Key takeaways:

• • • Stability is the story — The OBBB’s main value has been predictability for business planning, not sweeping new rules — a sharp contrast to the disruption of prior major tax legislation like the TCJA.

    • Section 1202 is a live opportunity — The expanded QSBS exclusion has reopened planning conversations around corporate structuring that had cooled in recent years.

    • Plan for both today and tomorrow — Practitioners should help clients capitalize on current certainty while preserving flexibility, and they should help clients build tax positions that can hold up to increasingly AI-powered IRS scrutiny.

When major tax legislation lands, the instinct is to brace for upheaval. But one year after the passage of the (OBBB) Act, the consensus among practitioners is notably different: The OBBB didn’t rewrite the rules so much as confirm them, and that distinction has mattered more than it might sound.

Certainty over seismic change

Unlike the (TCJA) — which was passed in 2017, mostly took effect the following year, and forced practitioners to relearn much of the code — the OBBB’s significance lies less in what it changed and more in what it settled. It gave businesses a stable set of rules to plan against, rather than a moving target to which to react.

“From a purely tax lens, it was… easier to unpack than in prior years because there are fewer seismic changes,” says , Partner at Plante Moran, reflecting on the past year under the OBBB. “It was providing a lot of clarity that just [meant], at least for the next several years, we had the rules.”

That clarity is not a small thing. Multi-year business decisions — around such big-ticket items as entity structuring, capital investment, and succession planning — depend on practitioners being able to tell clients that the rules will hold. Thus, OBBB’s real contribution was buying back that predictability.

Section 1202 comes back to life

If one provision captures the OBBB’s practical impact, it’s the revitalization of — the qualified small business stock (QSBS) gain exclusion. The expansion of this program has done more than simply adjust a technical detail; indeed, it has reopened a whole category of planning conversations that had gone quiet.

“The action around the qualified small business stock gain exclusion… has really reinvigorated the Section 1202 planning conversations,” Eckert explains. “Ultimately, what we got was an expansion of the program. So, what that has done is reinvigorated those conversations around planning into corporate structures.”

For founders, investors, and the tax advisors who serve them, that means is back on the table — and often earlier in a company’s lifecycle than before, since the incentive to structure correctly from the outset is now more valuable.

A new kind of advisory opportunity

Of course, stability doesn’t mean passivity. If anything, the OBBB has expanded what tax professionals can offer clients. With a known set of rules, advisors can move beyond compliance and into genuine strategy by helping clients maximize their position under current law while still preparing for the fact that today’s certainty has a shelf life.

That balance — seize the moment, but don’t get comfortable — is a concept that isn’t lost on many tax specialists. “Maximize your opportunities today but also have a long-term view while having flexibility and preserving flexibility wherever you can, and knowing and anticipating that there could be future changes,” Eckert says, framing this moment as a broader opening for the profession, not just a technical one.

Legislative clarity, he argues, gives practitioners a reason to go deeper with clients than simply processing the next filing. “From a practitioner lens, I think [legislative changes] are a huge opportunity… giving us an opportunity to really bring value to our clients and to also get to know our clients better,” he notes. “It’s been, in a certain sense, a great opportunity to just build deeper relationships.”

In other words, the firms getting the most out of this environment aren’t the ones treating the OBBB as a compliance checklist; rather, they’re the ones using it as a reason to have a better conversation with clients about where they’re headed.

The IRS isn’t standing still either

The one area in which practitioners should definitely not get comfortable is enforcement. A smaller IRS workforce doesn’t mean lighter scrutiny — it likely means a different kind. As the agency leans more heavily on AI-driven tools, its ability to examine returns at scale is set to expand even as headcount contracts.

“I think across the board, we’re certainly aware of that and are counseling clients on the need to establish and build positions and think carefully about it,” Eckert explains. “In a world of AI-enabled tools, the scrutiny may actually increase, and the ability for the IRS to quickly and efficiently examine lots of data is something that could certainly exist.”

That means that tax advisors need to help their clients build positions that can withstand more sophisticated review, not less. Meticulous documentation and defensible reasoning matter more, not less, in an environment in which fewer human examiners can still cover more ground with better tools.

