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Tax
IRS warns taxpayers: Social media advice can lead to costly penalties [Journal of Accountancy]
Since 2022, the IRS has seen a surge in questionable refund claims, singling out the fuel tax credit and the sick and family leave credit as ones that attract fraudulent claims. It has imposed over 32,000 penalties, totaling $162 million, James Clifford, IRS director of Return Integrity and Compliance Services, said in a news release. “These schemes are not only misleading but can cost taxpayers dearly,” Clifford said. Taxpayers face the possibility of rejected claims and a penalty of up to $5,000 for filing a frivolous return under Sec. 6702, plus other possible penalties, the IRS said.
Companies Face Tariff-Induced Transfer Pricing Audit Risks [Bloomberg Tax]
President Donald Trump’s widespread tariffs are boosting tax dispute risks for companies that are scrambling to understand how to factor the new trade duties into their transfer pricing and tax planning without attracting an audit.
Talent
EXCLUSIVE: Accountancy firm Deloitte plans Aberdeen job cuts [The Press and Journal]
Staff were briefed earlier this week and have now entered a period of consultation. The Big Four accounting firm employs nearly 150 people in Aberdeen. It is understood that Deloitte is carrying out a review of its UK internal services teams.
MAP Survey finds CPA firm starting pay on the rise [Journal of Accountancy]
The 2025 National Management of an Accounting Practice (MAP) Survey found that new hires with master’s degrees saw starting salaries increase roughly 17% to a median $67,750 from the previous survey in 2023. Salaries for those with bachelor’s degrees rose 11% to $60,834.
State and Local
Infighting led to financial issues at this Pierce County city, state audit shows [The News Tribune (Washington)]
An accountability audit published Tuesday found “significant concerns” in the oversight and monitoring of the city of Roy’s finances from 2021 to 2024, a result in part of infighting among the city’s elected officials. According to the Washington state audit, “bank reconciliations were not performed consistently and timely, if at all,” and financial reports provided at council meetings and to state auditors “were inaccurate and not adequately supported by accounting records.”
SHA ‘knowingly charged’ $360 million in unauthorized expenses to federal projects [Maryland Matters]
A troubling audit of State Highway Administration finances could draw the scrutiny of a legislative oversight panel in Annapolis later this year, lawmakers said Thursday. State Highway Administration officials “knowingly charged” nearly $360 million in unauthorized expenses to federal fund projects in an attempt to hide a deficit in the state’s Transportation Trust Fund, according to a report released Thursday by the Office of Legislative Audits. The audit looked at the period between Nov. 1, 2020, and Oct. 31, 2024, based on a complaint to the office’s fraud, waste and abuse hotline reporting a recent “rapid increase in the federal funds receivable balance.”
Non-profit claims state hasn’t paid $3.4 million after audit questioned spending habits [KOMO News]
A Seattle non-profit organization says it has been evicted from its office and laid off employees after a state audit questioned how it was spending taxpayer dollars. “That’s not accountability. That’s punishment, and it’s punitive,” said Sharonne Navas of the Equity in Education Center on Thursday, as she argued her case in an interview. Navas said the state hasn’t reimbursed her organization for expenses since January, and after a State Auditor’s investigation raised questions about how she and her colleagues were spending grant money. According to Navas, she is owed $3.4 million as part of the Digital Navigators program.
Audit
Why Can’t the Pentagon Pass An Audit? [Taxpayers for Common Sense]
The Pentagon’s accounting records are so convoluted that billions of dollars cannot be accounted for, charges a new government report.
Study finds blind spot for some auditors who use tech-based fraud tests [Phys.org]
A new study finds that auditors of financial statements are less likely to follow up on “red flags” identified by data analytics if the auditors did not play a role in developing the relevant analytical tests. The researchers also identified a low-cost intervention that significantly improves auditor performance when using auditing tools they did not help develop. The paper, “Inheriting versus Developing Data Analytic Tests and Auditors’ Professional Skepticism,” is published in the Journal of Accounting Research.
U.K. delays audit reforms even as regulator piles on financial pressure [Compliance Week]
Further delays to the U.K.’s long-promised Audit Reform and Corporate Governance Bill and the creation of a new regulator, known as the ARGA, have triggered a slew of criticisms and calls for a timetable for reform. On Sept 8, 66 MPs from across all political parties sent a letter to the Prime Minister, coordinated by the Chartered Institute of Internal Auditors, calling for reforms to be brought back onto the Parliamentary agenda. They said the “case for reform is now more pressing than ever.”
