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The Profession
Professional Accounting Coalition Opposes Draft Regulation Excluding Accounting from Professional Degree Designation [INSIDE Public Accounting]
American Institute of CPAs (AICPA), along with eight other professional accounting organizations representing approximately 1.5 million accounting and finance professionals, has sent a letter to the U.S. Department of Education opposing a draft regulation that would exclude accounting programs from a professional degree designation.
Audit
Pentagon fails eighth audit, targets 2028 to pass, Pentagon says [Reuters]
For the eighth year in a row, the Pentagon has failed as annual audit, the Department of Defense said on Friday, continuing a pattern of financial accountability problems that have drawn bipartisan criticism and emerged as a campaign issue. “The Department cannot resolve decades of war, neglect of America’s defense industrial base, and soaring national debt through unchecked spending.” Secretary of Defense Pete Hegseth said in a statement released with the audit.
PCAOB to Cut Chair’s Pay by More Than Half Amid SEC Pressure [Wall Street Journal]
The salary of the Public Company Accounting Oversight Board’s chair would fall 52% while other board members would see a 42% drop under the auditing watchdog’s budget plan for next year, following greater scrutiny of pay from the Securities and Exchange Commission. The PCAOB on Friday voted unanimously to approve its 2026 budget, which will now head to the SEC for a final signoff.
Reps. Contend OCC Let College Dropout Perform Utility Audits, Challenge Another $1.5B of Customer Charges with Supreme Court [State of Oklahoma House of Representatives]
An employee of the Oklahoma Corporation Commission (OCC) who is believed to have dropped out of college as a sophomore has been performing audits of utility companies collectively worth more than a billion dollars, a brief filed Thursday at the Oklahoma Supreme Court reveals. Reps. Tom Gann, R-Inola, Kevin West, R-Moore, and Rick West, R-Heavener, are challenging OCC orders approving some $1.5 billion of 2023 fuel and purchased power costs incurred by monopoly public utilities ONG, OG&E and PSO. Their brief asks the Court to overturn the OCC’s approval orders and require new, lawful fuel audits and prudence reviews by outside, independent auditors and experts, instead of the OCC’s Public Utility Division (PUD) staff.
Consulting
McKinsey Plots Thousands of Job Cuts in Slowdown for Consulting Industry [Bloomberg]
As McKinsey & Co. partners gathered in the consulting giant’s birthplace in late October, Bob Sternfels delivered a rallying cry. “We will kick some ass as we start our second century,” the firm’s top executive told the thousands of attendees. But away from the 100-year festivities in Chicago, McKinsey bosses have been conveying a more pragmatic message: It’s time to get leaner. The firm’s leadership has discussed with managers in non-client-facing departments the need to cut about 10% of headcount across their business, according to people with knowledge of the matter. That could amount to a few thousand job cuts that McKinsey would stagger over the next 18 to 24 months, the people said, asking not to be identified because the details are private.
From McKinsey to PwC, here’s how elite consulting firms are racing to hire engineers — and train everyone else in AI [Business Insider]
As firms shift from slide decks and advisory work to multi-year AI-driven transformation projects, the profile of the ideal consultant at firms like Boston Consulting Group, McKinsey, and PwC is changing. “Going to a client and purely proposing an army of consultants doesn’t really work anymore,” Gert De Geyter, a former AI lead at Deloitte US, told Business Insider.
Law & Order
Senators Press FBI Over Failure to Investigate Epstein’s Lawyer and Accountant [Wall Street Journal]
A group of Democratic senators is asking the Justice Department to explain why federal law enforcement never interviewed Jeffrey Epstein’s longtime lawyer or in-house accountant when they investigated his sex-trafficking scheme. Attorney Darren Indyke and accountant Richard Kahn were officers of Epstein entities that obscured transactions, arranged cash for Epstein, made payments to women and facilitated marriages between women that turned out to be shams, The Wall Street Journal recently reported.