One year in, the OBBB’s legacy isn’t a story of dramatic reform, but rather it’s a story of tax firms and their clients finally getting room to plan. The tax advisors making the most of that room are the ones using it to build sharper strategies and deeper client relationships, all while keeping an eye on an IRS that’s quietly getting more capable of deeper examination.

You can find more ofĚýour coverage of the One Big Beautiful Bill ActĚýhere

Key highlights:

• • • Employer-driven curriculum design — The director of the accounting program at The University of Central Florida (UCF) consulted with 16 leading accounting practitioners to learn what AI skills employers need today from graduates.

    • Critical thinking milestones for students — UCF developed an AI competency framework delivered through a fictional theme park case study that was woven across tax, cost accounting, and financial accounting coursework.

    • Human skills as a competitive advantage — Recognizing that AI cannot replicate certain capabilities, UCF’s Dixon School introduced six to eight professional skills workshops (per academic year) covering topics such as relationship management, project management, agentic AI, and critical thinking to ensure that graduates bring irreplaceable human value to the profession.

The accounting profession is at an inflection point as the level of generative AI (GenAI) already in the workflow continues to reshape how audits are conducted, data is analyzed, and decisions are made. Already, one-third of tax firms are already using GenAI in their work, with 14% specifically usingĚý, according to the Thomson Reuters Institute’s recentĚý2026 AI in Professional Services Report.

For accounting educators, the question is becoming how fast and how boldly are they responding to marketplace needs by embedding advanced AI technology into their curriculum?

Building a curriculum the marketplace needs

Most schools benchmark themselves against peer schools, but , Director of the Dixon School of Accounting at the University of Central Florida (UCF) is starting with practitioners and employers to uncover what curriculum innovation is necessary to prepare his future graduates. In fact, when Dr. Thibodeau arrived at UCF two years ago, he made a deliberate decision to be innovative in his approach to inserting GenAI into the curriculum.

Instead of starting with the faculty, however, he consulted with employers who are hiring his graduates. Over a series of a few months, he led a team of 15 professors and lecturers who leveraged formal research interviews with 16 accounting practitioners, who were responsible for recruiting and hiring for their organizations. Dr. Thibodeau’s goal was to understand what employers are demanding for new accounting graduates.

What he heard led to creative changes within the curriculum. Through this consultation process, he learned employers need undergraduates in accounting who can think criticallyĚýthroughĚýAI output, interrogate it, challenge it, and ultimately exercise independent professional judgment about it.

From those conversations, Dr. Thibodeau and his team developed an AI competency framework which includes a “critical thinking milestone staircase” approach to measure progressive levels.

For example, Dr. Thibodeau says that one of the milestones is effective prompting. While this skill is a table-stakes capability, it is the foundation to learning how to query AI purposefully to get useful output.

Next — and perhaps the most critical skill — is the ability to transition from AI user to AI evaluator. At this stage, students learn to interrogate AI output, cross-reference it against authoritative sources, and recognize when a fluent-sounding answer is wrong. As Thibodeau notes, hallucinations are becoming less frequent as GenAI technology improves, but the risks of uncritically accepting AI output in a professional setting remain unacceptably high.

The next milestone is strategic GenAI problem-solving, which involves knowing what AI tools are best for which specific tasks and how to deploy GenAI within a larger professional workflow. “What’s going to give them the expertise to be that exceptional human-in-the-loop is to operate independently of the GenAI tool,” Dr. Thibodeau adds.

The delivery vehicle for this framework is a comprehensive case study that was built around a fictional theme park that spans across tax, cost accounting, and financial accounting coursework.

Building faculty support for curriculum innovation

The project required assembling a team of faculty members who were motivated by Dr. Thibideau’s vision to both insert innovation within the curriculum while offering meaningful impact and scholarship opportunities for his colleagues. To gain buy-in from his colleagues, Dr. Thibodeau emphasized their legacy with the chance to demonstrate with personal satisfaction that this creative approach will prepare students for the accounting profession’s future.

