start thinking now about what it means for clients.

Some of these new proposals include:

The wash sale rule: A strategy that may be changing

Of all the provisions in the package, extending wash sale rules to digital assets will have the broadest practical impact. Currently, crypto investors can sell at a loss, immediately buy back the same position, and still claim the deduction — a strategy unavailable to stock investors. The proposed legislation would change that, applying to digital assets the same 30-day before-and-after window that governs stock transactions.

For clients with active portfolios, this isn’t just a planning consideration — it’s a recordkeeping one. Every transaction would need to be evaluated against a rolling 60-day window across potentially multiple wallets and exchanges. The change to this rule was hardly unexpected — the question was never really whether the wash sale rule would come to crypto, but when. Tax advisors should begin their honest conversation with clients by acknowledging that.

Mining and staking: A choice with consequences

For clients who mine or earn staking rewards with crypto, the proposed gives crypto miners and stakers the ability to elect to defer income recognition, which would treat newly minted digital assets more like self-created property than an immediate taxable event.

In practice, the calculus is complicated. Deferring income means the cost-based question gets pushed forward, not eliminated. If the asset appreciates significantly before sale, a client who deferred income recognition could face a larger ordinary tax event later. If the asset depreciates, owners have lost the ability to recognize the loss in the year of receipt.

Making the right choice — with the advice of a tax professional — depends almost entirely on the client’s individual circumstances, such as their marginal tax rate, their expectations for the asset’s trajectory, and their liquidity needs. This is exactly the conversation that tax professionals need to be having with clients around this issue.

The voluntary disclosure program: A limited window

Perhaps the most immediately actionable provision for many tax advisors is the proposed one-time voluntary disclosure program, which gives taxpayers who haven’t properly reported crypto income the opportunity to get into compliance with reduced penalties and a clean slate.

The IRS has run these programs before, and the pattern is consistent — the best terms are early, enforcement pressure increases after the deadline, and clients that wait because they hope the problem will disappear tend to regret it.

Simplification and opportunity

Not everything in the package adds complexity. would exclude gains or losses on network fees and regulated US dollar stablecoins by removing a reporting headache that has made crypto compliance so cumbersome for everyday users. And the Charitable Deductions for Digital Asset Donations Act would eliminate the qualified appraisal requirement for donated digital assets when market prices are readily available, lowering the friction on a strategy that has always made good tax sense for clients that holding appreciated crypto with charitable intent.

The tax advisors that will offer their clients the most value in a post-legislation world are the ones already holding these proactive conversations, and reviewing which clients have crypto exposure, identifying which may have unreported income, flagging which miners and stakers should be thinking about the deferral choice, and identifying charitable giving opportunities before the appraisal requirement disappears.

In addition, the voluntary disclosure program is the clearest example of how proactive advisory work can pay off. Clients that have quietly hoped their unreported crypto transactions would stay below the radar need someone to tell them plainly that a window for clean resolution is likely opening — and that waiting for it to close is not a strategy. That conversation is uncomfortable, of course, but it’s also exactly what a trusted advisor is for.

Beyond compliance, the considered package of crypto legislation creates the need to have genuine planning conversations that didn’t exist before. For example, the wash sale question is time-sensitive, and the staking deferral election requires modeling. None of this requires tax advisors to wait for final regulations; rather, it requires they know their clients well enough to know which ones have exposure, which have opportunity, and which needs a conversation they haven’t thought of requesting.

Right now — in the space between a Congressional hearing and a presidential signature — that is the most valuable thing a tax professional can offer.

You can download a copy of the Thomson Reuters Institute’s 2026 State of Tax Professionals Report here

Key takeaways:

• • • Almost two-thirds of tax firms expect revenue to grow in 2026 — However, the top two revenue drivers — fee increases and organic client acquisition — both have natural ceilings. Sustainable growth requires moving beyond these transactional levers toward strategies that don’t plateau.

    • Advisory services are the profession’s most in-demand category and its lowest-margin one — This a pricing problem, not a demand problem. Firms that shift to value-based or fixed-fee pricing for advisory work, rather than billing it hourly alongside compliance, consistently report stronger margins over time.

    • More than half of firms are expecting leadership transitions by 2030 — Succession is now a growth variable, not just an HR one. Firms that treat it as a strategic priority now are better positioned to maintain momentum through leadership changes.

The headline numbers from the recent Thomson Reuters Institute’s “2026 State of Tax Professionals Report” — which surveyed more than 600 tax professionals worldwide — are strong. Profit margins across tax, audit & accounting firms averaged above 30% throughout 2025, nearly half of all firms saw profits rise, and two-thirds expect revenue to increase again over the next 12 months.

For most firm leaders, this represents a genuine shift in conditions after years of talent pressure and compliance commodification.

However, a deeper dive in the data shows is that revenue growth and margin growth are not moving in the same direction for most tax firms. The gap between the two is where the profession’s real growth challenge sits and understanding it is where the more useful conversations start.

What is actually driving tax firm revenue growth?

The two biggest revenue drivers cited in the report are fee and rate increases (with 23% of respondents saying this) and organic new client acquisition (22%). Both are proven levers, and both have limits. Fee increases work until clients push back or competitors undercut; and organic acquisition stalls when capacity runs out. Neither of these methods on their own addresses whether firms are growing in ways that actually improve their long-term margin picture or are simply doing more of the same work at a slightly higher price.