Education
Major Gift Establishes Endowed Accounting Professorship at UW [University of Wyoming]
A gift from Scott and Anne Macdonald to the University of Wyoming establishes the Macdonald Professorship in Accounting, an endowed professorship that supports faculty excellence in the Department of Accounting and Finance. “I have always valued my education at UW and the foundation it gave me to have a successful career,” says Scott Macdonald, a telecommunications executive. “Accounting is the science of business, and now, more than ever, it is important to develop the next generation of accounting professionals to help lead our country here in the 21st century. Anne and I hope this professorship will contribute to that goal.”
Tax
Thomas Foods family sues EY, Hood Sweeney for $50m over tax bungle [The Advertiser]
One of Australia’s richest families has launched explosive legal action seeking close to $50m in damages from two major accounting firms over their role in a tax bungle that’s left the family facing a multimillion-dollar tax bill. Adelaide’s Thomas family, behind the $4bn Thomas Foods International meat empire, and corporate entities it controls, accuse global accounting giant EY and Adelaide-based firm Hood Sweeney of serious failures in the administration of several family trusts that triggered tax penalties of more than $13m. The family is contesting the ATO penalties in the federal court, but in the meantime is seeking damages of $25m from EY and $22m from Hood Sweeney.
Tax the Rich, Like Me [New York Times]
Mitt Romney writes for the NYT opinion pages:
Typically, Democrats insist on higher taxes, and Republicans insist on lower spending. But given the magnitude of our national debt as well as the proximity of the cliff, both are necessary. DOGE took a slash-and-burn approach to budget cutting and failed spectacularly. Europe demonstrates that exorbitant taxes without spending restraint crushes economic vitality and thus speeds how fast the cliff arrives. On the spending-cut front, only entitlement reform would make a meaningful difference, since programs such as Social Security and Medicare represent the majority of government outlays. No one countenances cutting benefits for current or near retirees. But Social Security and Medicare benefits for future retirees should be means-tested — need-based, that is to say — and the starting age for entitlement payments should be linked to American life expectancy. And on the tax front, it’s time for rich people like me to pay more.
States Can Create or Expand Refundable Credits by Taxing Wealth, Addressing Federal Conformity [Institute on Taxation and Economic Policy]
State budgets are getting tighter and will become increasingly strained by changes from federal tax and spending cuts. But that shouldn’t stop the progress on refundable credits. States can find new revenue that supports these and other spending priorities by disconnecting from parts of the new Trump tax law or by taxing wealth. Both the District of Columbia and Pennsylvania recently “decoupled” from key provisions of the Trump tax law while also creating and expanding refundable credits. D.C. will disconnect from 13 parts of the tax law, raising almost $600 million in revenue over the next four years. With this extra cash, the District will fund a new CTC of up to $1,000 per child and raise its existing EITC to 100 percent of the federal credit.
Tax Alert: Executive Action on Marijuana Scheduling and the Potential Sunset of IRC Section 280E [Current Federal Tax Developments]
A significant development in federal drug policy occurred on December 18, 2025, with the issuance of a new Executive Order prioritizing the rescheduling of marijuana. For CPAs with clients in the state-legal cannabis sector, this action signals a potential and expeditious end to the onerous tax burdens imposed by Internal Revenue Code (IRC) Section 280E. This article details the new Executive Order, reviews the proposed rule it addresses, and analyzes the technical tax implications regarding Schedule I status and the deductibility of business expenses.
Trump economist predicts ‘biggest refund cycle ever,’ massive checks ahead [FOX Business]
Practitioners, what say you?
A leading contender to become President Trump’s next Federal Reserve chair said the administration expects larger tax refunds and higher take-home pay next year, as many Americans continue to express concerns about affordability. “We are going to see the biggest refund cycle ever in the history of America, and people are going to get massive refund checks,” National Economic Council Director Kevin Hassett said in an interview on FOX Business’ “Varney & Co.” on Thursday. “We’re expecting just that part of it alone to be worth a couple-thousand-dollar refund … the numbers are striking.”
State Taxation of Data Centers [Tax Foundation]
This paper examines how states competing for data centers approach these different tax choices and how tax policy influences data center investment. It outlines the proper tax treatment of the industry, then offers a 12-state comparison of state and local data center taxation.
