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CFO Brew

Kristen Talman

cfobrew.com

CFOs have known about the R&D tax since 2017

Finance chiefs are continuing to push for a change in the tax provisions that they’ve known about since 2017.

CFOs still pushing to reverse tax provision

Leonard Robinson

Are your company's leases up to FASB's new standard?

If your company signed a lease in 2022, here’s what you should know.

a table with tax documents a calculator and business people's hands

The US unveiling the IRA has set the nation closer in line with OECD regulations, much to tax professionals’ relief.

Tax professionals begin forecasting 15% minimum tax

Person standing on a stack of papers holding a chart up to a clipboard with other charts on it and a person holding a pen to the paper

Accounting and Taxes

Jesse Klein

Say goodbye to the one piece of government mail we actually like getting.

The IRS is officially ending the use of paper checks for tax refunds this week. It’s the first step of an executive order signed in March by President Trump to broadly transition the department to exclusive use of electronic payments.

The change applies to all taxpayers but will only impact a minority. According to a Sept. 23 news release from the IRS, 93% of individuals already receive their tax refunds via direct deposit.

The IRS cited speed, costs, and decreased risk of theft as key factors for the switch. The announcement from the IRS stated that paper checks are 16 times more likely to be “lost, stolen, altered, or delayed.” It also noted that the electronic refunds are usually delivered to taxpayers within 21 days, versus the six weeks or longer that it takes to receive a check by mail. It should also be cheaper.

The IRS recommends unbanked taxpayers explore options such as prepaid debit cards and digital wallets in advance of filing season, noting that those without access to digital payment platforms “may be eligible for Treasury-sponsored alternatives that ensure reliable electronic delivery.” As of right now, 2026 taxes should continue to be filed using existing forms and processes.

IRS to phase out paper checks for refunds 

The IRS enters the 21st century with direct deposits for all.

Courtney Vien

The IRS has a little more egg on its face. (By now it’s a 

 hundreds of audit staff who accepted deferred resignation offers, the Federal News Network reported. In an email to IRS employees, its HR heads stated that staff cuts had “created a potential gap in mission-critical expertise” and that the agency would take steps to solve that problem, “including details, reassignments, DRP/TDRP [Deferred Resignation Program and Treasury Deferred Resignation Program] rescissions, [and] external hiring.”

An IRS employee told FNN that management said during a town hall that the agency had “let too many people go” and that it wanted to “bring back 400 revenue agents and 300 revenue officers who accepted the DRP.” The employee said the IRS planned on “DRP rescissions,” meaning it would contact staff who took DRP offers and ask them to reconsider.

But even bringing back 700 people would be a drop in the bucket. The IRS lost 

of its revenue agents, who conduct audits, and more than 600 of its revenue officers, who handle collections, as of this March, a 

. It’s likely that more audit staff have left since then: The IRS’s workforce will 

 when all the reductions in force are completed, according to the National Taxpayer Advocate.

This isn’t the first time the IRS has tried to walk back the staff cuts. Earlier this month, it 

 for around 4,500 customer service representatives. About 9,000 employees have left or resigned from its taxpayer service division, which includes customer service, this year.

IRS to RIF’d staff: We goofed

The agency is looking to rehire hundreds of audit staff who took deferred resignation offers.

Update: On August 8, multiple sources reported that President Trump removed Billy Long as IRS commissioner.

It’s okay, Billy, we’ve all gotten confused about due dates at a new job before.

 that it hasn’t set an opening date for next year’s filing season. This comes after new IRS Commissioner Billy Long told an audience at the Tax Summit of the National Association of Enrolled Agents in Salt Lake City in July that he pushed for an earlier tax filing start date “around Presidents Day,” but that IRS staff wanted more time. So, we guess it’s a case of “he said, but they didn’t?”

His heart might have been in the right place, even if he did put his foot in his mouth. In 2026, the IRS will probably need extra time to prepare for filing season because staffing will be at the 

 since 2019, and Republicans have cut its budget by almost 40%. In 2026, Presidents Day falls on February 16, marking a later start date than in recent years, which have typically begun in late January or early February, the Journal of Accountancy reported.

 with tax policy, or inside any government tax department. Instead, he made his name as an auctioneer, in real estate, and as an AM radio host in Missouri, before becoming a congressman in 2011.

 with the tax code involved trying to eliminate it entirely and replace it with a flat tax system. He is not an accountant or CPA, but has dabbled in 

Don’t be fooled by the head of the IRS—there’s no start date for tax filing season yet

Commissioner Long jumped the gun on announcing filing kickoff, prompting clarification from the IRS.