The report flags this directly, noting that firms “see growth itself not as a strategy, but rather as a goal,” and that the method chosen to fuel it “will determine the strategy necessary to achieve it.” That distinction — between growth as a goal and growth as a strategy — is where firms that sustain momentum tend to separate from those that plateau.

Why are advisory services the lowest-margin work in the portfolio?

Almost three-quarters (74%) of respondents surveyed say most clients strongly want a trusted advisor relationship that goes beyond basic tax filing. And firms are responding — when asked which services their firm plans to start offering to clients in the next 12 months, almost two-thirds of respondents (65%) say their firm is either planning to offer or considering offering tax strategy advice.

Clearly, the pipeline for advisory work is being built, but the margin data tells a different story about what happens once those services are actually delivered.

The report’s diagnosis that the “advisory pricing gap is not caused by lack of demand — the root cause is lack of confidence in the value of the services provided.” Firms using value-based or fixed-fee pricing for advisory work report stronger margins over time, with margins above 31%. Packaging advisory work into defined service tiers, rather than billing it hourly alongside compliance, makes the value more legible to clients and easier to price consistently.

Is talent shortages limiting firms’ growth potential?

More clients, more advisory services, and more complexity all require more capacity; and 40% of respondents say their firm’s capabilities are currently constrained or at risk because of talent issues. For midsize tax firms — those with between 4 and 29 professionals — that number climbs to 51%. This constrained capacity can severely limit which services a firm can offer, how many new clients can be absorbed, and how quickly advisory expansion can actually happen.

Hiring alone is not the answer. Those firms managing this challenge the most effectively tend to combine task reallocation — moving non-advisory work to junior staff — with structured internal development programs that build the type of advisors they need rather than trying to hire them.

Which structural decisions will determine growth through 2030?

More than half (51%) of respondents say it is likely or highly likely that one or more partners or firm leaders will retire or leave before 2030. Most expect to fill those roles internally, with only 27% thinking outside partner recruitment is likely. Firms are also genuinely split on whether they stay the same size and structure over the next five years, or change via mergers, acquisitions, or outside capital infusions.

These are growth decisions even when they don’t look like it. As the report notes, “growth is not a universal imperative” — indeed, some firms will deliberately choose resilience over scale, and that is a legitimate path. The firms that tend to struggle are those that have not made the choice explicitly and instead find it made for them by departing partners, capacity limits, or competitors that moved faster.

For tax, audit & accounting firms, the revenue conditions in 2026 are as favorable as they have been in years — revenue is up, clients want more services, and the profession has more tools available to deliver that expanded service.

Those tax firms that convert these current conditions into lasting growth will be the ones that have matched their ambition with a strategy that’s specific enough to act upon.

You can download a copy of the Thomson Reuters Institute’s 2026 State of Tax Professionals Report here

Key takeaways:

• • • Profits continue to be strong — Most tax & accounting firms saw revenues and profits increase in 2025 despite a chronic talent shortage and other systemic challenges.

    • Optimism around AI adoption — Tax professionals are generally optimistic about AI-enhanced technologies, and their firms are backing their optimism with unprecedented levels of investment.

    • Expansion of advisory services — Firms are expanding their advisory service offerings to clients in such areas as tax strategy and business consulting, fueling growth and providing opportunities for competitive differentiation.

Tax, audit & accounting firm professionals have been concerned for years that the one-two punch of do-it-yourself tax software and automation might eventually erode the value of —and demand for — their services. However, according to the Thomson Reuters Institute’s “2026 State of Tax Professionals Report”, which surveyed more than 600 tax professionals worldwide, firms of all sizes are adapting remarkably well to the current era of rapid technological change and political upheaval.

Indeed, tax professionals surveyed say that, in addition to traditional tax preparation, their customers want and need more advisory services, a trend that has been gaining momentum for several years. In response, many firms are continuing to expand their service offerings in the areas of tax strategy, business consulting, decision support, and financial planning — especially at larger firms with more abundant resources.

The result of this gradual shift in service offerings is that profit margins for tax & accounting firms worldwide averaged about 30% in 2025, with some firms registering profit margins of more than 40%.

Efficiency and growth were top strategic priorities

When asked about their top strategic priorities for the coming year, survey respondents cite efficiency and promoting firm growth as the top factors on the strategic agenda for 2026, even more emphatically than they did in 2025.

Further, they see that making more and better use of technology is still the most immediate path to greater efficiency,  which is why introducing additional automation and AI — or just trying to get the most out of a firm’s existing technology stack — was also mentioned as an important focus for the upcoming year.

Still searching for solutions to talent challenges

Challenges still abound, however. An anemic pipeline of new talent and the ongoing retirement of senior personnel are among the top barriers to progress and profitability at many firms, the report indicates. The report also notes that the resulting competition for qualified candidates leads to overwork, skills gaps, and capacity restraints, all of which can impede a firm’s ability to compete and grow.

Many respondents say their firms are using multiple strategies to address these issues, including more targeted training, career development, outsourcing, task reallocation, and automation. Competition for top talent is intense, nevertheless; and the report shows that midsize tax firms may feel the talent squeeze harder than others, chiefly because larger firms can offer higher salaries and more career opportunities to retain top talent.