For faculty with scholarship requirements, he emphasized that this project could produce publications in top educational journals. Now, that vision is paying off. Of the five papers his colleagues produced, one has been accepted and the others are in various stages of the review process at the Journal of Accounting Education. There also will be six presentations from colleagues at the American Accounting Association’s Global Connect meeting this summer. As a byproduct, every faculty member involved also immersed themselves and improved their own skills in GenAI along the way.

Lessons for accounting programs

Dr. Thibodeau is candid about the current difficulty in assessing growth in critical thinking skills. In fact, the accounting department at UCF is experimenting and learning as they go. For example, an early attempt to use AI to grade students’ qualitative reasoning responses did not work well, and the current approach of using outcome-based indicators as a placeholder is imperfect, he acknowledges.

In spite of this, Dr. Thibodeau offers strong guidance for other accounting professors, which includes:

Keep studying how to teach developmental skills and evaluate judgment — Dr. Thibideau knows that this is a universal challenge at the moment at every university and for every organization that depends on the apprenticeship model. The routine tasks that built junior-level judgment organically are increasingly being absorbed by AI, and no one has figured out with certainty how to replace that developmental experience.

Require a CPA pathway — To close the gap on the technical side, the Dixon School has embedded a CPA review course directly into the master’s in accounting curriculum across all semesters to ensure students graduate with both the technical depth needed to challenge AI output and a clear path to passing the CPA exam.

Offer opportunities to develop skills that AI cannot replicate — On the human skills side, the school now runs six to eight professional skills workshops, which include relationship management, project management, agentic AI, and critical thinking. Indeed, these human skills were deemed necessary by the research done by the Dixon’s schools accounting practitioners, chiefly because AI cannot replicate these skills.

For other accounting programs watching from the sidelines, Dr. Thibodeau’s model offers a clear lesson on how to remain relevant in the age of AI. Indeed, proximity to practice is not optional. The schools that will produce the most sought-after graduates in the AI era will be the ones engaged in continuous, structured dialogue with the employers who hire them.

Further, curriculum innovation at this pace requires an institutional culture change that treats change as an opportunity rather than a threat. The curriculum must improve with it because continuous evolution is a baseline requirement. The schools that understand this now will produce the professionals who can best shape the AI-enabled future of the accounting profession.

You can find out more about how tax firms are managing their AI technology here

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’sĚý2026 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:

• • • Deploying AI and governing it are two different things — Most tax, audit & accounting firms are further along on deployment of AI than they are with setting up how it will be governed.

    • AI literacy and understanding will be key attributes — The skill that will define the next generation of auditors isn’t knowing how to use AI; rather, it’s knowing when to distrust it.

    • Risk assessment needs to be re-thought — The risk assessment gap is a structural problem, not a technology maturity problem. And no better model is going to fix it.

There is a version of AI adoption that looks like progress, but isn’t. It involves a pilot program that runs well, gains a positive internal review and a mention in the firm’s next thought leadership piece — and then nothing changes throughout the firm. The workflow that got automated stays automated, and everything else stays the same.

This pattern is more common than many tax, audit & accounting firms want to admit. The organizational work that scaling AI actually requires — such as deciding who owns the outputs, redesigning quality review, working out what happens when a model gets something wrong — doesn’t surface in a pilot. Instead, it surfaces in production. And those firms that have been running the same pilot for more than a year aren’t being cautious, they’re simply avoiding those decisions.

A recent survey by tech market research group International Data Corp. (IDC) of 1,005 audit and accounting professionals globally captures the gap precisely. The study showed that two-thirds of firms have AI embedded in strategy or underway in pilots, but only 7% . That distance between deployment and readiness is where most of the real work is hiding.

The audit profession is underinvesting in a key skill

Ask most audit firm leaders what skills their people need for an AI-driven practice, and the answers come back quickly: data analysis, AI literacy, and technology proficiency. Those aren’t wrong answers, but they’re incomplete in a way that matters.

The skill that will actually define audit quality in an AI-enabled environment isn’t the ability to use the tools; rather, it’s the ability to pressure-test what those tools produce. To read an AI-generated summary and identify what it might have missed, or to recognize when a flagged pattern in a data set is just noise rather than a red flag, or even to override a confident-sounding output when professional judgment says something doesn’t add up.