Another way firms are addressing their talent challenges is by automating more tax processes and workflows; however, the report also suggests that many firms have reached the point in their technological maturity at which it may be more difficult to identify additional processes to be automated. As a result, these firms find themselves in somewhat of a holding pattern, unable to advance technologically because of unyielding systemic and cultural impediments.

Meanwhile, many larger firms have already built the technological infrastructures they need to support more advanced forms of automation and data analysis. Now, the report reveals, these firms are shifting their focus to make better use of workflow-enhancing tools that can enable more efficient operations, expand their firm’s capabilities, and serve as a competitive differentiator.

Not surprisingly, the conversation around AI is heating up as well. While tax professionals may not be so interested in public chatbots such as Claude and ChatGPT, their attention is directed toward the many ways in which AI can enhance the tools they already use and how intelligent deployment of these tools can benefit their firms. Indeed, AI was the only category of technological investment which experienced year-on-year budget growth, the report shows.

Overall, the “2026 State of Tax Professionals Report” offers invaluable insight into where tax professionals see their firms and their industry now, shedding light on how the world’s top tax leaders are advancing the profession.

You can download a free copy of the full Thomson Reuters Institute “2026 State of Tax Professionals Report” by filling out the form below:

Key takeaways:

• • • Prompt engineering pays off — Tax professionals who master clear, contextualized AI instructions see immediate gains in output quality and speed.

    • AI doesn’t replace professional responsibility — Every output that carries your name requires your verification and your judgment.

    • Link learning to a real problem — The most effective way to build needed skills is to focus on your current workflow, not to chase every new tool as it emerges.

For tax professionals, technical excellence used to be enough. Know the code, understand the cases, apply the rules correctly — that was the job, and it was sufficient. It isn’t anymore. Not because the technical knowledge matters less, but because the professionals competing for the same work increasingly bring other talents to the table, such as the ability to do in an hour what used to take a day; to provide insights from data that would have taken a week to compile manually; and to deliver polished, well-reasoned analysis at a pace that wasn’t possible five years ago.

This rarified capability doesn’t come from intelligence or experience alone; rather, it comes from skills — specific, learnable, practical skills.

The data bears this out. Improving efficiency through technology has been the top strategic priority for firms for three consecutive years, with 44% of firm leaders citing it as their primary focus, according to the Thomson Reuters Institute’s . Indeed, 47% of tax professionals surveyed said investing in AI should now be a top priority — and yet, 18% of firms still use no automation at all.

This gap between intention and capability is real, and it sits squarely with the individual tax professional.

The skills most needed by today’s tax professionals

To help close this gap and improve tax professionals’ overall work value, there are several specific skills that demand attention, including:

Prompt engineering: The skill nobody takes seriously until they see what it does

The name doesn’t help — but set that aside, because the underlying skill is straightforward: giving your AI tools clear, precise, well-contextualized instructions that produce outputs that are worth using.

Most people start badly when approaching a blank AI screen. They type something vague, get something generic, and conclude the tool isn’t useful. That conclusion is wrong, because it was the instructions given, the prompt, that was the problem. Specify the entity type, jurisdiction, tax year, audience, and format. Then tell the tool what you need and why. The difference in output quality is not marginal.

Of course, it’s important to remember that AI will tell you things that are wrong with complete confidence. It will cite an amended provision, apply a rule from the wrong jurisdiction, or construct a plausible analysis on a flawed premise — all without flagging any of it. The professional responsibility to catch it remains entirely upon the user. That’s not a flaw in the tool; it’s a reminder that expertise isn’t being replaced here — it’s being put to better use.

Data literacy: The capability gap most tax professionals don’t know they have

Tax work is data work. Today, what has changed is the expectations around the volume and complexity that professionals are now required to handle, interpret, and present, often with fewer resources than a decade ago.

Advanced spreadsheet proficiency is the starting point, and the emphasis on advanced is deliberate. The features that most professionals have never explored are precisely the ones that separate those who spend three hours processing data from those who spend 20 minutes. The ability to build visual dashboards that communicate tax data clearly — effective tax rates, provision variances, deferred movements, and more — is increasingly an expectation in corporate environments rather than a differentiator. For those professionals who handle large datasets or complex scenario modeling, even a foundational understanding of represents a significant capability uplift.

The Tax Professionals Report found that 57% of firm leaders cited getting better use out of existing technology as their top investment priority — more than those planning to buy new systems. The problem, in other words, isn’t the tools; it’s having the skills and the understanding to use them.

Workflow automation: Reclaiming time from work that shouldn’t exist

Look at any tax workflow closely and you’ll find steps that are repetitive, rule-based, and time-consuming — not because they require a tax professional’s skilled judgment, but because nobody has stopped to ask whether these routine tasks could be done differently.

Again, the harder part of improving your skill set as a tax professional isn’t learning the tools; rather, it’s developing the habit of process analysis, a way of thinking that will allow you (among other things) to distinguish between steps that require genuine expertise and steps that are simply consuming time.

AI judgment: Knowing what to trust and what to verify

This is the skill that determines whether AI makes you more effective or creates problems you didn’t anticipate. This means validating outputs against primary sources before they reach a client. It means recognizing that AI reflects training data that may be outdated or jurisdiction-specific in ways that aren’t readily apparent in the output. And it means knowing when a task is too nuanced or too high stakes for AI to handle reliably.

Professional responsibility does not transfer to the tool itself. If an AI-generated analysis carries your name, it is your analysis.

Communicating and staying current

As routine tax compliance work becomes more automated, the premium on communication rises sharply. The Tax Professionals Report found that three-quarters of clients now strongly desire advisory services beyond tax preparation from their outside tax professional — yet most tax firms still derive their greatest profits from simple tax return preparation.

Those professionals who can close that gap are those who can translate technical work into clear, confident guidance that their clients can act on.

Going forward, the tools will keep changing. Identify the problem in your current workflow that costs the most time, find the skill that addresses it, and build from there. The professionals who will define the next decade will combine this deep technical knowledge with the ability to work faster, more clearly, and more adaptively than those who came before them. That combination is not yet common, but it’s also not out of reach.

For more on how tax professionals are navigating technological change, visit the or download the full 2025 State of Tax Professionals Report

Key insights:

• • • Technology is a priority — Those tax, accounting & audit firms that are prioritizing technology to increase efficiency and profitability are already seeing improved efficiency.

    • Strategic planning is essential — While technology is crucial, many firms still lack a formalized growth strategy, which limits their ability to extract the most value from their technology investments.

    • Positive financial outlook — Despite challenges, tax firms are in a strong financial position, with 65% reporting increased revenue in the past 12 months and 45% seeing profit growth.

For today’s tax, audit & accounting firms, there are a number of differing pathways to reach growth and profitability. Many are expanding their service offerings, such as a move into advisory services; some are looking to increase headcount, betting that more personnel can translate into more work from clients. And a portion are even looking into outside investment, such as from private equity firms, hoping that a bolstered bottom line can help them get a jump start on the competition.

Yet no matter the growth strategy, there is one paramount priority among all firms today: technology, which they see as a necessity to gain greater efficiency. Indeed, improved efficiency and adding more technology are tax firms’ top priority for the coming year, and in turn, greater use of technology is seen as the dominant strategy to drive firm profitability, according to the recently released 2025 State of Tax Professionals Report from the Thomson Reuters Institute.

Tying technology to overall growth, however, may be easier said than done. Many firms still have not formalized their growth strategy, and a number are still trying to optimize use of their current technology, let alone keep up with new innovations such as generative AI (GenAI). As a result, technology may be the primary way firm leaders wish to increase profitability, but they need to focus more on strategic planning to better extract value from that technology in order to succeed.

The importance of efficiency

Overall, today’s tax, audit & accounting firms look to be in a strong financial position. Almost two-thirds (65%) of survey respondents report that their firms saw increasing revenue in the past 12 months, while 45% say their firm’s profit has grown, too. Similar percentages also report expecting their firm to increase revenue and profit over the upcoming 12 months as well.

Even with these positive indicators, however, many firm leaders indicate there is more room for growth. In particular, many are pointing towards technology as a potential area of interest, with nearly half (49%) of respondents saying their firms are actively applying greater use of technology as a growth strategy, while an additional 32% said their firms are considering technology usage as part of their growth strategy.

This is perhaps no surprise given the tax industry’s need to do more with less. Previous years’ iterations of the Tax Professionals Report have highlighted the recruiting and talent struggles facing the industry, and this year is no exception. Hiring, attracting & retaining talent, and staffing matters still rank among the top challenges for firm leaders, and as such, it’s no surprise that firms are turning towards automation to fill those gaps.

New advanced tech tools such as GenAI are increasingly included among those strategies that leaders see that could make up for talent shortages by providing more efficient tax return preparation, regulatory research, and document summarization and review, among other tasks. According to the report, however, while firm leaders are interested in GenAI and other new technologies, they’re still looking to extract more value from the technology tools they already have first.

Indeed, when many firm leaders talk about technology driving growth, it may not be that they’re really considering investing in new technologies at all. Many firms have invested heavily in technologies in recent years, but don’t actually get the most value out of those new systems because they are left unused, or because tax professionals are untrained and don’t use the systems properly — or even because client demands do not align with the technologies that firms have put in place.

When firm leaders want technology to drive their future, what they really want are more efficient processes and procedures that technology can bring, allowing them to do more with less.

A strategy for technology

With that in mind, how can tax, audit & accounting firm leaders extract the most value from their technology purchases, both new and old? It starts with tying technology usage to the overall growth strategy of the firm.

In some ways this should be straightforward, given how many firm leaders cite efficiency as one of their foremost goals. For some firms, however, tying technology to strategy may run into a fundamental problem: They don’t actually have a directly defined growth strategy. This is true particularly for smaller firms (those with 1 to 3 employees) at which only 26% of respondents said their firm had a defined growth strategy. However, even in midsize firms (4 to 29 employees), just 40% of respondents said their firm had a defined growth strategy.

Given that, getting the most out of technology may require firms determine a defined strategy for growth first. That strategy can have a number of varying facets, but of those firms that do have a growth strategy, it’s no surprise that technology and growth are intertwined. About two-thirds of respondents report greater use of technology and automation as a part of that strategy.