That’s closer to editing than accounting — and it’s a fundamentally different capability than simply being familiar with AI systems. Yet most re-skilling programs are building that familiarity, while it’s the understanding and judgment that separates auditors who use AI well from auditors who use it credulously.

Indeed, excessive trust in AI outputs is the specific failure mode the profession needs to train against — and that’s not getting enough attention.

The risk assessment problem is permanent

There’s a version of the AI-in-audit story in which every limitation is temporary — the AI models will improve, the training data will get better, the accuracy will increase. For most audit applications, that’s probably true, but for risk assessment, it isn’t.

Risk assessment requires professional skepticism: the trained disposition to question, probe, and not accept appearances at face value. AI models are trained to find patterns and produce coherent, confident output. Those two orientations are in direct tension. A model that identifies a pattern and presents it with confidence is doing exactly what it was designed to do. However, the problem is that professional skepticism sometimes requires distrusting precisely that kind of coherent, confident output — and then asking what the pattern is missing, who might be motivated to produce it, and whether the data behind it can be trusted.

That gap isn’t a technology maturity problem. It’s a structural problem. Nearly 80% of audit leaders in the IDC survey say they recognize the risk of algorithmic bias in functions like risk assessment and fraud detection — and that recognition points at something real. The right response isn’t to avoid AI in risk assessment entirely, of course, but it is to be clear-eyed about where AI’s role ends and where the auditor’s begins. Summarizing, flagging, and organizing are appropriate uses of AI, but the judgment about what the output means belongs with someone else.

Governance that actually means something

Most tax, audit & accounting firms have an AI policy; however, far fewer have built the infrastructure that makes it operational.

The two requirements that matter most are traceability and explainability. Traceability means that every AI output cites its source — if it can’t show its work, the firm shouldn’t rely on it. Explainability means the auditor who is reviewing the output can follow the reasoning and form an independent view of whether it holds together. Both of these concepts should be requirements, not preferences. The audit partner signing the report needs to be able to stand behind every conclusion in it, and that requires being able to read the chain from input to output.

Naturally, the more difficult governance question is what “human in the loop” actually means when the processes are operational. As a principle, everyone agrees that the “human in the loop” is critically important. However, as a set of design decisions — determining at which specific points in a workflow human judgment required, how does the interface prompt it, and who is accountable when it doesn’t happen — most firms haven’t worked that out. That kind of imprecision is where audit risk can accumulate quietly.

Where AI is genuinely earning its place

None of this is an argument against AI in audit, of course. Document extraction, first-draft writing, data summarization are all areas in which AI is delivering real value, and the gains aren’t marginal. Contracts that once took days to review can be turned around in hours. Workpaper summaries and client communications that traditionally consumed senior staff time are now being handled in the first-draft stage by tools that do it well. Those hours are going back to partners and managers, and their work is better for it.

The honest picture of AI in audit is not the hype version — transformational overnight, replacing roles, reshaping everything at once. Instead, it’s more incremental than that, more uneven, and more dependent on organizational decisions than technology ones. The audit firms making the most of it aren’t the ones that moved fastest; rather, they’re the ones that were clearest about what they were trying to solve, built governance structures that could handle the friction, and invested in the human judgment that AI can support but cannot replace.

That clarity — about what AI is good for, what it isn’t, and what it requires of the people using it — is where the real work is.

You can find more about the challenges facing audit service professionals here

Key takeaways:

• • • The 2027 end date is not a runway — The One Big Beautiful Bill sets a statutory de minimis end date of July 1, 2027, but its own legislative history explicitly preserves the president’s authority to restrict it before that date. Sellers banking on a two-year transition period are reading the headline, not the fine print.

    • The Supreme Court win didn’t save the refunds — The Supreme Court’s IEEPA decision was real, but the administration switched legal authority to Section 1321 and kept the suspension running. Combined with congressional cover from the One Big Beautiful Bill, the path to recovering tariffs already paid is genuinely uncertain — not just delayed.