With a growth strategy in place, firm leaders should then more easily be able to invest in technologies that would align with that strategy. For example, firms that include growing the client base as a core tenant of their growth strategy may want to invest in marketing and business development technologies, or explore which of their pre-existing technologies can be leveraged for that purpose. Firms looking to grow by moving into advisory services for the first time, meanwhile, may be looking to leverage technologies such as GenAI for idea and document generation.

Regardless of what direction that growth strategy may take a firm, it’s clear that technology will likely play a major part in its future. Not only are clients clearly indicating that they want their outside tax firms to do more with less, but those firms now see that technology is having a positive impact on their bottom line.

As the Tax Professionals Report notes: “Many people have concerns about the impact of AI and other emerging technologies on how professional services are managed and delivered, but the evidence thus far suggests that the onward march of technology is helping (not hurting) accounting firms’ ability to provide the services and guidance their clients want and need.”

You can download a full copy of the Thomson Reuters Institute’s 2025 State of Tax Professionals Report here

Indeed, growth has surged as the second-highest strategic priority for firms worldwide, jumping from fifth place in 2024, according to the Thomson Reuters Institute’s 2025 State of Tax Professionals Report.

That means, for tax firm leaders who are considering their growth options — whether planning for a merger, acquisition, internal succession, or just a more profitable future — it is critical for them to understand their firm’s valuation and the strategic underpinnings of scalable growth.

The report shows that over the past five years, the tax, audit & accounting industry has experienced increased consolidation, driven primarily by mergers and acquisitions (M&A), private equity interest in the industry, and contraction in the available pool of talent. At the same time, clients are indicating that they want their outside tax firms to offer more advisory services and new non-traditional competitors, such as tax-focused fintech firms and AI-powered platforms, are entering the market.

In response, tax firm leaders should be asking some variation of the following three questions:

• • • How do we stay competitive and attract the right clients?
    • Are we building a firm that will be desirable to a buyer or to the next generation of partners?
    • What is our firm worth, and how do we increase that value over time?

Factors that drive valuation

Valuation is about more than revenue. A buyer or successor is buying into the firm’s future — such as what potential revenue opportunities exist or can be created — not the past. While historic financial performance is foundational, tax firm value should be based on the following:

Recurring revenue and client mix — This can be a key indicator of a firms’ value. Firms whose business is primarily seasonal tax prep without any significant ongoing advisory work are clearly less valuable than those firms that can offer that. With the increase of tax prep work automation, clients can become agnostic as to where their tax prep work is done; or even may decide to utilize tax tools for themselves, depending on the levels of complexity they require. Thus, an outside tax firm that has a mix of tax prep and strong advisory service offerings may have the breadth in revenue stream and the potential for increasing offerings that makes it more valuable.

Owner dependence — If the survival of a firm is solely or mostly dependent on its founders or some of its partners its value is inherently less. For example, if the founder or key partner is hit by the proverbial beer truck and all or most of the firm’s clients head for the door, the firm will likely go under. This clearly isn’t a sound business model, and no one likely would invest in something that seems so tenuous. For most owners and founders the tendency is to do all or most of the heavy lifting work because they know what they want to get done. However, if firm growth in anywhere in your valuation consideration, then firm leaders should delegate to ensure clients not only have strong relationships with the owner, but with the firm’s entire staff.

Technology & operational efficiency — The Tax Professionals report highlights the correlation between a firm’s desire to grow and the understanding that to drive efficiency you have to utilize advanced technology. Today, tax firms still using outdated technology or those that are mired in manual processes will be unable to scale up enough to become attractive to a buyer, investor, or even potential talent.

Staff & culture — As the war for talent rages on in the tax, audit & accounting profession, those firms with stable, engaged teams obviously are more valuable than those with high turnover or looming mass retirements. Firms that foster a culture of strength and flexibility are more attractive to potential buyers, whether through M&A or private equity investment.

Brand & market position — Naturally, a firm brand and where it sits in the market is a significant valuation factor for a potential buyer or investor. Firms that operate in a profitable niche and have a strong reputation are clearly more valuable, period. For example, a firm specializing in an industry can position itself as an expert and therefore attract and retain clients in those target markets.

What growth really requires

For many tax, audit & accounting firms, growth isn’t just about adding more clients or increasing revenue. It’s about building systems, teams, and strategies that create sustainable, transferable value. In terms of being truly strategic, firm leaders should start by looking at their roster of clients and how each is served and priced. Knowing where each client resides — as high-value or low-margin customers — is the first step to making the necessary adjustments and focusing on more productive relationships.

Similarly, if growth is top of mind, then so must be succession planning. Firms that want to grow and retain value need to identify and groom future leaders early. This includes not just offering technical training, but also providing leadership development, creating equity pathways, and establishing client relationship handoffs.

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Further, investing in technology and client experience is no longer a nice to have, it’s an essential requirement. Most of us live in a world in which we expect immediacy and ease for everything, and tax firm clients are no different. They now expect fast responses, online access, and proactive advice — not just a completed tax return each year. Firms that invest in client relationship management systems, client portals, and advisory frameworks are better positioned to retain clients, charge premium fees, and scale effectively than those firms that don’t.

Yet, despite best intentions, some firm leaders fall into avoidable traps on their path to increasing valuation, including:

Focusing only on tax season — Firms that don’t develop year-round advisory-based services miss major opportunities for revenue and client loyalty.

Underpricing services — Undervaluing your firm’s own expertise hurts margins and attracts the wrong type of clients.

Failing to document processes — Institutional knowledge can become trapped in the owner’s head, which limits scalability and valuation, and is disastrous should a sudden loss of owner occur.

Ignoring succession planning — Similarly, many firm leaders wait too long to think about a transition to new leadership or managerial talent, which can result in the loss of firm valuation, key talent, and most importantly, clients.

Much like test driving a vehicle before you need one, firm leaders should get a fix on the valuation of their firm before any transaction or major change. Determining a baseline valuation is a good exercise that can help set goals and spot red flags. Based on the valuation data, firms then can use the information to help move everything forward, from streamlining processes and automating operations to defining ideal clients and what type of additional services (think advisory) the firm could offer or what other revenue opportunities it could pursue.

The foundation of a more valuable and scalable tax, audit & accounting firm isn’t built on working harder every tax season; rather it’s built on making intentional decisions, creating repeatable systems, establishing strong teams, and forging a deep understanding of what drives value in today’s tax, audit & accounting firm market.

You can download a copy of the Thomson Reuters Institute’s 2025 State of Tax Professionals Report here

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2025 State of Tax Professionals Report

This annual report surveys hundreds of accounting professionals from around the world to gain insight into their top priorities and biggest challenges, as well as what actions they’re taking to meet those challenges.

A profitable year

In the 2025 report, it’s clear that tax, audit & accounting firms have accepted the fact that certain types of routine tax work can and should be automated. Leaning on technology in this way has allowed firms to diversify their service offerings to clients into such areas as tax strategy and business consulting — key services that clients have been requesting and for which they are willing to pay top dollar.

And the strategy is working. According to the report, firms worldwide recorded an average revenue gain of 21.3% in 2024, resulting in an average profit rise of 25%.

Register now for The Emerging Technology and Generative AI Forum, a cutting-edge conference that will explore the latest advancements in GenAI and their potential to revolutionize legal and tax practices

Tax, audit & accounting firms still have plenty of challenges, however. According to the report, the most formidable challenge that firms are facing is attracting, hiring, and retaining quality talent. And causes of this talent shortage are many-fold, according to survey respondents, as are the strategies firms are using to fill skills gaps and enable senior staffers to make more efficient use of their time.

Beyond talent, the other challenges that respondents cited included keeping up with rapidly changing regulations and tax law and enacting better time management. And while technology is seen as a good solution to many of these challenges, it comes with its own difficulties. The time and effort spent learning and using new technologies is one obstacle. Another challenge is how to properly incorporate AI-driven tech solutions so that they complement firms’ existing technologies and provide the most benefit possible.

Top priorities for 2025

The report also explores in depth what priorities accounting firms are focusing on in 2025 and their strategies for achieving the goals they have set for the year.

As in past years, the top priority for accounting firms in 2025 is improving operational efficiency, primarily through more strategic use of various technological resources. This year’s analysis is a bit different, however, because technology isn’t being used just to create more efficient workflows — it is being deployed strategically to improve profitability.

Indeed, almost half (49%) of the survey’s respondents report that technology figures heavily in their plans to improve profitability. More lucrative services and greater responsiveness to clients are the primary ways in which modern tax technologies are contributing to the bottom line, according to respondents. The success firms are having with such strategies is also why, according to the report, the only budget item to see a significant increase in 2025 is investment in AI.

Respondents also cited other priorities, including a focus on firm growth and expansion of the client base, along with an expansion and improvement of client service offerings. Many firms are also exploring various pricing options that clients may prefer.

The push for growth

Another major theme of this year’s report is how firms are engaging in an aggressive push for growth, especially among midsize and larger firms. Again, technology is at the heart of this desire for growth, because it makes the imperative to grow both necessary and possible: necessary because competition for high-value clients requires a broader range of services that are enabled by superior tax technology; and possible because modern tax technologies and data-analysis tools now allow firms to provide higher-value advisory services to their clients.

Of course, this path to growth will require firms to ask themselves some deep questions, such as: Which additional advisory services are the most profitable for them? Beyond expanding client-desire advisory services, what new services can firms offer in the coming year? And how will technology impact the competition for high-value services and key clients?

As growth and technological innovation become even more intertwined today, the report shows that tax, audit & accounting firms that can successfully integrate AI-driven technology to improve their operations while strategically competing for high-value clients are the ones that will flourish in the time ahead.

You can download

a full copy of the Thomson Reuters Institute “2025 State of Tax Professionals Report” by filling out the form below:

According to the report, the need for improved efficiency is being driven by the number one challenge that tax & accounting firms are facing: The lack of or limited number of qualified candidates. This includes people with not only tax skills but technology skills as well. With only limited options, many firms are leaning into technology to get their work done more quickly and with better accuracy in order to provide clients with better-quality work overall. At the heart of the efficiency drive, tax firms must incorporate automation into almost all aspects of the way in which they work.

For tax firms to meet this challenge, firm leaders need to understand and determine what a proper technology stack should look like in order to meet firm needs. Indeed, a tax & accounting firm’s should be designed with its current and short-term business strategy in mind, as well as an understanding of the firm’s requirements. For example, tax firm leaders survey for the Tax Professional Report listed among their top investment priorities such items as tools to improve workflow processes, new tax technology solutions, and practice management tools.