    • The refund clock just reset — The lead test case for processing refunds through CBP’s KAPE system, Atmos, just settled, forcing the process to restart with a new test case. Sellers waiting on refunds are further back in the queue than they realize.

Most e-commerce merchants couldn’t have told you what de minimis meant two years ago — mostly because they didn’t need to. It was the invisible infrastructure of cross-border trade, the threshold below which imported goods pass through customs without duties or taxes. And in the United States, that threshold sat at $800. For small online sellers sourcing internationally, it wasn’t a technicality — it was their business model. Now, that model is over.

De minimis was deliberate trade policy built on simple logic: the cost of collecting duties on a $25 phone case exceeds the revenue it generates. Let low-value goods flow freely, the thinking went, and e-commerce would grow — and it did.

The Trump administration’s first moves targeted Canada, Mexico, and China on fentanyl-related grounds. Then came Executive Order 14324, suspending duty-free de minimis for all countries effective August 29, 2025. Sellers who had never filed a customs entry suddenly had to file informal entries for goods valued up to $2,500 — and pay tariffs on every single one. Last count, that has meant $175 billion in tariffs paid annually, with small shipments accounting for roughly 63% of that.

The legal basis for Trump’s tariffs — the International Emergency Economic Powers Act (IEEPA) — went to the Supreme Court, which constrained presidential authority to pass these tariffs. Many sellers took that as a signal that tariff refunds were coming — they shouldn’t have.

Then came the legislative layer that changed everything. The One Big Beautiful Bill Act (OBBBA) — H.R. 1, now law — codifies the end of de minimis under Title 19 with a statutory end date of July 1, 2027. Buried in the legislative history, however, is language explicitly stating that nothing in the bill limits the president’s existing authority to restrict de minimis before that date. The current suspension has congressional cover, meaning that any court challenge faces a much tighter call than it would have had a year ago.

What most sellers are getting wrong

What’s making matters worse, however, is that many small e-commerce merchants may not fully understand all the nuances of the laws and regulations they are trying to navigate. Indeed, there are certain aspects of the situation that many are getting wrong, including:

The 2027 date is a headline, not a lifeline — When the ne Big Beautiful Bill passed with a July 1, 2027, , many sellers assumed they had a transition period — time to adjust pricing, renegotiate supplier terms, and build a compliance infrastructure. Buried in House Report 119-106, however, is language explicitly stating that nothing in the bill limits the president’s existing authority to restrict de minimis before that date. Congress didn’t create breathing room; rather, it codified the end while leaving the accelerator fully intact. The 2027 date is when de minimis ends by law. Indeed, it could end sooner — and effectively already has.

The Supreme Court decision didn’t unlock refunds — The Court’s IEEPA ruling was significant, but the administration’s response was swift: reimposed the suspension of tariffs under Section 1321 authority as of February 24. The tariff meter never stopped; and now, with the OBBBA’s legislative history providing congressional cover, the — which specifically addresses whether sellers are entitled to refunds in the de minimis context — faces a much harder statutory construction argument than it would have a year ago. This may mean that the Supreme Court win was a legal victory that may not translate into money back.

The refund process just lost its test case — For sellers hoping to recover duties paid, the most practical path was through the KAPE system run by the U.S. Customs and Border Protection (CBP) — a workaround allowing refund claims to feed directly into anĚýĚýfor verification. The lead case proving out that process, , just settled. Now, the trade legal community has to start over with a new test case, and nobody knows how long that is going to take. Sellers who filed protests rather than complaints at the Court of International Trade (CIT) are in a particularly difficult position — protests have time limits, and the CBP is under court order to re-liquidate open ones. Which legal bucket your entries fall into matters enormously right now.

The bottom line

The de minimis era enabled a generation of small merchants to compete globally on terms that would have been unimaginable 20 years ago. Its sunset doesn’t mean the end of cross-border e-commerce — but it does mean the end of operating on assumptions. The 2027 date, the Supreme Court decision, the refund process — each looked like relief and turned out to be more complicated than the headline suggested.

E-commerce merchants impacted by these de minimis developments need to talk to a trade attorney — not for the basics, but to understand where your claims stand, whether your protest strategy is still viable, and what the Atmus settlement means for you.