For tax firms that are strategically contemplating and planning for their tech stack, the following factors should be explored: systems that integrate, advanced data analytics, artificial intelligence (AI), and the strategic use of cloud infrastructure.

3 technologies for consideration for the ultimate stack

1. Advanced data analytics and AI

The use of AI in tax technology isn’t new (and although new is a relative term, in the world of technology, is considered outdated.) In fact, use of tax technology dates back at least a couple of decades with machines assisting with simple tasks such as performing tax calculations and conducting some basic research. Over the years, some tax & accounting firms have slowly migrated to using tax technology for more complex work, including utilizing advanced data analytics and AI to provide more insightful, proactive, and personalized services.

For example, with the growing uncertainties of tax policies and regulations, tax firms may use software that employs . By analyzing trends gathered from historical data, firms can predict future patterns for their clients, such as potential compliance risks or financial opportunities. The use of AI and especially generative AI (GenAI) will continue to become a more important feature of tax technology.

Indeed, some firms may choose to work with AI and GenAI to research tax-related regulations and questions; others may choose to explore the use of to better assist with automation of routine tasks. Machine learning has the potential to automate the classification and extraction of data from unstructured sources such as invoices, receipts, and contracts.

Another AI-powered tool that can assist with automation is , which can be trained to automatically read, understand, and interpret client emails and other communications while extracting relevant information for filing purposes and automatically routing queries to the appropriate department or response templates.

2. Blockchain for security and compliance

One element of any tech stack has to include considerations for security and compliance, especially as all tax firms’ work involves their clients’ personal information. Although not new, blockchain technology can help firms handle data integrity and security, through features such as:

• • • Smart contracts — Traditionally utilized by the legal industry, can be programmed to execute tax payments when certain conditions are met, reducing delays and ensuring compliance.
    • Data integrity — Blockchain’s immutable ledger means once data is entered, it cannot be easily altered. This is crucial for audit trails and compliance, and provides transparent and secure record.

3. Integrated cloud infrastructure

Finally, integral to any technology stack an integrated cloud infrastructure that allows firms to streamline their operations because most of their data can be managed in a centralized way. Such technology allows for seamless integration of various tax software and applications, enhancing workflow efficiency and reducing errors by ensuring consistent data use across platforms.

The cloud infrastructure provides robust data security and compliance with tax regulations, which is critical for handling sensitive financial information. Additionally, it can offer scalability to handle peak times, such as tax season, without the need for heavy IT investments. Remote accessibility enables professionals to work flexibly from any location, which itself improves productivity and client responsiveness. Overall, an integrated cloud infrastructure supports more efficient, secure, and adaptable tax services.

The findings from the Tax Professional Report highlight a significant trend toward prioritizing efficiency within tax firms. This shift is largely underway and is being driven by the ongoing challenge of a shortage of qualified candidates, which has underscored the importance of integrating advanced technologies into everyday practices.

To address these challenges, many tax & accounting firms are developing a comprehensive technology stack that includes advanced data analytics, artificial intelligence, blockchain for enhanced security and compliance, and integrated cloud infrastructure. By doing so, these firms can not only improve their workflow and process efficiency but also enhance the quality of the service they provide to clients.

Further, this strategic adoption of technology will not only help in managing current firm limitations but also position these firms for future growth and adaptability in an increasingly digital and complex regulatory environment. As tax technology continues to evolve, firms that proactively invest in these technologies are more likely to thrive, ensuring client satisfaction and operational excellence going forward.

You can download a full copy of the Thomson Reuters Institute’s recent 2024 State of the Tax Professional Report here.

In fact, results from the newly released 2024 State of Tax Professionals Report, from the Thomson Reuters Institute, suggest that this year is shaping up to be a re-building year for many accounting firms. The annual report is derived from more than 500 surveys of tax professionals from accounting firms around the world, including the United States, Canada, the United Kingdom, Australia, and Latin America. Every year, the survey asks respondents about their top strategic priorities, their biggest challenges, and what their firms are doing to achieve the goals they have set for the year.

And according to the results, 2024 could be a year in which firms reassess their business models and take decisive action to make themselves even more resilient and competitive. As those tax professionals surveyed for the report say, many accounting firms are still grappling with the implications of technology and a persistent talent and skills gap, but they are also learning to adapt to the evolving business landscape while taking advantage of new business opportunities.

Impressively, some of these efforts are paying off. A majority of respondents in the survey said their accounting firms reported a 24% increase in revenue over the past 12 months, and many were expecting that their revenues will continue to rise at a rate of more than 20% over the next 12 to 24 months as well — a welcome note of sunny optimism for an industry that has seemingly dealt with more than a few black clouds in recent years.

Top strategic priorities for 2024

According to this year’s report, the top priorities for accounting firms in 2024 are:

• • • Driving efficiency
    • Retaining and hiring quality talent
    • Exploring new pricing models
    • Improving client services
    • Growing strategically

These priorities are similar to those cited in the past, although the order tends to shift from year to year. For example, the search for talent was listed as the fourth priority in the last report, but jumped to second this year, suggesting that the talent squeeze from senior-level retirements and an anemic pipeline of new blood entering the accounting field is an issue that accounting firms are still grappling with.

To address this and the many other challenges tax professionals face, accounting firms are reportedly employing a number of strategies, including greater use of automation and continued expansion of service offerings, especially in the areas of tax strategy and business consulting.

For the first time ever, however, one of the top priorities mentioned by tax professionals around the world is an eagerness to explore alternative pricing strategies in addition to simply billing by the hour.

Embracing technological innovation

The use of more advanced technology, including artificial intelligence (AI), is still very much a topic of conversation for accounting professionals. However, according to the report, technological innovation is a double-edged sword for accounting firms — a force that is not only displacing tax preparation as a core function but also providing the means for greater efficiency, higher profit margins, and the ability to provide a wider range of specialized tax services.

On balance, however, new tax technologies have proven to be beneficial for the tax & accounting profession overall. Indeed, most firms in the midsize- and large-firm categories are continuing to embrace automation as an efficiency driver, with almost half of respondents (47%) saying they are interested in leveraging new technology solutions.

There is also keen interest in — and some skepticism of — the possible applications of generative AI (GenAI) in accounting. Not many accounting firms use GenAI at the moment, but more than one-third (35%) of survey respondents said their firms will be investing in some form of GenAI or new AI-powered technology over the next two years — a significant increase from past years.

You can download a full copy of the Thomson Reuters Institute’s “2024 State of Tax Professionals Report” by filling out the form below:

The challenges range from ensuring that tax professionals get all of their clients’ tax related information in a timely manner to making sure they have what they need to perform their work.

What some firms did to help with busy season

Tax work has become more complex for a host of reasons, from increased regulations and changes in tax laws and policy to more demanding. For some tax & accounting firms, trying to counteract these and other challenges by adopting various strategies is an everyday struggle.

Indeed, professionals from most tax & accounting firms indicated adopting more advanced technology would play a crucial role in helping drive efficiency and streamline processes in their workday, according to the Thomson Reuters Institute’s 2023 State of the Tax Professional Report. Automation and software solutions can significantly reduce manual tasks, allowing professionals to focus on more complex aspects of their work, which is a huge boon for tax & accounting firms.

In general, most US businesses outsource some part of their overall operations, and according to, 57% of them said doing so allowed them to focus more on core business, improve service quality, and solve capacity issues. For tax & accounting firms, outsourcing has become a viable option for handling routine tasks, thus freeing up staff.

When considering outsourcing or right sizing the workforce, tax & accounting firms need first to consider their own staff’s collective skills. By reviewing which tasks are matched with which internal professionals, firms can assess the appropriateness of skill levels and decide whether additional training or education is needed or whether it is more appropriate cases to try to increase the skill-levels of certain employees or consider reassigning them to other tasks. Firms that are able to get these questions correct not only increase their efficiency but possibly generate more staff satisfaction.

Tips & tricks for surviving the busy tax season

Whether a tax & accounting firm has incorporated the above suggestions or not, or whether it is full steam ahead in trying to improve efficiency or streamlining work processes, there is still a level of businesses that all the technology in world will not be able to fix. As tax & accounting professionals rally through the busy tax season, we offer a few suggestions that will hopefully be a salve, a quick respite as the light at the end of the tunnel gets brighter. These simple and fun suggestions are a way to acknowledge firm members’ efforts and offer a gracious thank you for the work they do.

• • • Making simple gestures like impromptu ice-cream social or pizza parties not only boost morale but also reinforce the team’s cohesion. Understanding that time is a precious commodity, a 30-minute ice-cream social in the afternoon or a one-hour pizza party at which everyone gathers and does not talk about work, will be a welcome respite.
    • Regularly checking in with staff to ask about their well-being can make a significant difference in morale. Importantly, reminding everyone that they’re all almost over the surge in work that comes this time of year helps maintain perspective and motivation.
    • Encouraging staff members (and management) to get some exercise — there are plenty of studies that show the positive effects of a physical workout. Note: a workout can be as simple as walk (preferable outside), and studies also show the benefits on sunlight on physical and mental health. Yoga and breathing exercises are also helpful.
    • Promoting laughter – work is serious, however finding some humor each day can be a significant stress reliever.

Preparing for success: Looking ahead to 2025

Looking ahead, tax & accounting firms can take several steps to ensure they are better prepared for future busy seasons. For example, firm leaders should take time to perform a retrospection on the current year’s tax season. Reviewing and identifying what practices worked and what could be improved is essential, and this includes analyzing client feedback, staff input, and workflow efficiencies.

Anticipating regulatory changes is another important step in preparing for the next busy tax season. With tax regulations constantly evolving, firms that stay ahead of these changes can better serve their clients and reduce last-minute scrambles. The Tax Cuts and Jobs Act provisions that are expiring soon is one such area requiring attention.

Further, increasing automation and improving efficiencies should remain perennial priorities for firms. In fact, many tax & accounting firm professionals continued to list improving efficiency as a strategic priority, according to the Tax Professionals Report, which also showed that organizing clients by complexity and establishing advance deadlines for preparation can streamline workflows and reduce stress.

As tax & accounting firm leaders navigate the complexities of the busy season, the blend of technological innovation, strategic outsourcing, talent optimization, and a focus on staff well-being forms a comprehensive approach to overcoming challenges. By looking ahead and preparing strategically, firms can not only survive their busy season, but thrive during these demanding periods, setting a foundation for continued success and client satisfaction.