The storm isn’t over — and it may be more complicated than most sellers have been told.

For more on this, please tune into the Thomson Reuters Institute’s recent “Clarity” podcast, featuring , about the challenges facing small e-commerce merchants today

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, Ěýwhich 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 takeaways:

• • • Your post-OBBBA forecasts should look different — If the tax department doesn’t own the OBBBA model, someone else will own the OBBBA story.

• • • Rely on your department’s inner strengths — It’s governance and analysis — not tools — that get you into the strategy room.

    • Factor in the conflict in the Middle East — The Iran war risk belongs in your tax model, not just in your CFO’s macro deck.

The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, enacted large business tax cuts, most notably by providing permanent full expensing of many forms of investment. Under the previous major corporate tax legislation, 2017’s Tax Cuts and Jobs Act (TCJA), bonus depreciation was scheduled for gradual phase-out following 2023. The OBBBA restored that expensing 100% retroactively for assets acquired from mid-January 2025 onwards.

The after-tax cost of new machinery, fleets, and equipment has effectively fallen by around 21%, designed to encourage immediate capital outlays by allowing businesses to write off these expenses in the year they are incurred rather than amortizing them over five years.

For corporate tax departments, that’s not a disclosure footnote — that’s your capital plan.

Capital-intensive corporations will see tax burdens reduced through permanent rate extensions, depreciation adjustments, and expansion of the state and local tax (SALT) deduction cap — but only if your models are built to capture the timing and location of investment, the mix of debt compared to equity, and where your organization books its next dollar of income.

Not surprisingly, most corporate tax departments aren’t there yet. They’re still recalculating last year, plus a few adjustments. That’s glorified compliance, not modeling.

A standout tax department doesn’t ask, What’s the OBBBA impact? Rather, it asks, Which version of OBBBA do we choose for this business? — and it has the models to back it up.

From spreadsheet heroics to controlled modeling

For many organizations, tax modeling still means creating a massive spreadsheet that only one director truly understands. The spreadsheet gets pulled out for budget season, rebuilt under pressure, and quietly retired until next year. That’s a single point of failure, not a process.

And after OBBBA, continuing that practice is dangerous. One wrong assumption on expensing or interest limitation can move cash tax by millions of dollars and blindside the Finance Department.

Here’s what disciplined modeling looks like in practice:

• • • Create a unified model — Build one integrated model that the whole team can use or accept that your department is choosing to fly blind.
    • Use the same assumptions — Standardize the levers that matter most (such as capex timing, financing mix, jurisdiction, and incentives) and make sure every scenario runs off the same assumptions.
    • Conduct modeling reviews — Treat major OBBBA-driven decisions (such as large capex, funding shifts, supply-chain redesign) as tax deals that must go through a modeling review before they’re greenlit.
    • Document your assumptions explicitly — Under permanent full expensing, the difference between a well-supported assumption and a poorly documented one isn’t just an audit risk, rather it’s a credibility problem with your CFO.

It’s also important to remember that in a post-OBBBA world, this level of disciplined modeling is not technology transformation — it’s basic survival.

Governance: Where leaders quietly win or loudly fail

The differentiator isn’t which corporate tax department has the fanciest tool — it’s which one has the cleanest governance. And the data is unambiguous: More than half (55%) of tax departments are still in the reactive phase of their technological development, stuck with five capex models circulating with five discount rates and the tax team arriving late to the planning meeting.

Those tax departments that are breaking out of that pattern share one trait: They put someone formally in charge. In the Thomson Reuters Institute’s recent 2026 Corporate Tax Department Technology Report, a large portion (88%) of survey respondents said their company had appointed a person to lead the tax department’s technology strategy. That number jumped a whopping 37 percentage points, from 51%, from the previous year’s survey. That single structural move separates those departments with a governance model from those that simply hold a governance conversation every budget cycle and forget about it.

Clearly, this type of ownership drives results. Two-thirds of those surveyed agreed that their company’s investment in technology has enabled a shift from routine, reactive work to more strategic, proactive, higher-value work.

Under OBBBA, the kind of governance isn’t housekeeping. It’s how you get invited into strategy discussions instead of having to clean up after things go awry.

Why your OBBBA win may not feel like a win

On paper, the tax changes embedded in the OBBBA look generous. In practice, your effective tax benefit is colliding with something you don’t control.

When the war on Iran began, all shipping through the Strait of Hormuz was effectively halted, removing roughly one-fifth of the world’s oil and gas supply from the market. Fuel prices throughout the world spiked and are likely to remain elevated as long as conflict persists.

With oil prices hovering around $100 a barrel, there are will wipe out the benefits of higher tax refunds this year for most Americans. If those benefits, arising from Trump’s 2025 tax cuts, are erased for the average American, only the top 30% of taxpayers will still seeing a net gain.

For corporate planning purposes, the parallel dynamic is real: The topline OBBBA benefit is being eroded by higher fuel, freight, and financing costs across the business and its supply chain.

Inflationary pressures are being driven by higher energy prices tied to the Iran war, and the conflict’s impact on a wide range of goods and services is likely to last for months — with experts saying even a ceasefire is unlikely to immediately ease global energy shortages.

A serious corporate tax department doesn’t handwave these concerns away. It takes three actions:

1. 1. 1. Run a war-extended scenario — The scenario should show exactly how sustained higher energy costs and borrowing rates change the payoff from accelerated expensing and leverage — with specific numbers, not just directional commentary.
      2. Share your forecasts internally — Put your monthly or quarterly cash-tax forecasts on the table for Finance to see, so that it can manage liquidity rather than hope the annual plan holds.
      3. Force the hard conversation — Ask the tough question: At today’s rates and fuel costs, the after-tax return on this project is X. Are we still in? That question should come from the tax team now, not from the finance team six months later.

Clearly, the daily fluctuations in oil prices matter less than monthly and quarterly averages — and volatility will likely remain elevated given the absence of a clear timeline for the end of the war. That’s exactly the kind of sustained uncertainty that belongs front and center in your scenario set, not in a footnote.

The bottom line

The OBBBA gives corporate tax departments a genuine opportunity to move from being simply a compliance function to becoming more of a strategic advisor. Permanent full expensing, richer cost recovery, and more flexible interest rules can create real levers to add value, but only for those organizations that model them rigorously, govern them cleanly, and stress-test them against the macro environment their business actually faces today.

Indeed, the Iran war is a live test of that readiness. The corporate tax departments that show up with modeled scenarios, cash-tax forecasts, and a clear point of view on after-tax returns will earn a seat at the strategy table. The ones that show up with caveats will be asked to leave it.

You can download a full copy of the Thomson Reuters Institute’s recent 2026 Corporate Tax Department Technology Report here

• • • Changing the balance of taxes — Budget‑driven tax swaps and incentive reforms are changing the balance between income, property, and sales taxes, forcing large companies to revisit their multistate footprint.

    • How revenue is sourced is changing, too — Rapidly evolving digital and AI‑related taxes are creating new nexus, sourcing, and base‑definition issues for businesses that rely on revenue from digital advertising, social platforms, data monetization, and automated tools.

    • Planning amid continued uncertainty — New federal tax regulations, tariff‑related uncertainty, and even the elimination of the penny are all amplifying state‑by‑state complexity for in‑house tax departments.

WASHINGTON, DC — Tax industry experts who gathered at to provide updates on the current landscape of state and local tax (SALT) policy and offer insight that corporate tax departments should consider found, not surprisingly, that they had a lot to talk about in the current economic environment.

Mapping the new SALT frontier

For starters, this year’s SALT agenda is not just an abstract policy story for large, multistate businesses, rather, it’s a direct driver of cash taxes, effective tax rate (ETR) volatility, and audit exposure. Indeed, several state legislatures are advancing new taxes on digital advertising and data, revisiting incentives and data center exemptions, and using conformity to federal law — especially the tax provisions in the One Big Beautiful Bill Act (OBBBA) — as a policy lever, all against the backdrop of slowing revenues and contentious elections.

“Tax swaps” and incentives — States that are facing budget pressure are, unsurprisingly, looking at tax swaps to reduce income or property taxes while broadening the sales & use tax base and trimming exemptions. For example, on March 3, the state of Florida — which already doesn’t have a state income tax — passed legislation that in the state.

Moreover, with the rapid expansion of AI come the extensive need for data centers. Several states are reassessing data center exemptions and credits, either tightening qualification standards, requiring centers to supply more of their own power, or repealing incentives outright. A decision in Virginia to , for example, is viewed as a potential template for other states, particularly in those areas in which energy and environmental concerns are priorities. At the same time, proposals targeting include expanded corporate tax disclosures, CEO compensation surcharges, and enhanced reporting on apportionment and group filing methods.

What companies should consider — Large companies operating over multiple states should consider making an inventory of their credits and incentives by jurisdiction, including looking at sunset dates and political risk indicators.

Companies should also build forward‑looking models that show how any sales tax base expansion would interact with their supply chain and their procurement of digital and professional services.

New exposure for tech, marketing & data

Bipartisan legislators in several states are continuing to expand on digital economies as a revenue and policy target. For example, Maryland continues to lead with its digital advertising tax; while Washington state’s expansion of its sales tax to include certain digital and IT services and Chicago’s social media taxes illustrate the variety of approaches that state and local jurisdictions are exploring to expand their tax base and raise revenue.

Data and “digital resource” taxes — Proposals in states such as New York would tax companies that derive income from resident data, treating data as a natural resource. While no state has fully implemented a comprehensive data tax, however, large platforms and data‑driven enterprises are monitoring these bills closely.

AI‑related SALT rules — Many states still classify AI solutions under existing Software as a Service (SaaS) or data‑processing categories, but some — including New York — are exploring surcharges tied to AI‑driven workforce reductions. And at least two states are explicitly taxing AI, similarly to the way software is taxed.

For corporate tax leaders, some practical next steps should include mapping those areas in which your group has digital ad spending, user bases, data monetization, or AI deployments. Then, overlaying that with current and pending digital tax proposals. In parallel, it is increasingly critical for the tax team to partner with IT and marketing teams to understand how contracts, invoicing structures, and platform design will affect nexus, tax base definition, and sourcing.

Federal shifts magnify multistate complexity

The OBBBA made permanent several of , while expanding SALT relief on the individual side and creating new interactions for multinational groups. Because most states start from federal taxable income — either on a rolling, static, or selective conformity basis — OBBBA changes reverberate across state corporate income tax bases, especially in those states that have decoupled themselves from interest limits, R&D expensing, or new production‑related incentives.

Corporate tax departments must now juggle different conformity dates and selective decoupling rules across rolling and static states, including jurisdictions that automatically decouple when a federal change exceeds a revenue impact threshold. This requires more granular state‑by‑state modeling of OBBBA impacts on apportionable income, deferred tax balances, and cash tax forecasts. It also heightens the risk that political disputes — such as — produce mid‑cycle changes that complicate provision and compliance processes.

Penny elimination — With federal , states now are moving toward symmetrical rounding for cash transactions, rounding the final tax‑inclusive total to the nearest five cents while attempting not to alter the underlying tax computation. For retailers and consumer‑facing enterprises, this shifts the focus to point of sale (POS) configuration, consumer‑protection exposure, and class‑action risk if rounding is implemented incorrectly.

Tariffs and refunds — The U.S. Supreme Court’s Learning Resources, Inc. v. Trump decision under the International Emergency Economic Powers Act in February leaves open how more than $100 billion in and what that means for prior sales & use tax treatment. Streamlined guidance generally treats tariffs embedded in product prices as part of the taxable sales price but excludes tariffs paid directly by a consumer‑importer from the tax base, raising complex questions if tariff refunds reduce costs or sales prices retroactively.

For indirect tax department teams, the confluency of the 2026 SALT changes — including the impacts around everything from data center credits to the recent Supreme Court tariff decision — the need to rely on internal partners across the business has never been stronger. Combining that with a greater reliance on technologies, including dedicated research tools to stay abreast of state-by-state tax changes, may be the best way for corporate tax teams to keep up with compliance requirements and avoid penalties.

You can download a full copy of here