After convincing some 9,000 employees in the IRS’s taxpayer service division to resign this year, the federal government has realized that, um, maybe that wasn’t the best idea.

 for around 4,500 IRS contact (aka customer service) representatives, according to the Federal News Network (FNN). Those are the employees in the agency’s Taxpayer Service division who answer phone calls, reply to mail, and work with taxpayers who visit its in-person service centers.

The agency had one of the smoothest “filing seasons 

” this year, National Taxpayer Advocate Erin M. Collins wrote in her midyear report to Congress. It processed upward of 98% of individual tax returns and improved the Level of Service on its phone lines from 63% in 2024 to 87%. Last year’s filing season was 

, thanks in part to Biden-era IRA funding that allowed the IRS to hire around 2,000 customer service representatives (CSRs) in 2023. In 2024, it answered 9 million more phone calls than in 2022, and cut wait times in half.

 of its workforce once this year’s reductions in force are in full effect. More than 9,000 of the departing employees are from the Taxpayer Services division, which will shrink by around 22%.

, the IRS said it would need to employ around 11,000 CSRs to maintain its current level of service. Collins recommended that the agency hire more “essential filing season employees,” including CSRs and tax processors, by the end of this summer, so that they could be trained in time for next tax season.

The IRS seems to be looking to reduce at least some of that training time: Around three-quarters of the new job postings are open only to current or former IRS or federal employees, while around a quarter are open to the general public, FNN reported.

“The IRS is using its direct hire authority,” FNN said, which will allow it to hire in 40–45 days, versus the 101 days it typically averages to hire a federal employee.

Whether former IRS staff will want the newly opened positions remains to be seen. Morale at the agency is said to be low, and many of the new gigs are listed as “seasonal.”

Technically, the IRS is under an indefinite hiring freeze due to a Trump 

, but the freeze can be thawed if the Secretary of the Treasury, working with the Director of OMB and the Administrator of USDS, decide it’s in the “national interest” to do so. (Maybe Scott Bessent got tired of the IRS’s hold music?)

The IRS is…hiring?

After getting 9,000 taxpayer services employees to resign, IRS looks to hire 4,500.

Tax filing season 2025, against all expectations, went 

. Despite the fact that the IRS had been roiled by successive rounds of 

, and that its leadership resembled a game of 

, spring ’25 still brought “one of the most successful filing seasons in recent memory,” according to National Taxpayer Advocate Erin M. Collins.

But the relative efficiency of this year’s tax season could mask trouble on the horizon. The IRS will experience a 26% reduction in headcount this year, with around 26,000 of its more than 102,000 employees leaving or intending to do so. But many departing employees took deferred resignation agreements which don’t require them to leave until September 30—meaning that, throughout tax season, the IRS hadn’t yet felt the full impact of the job cuts.

In fact, taxpayer services employees, around 9,000 of whom are resigning, weren’t allowed to leave until June 30. Other staff who accepted the first round of deferred resignation agreements were classified “essential” and had to stay until May 15.

In years to come, spring 2025 may well be remembered as the calm before the storm.

The staff and budget cuts the IRS faces will undo the progress it was able to make with funding from the Inflation Reduction Act (IRA). And even the IRA money was largely a stopgap for an agency that’s seen its resources cut time and time again.

To understand the impact of the 2025 job cuts, it’s helpful to look back—way back, to before MTV even aired its 

The 2025 reduction in force will take the IRS down to around 76,000 employees, or close to 

. That doesn’t sound too bad, until you consider that, in 2016, the IRS employed 11,000 

And naturally, the IRS’s job has only gotten bigger since the heyday of the Buggles. For reference, in 1980, with a staff of 87,46, the IRS collected $5.2 billion (that’s “billion” with a “b”) in revenue, compared with $5.1 

The 2025 cuts also come on the heels of a turbulent fifteen years for the agency. Throughout much of the 2010s, Congress 

 the IRS’s funding, lowering its budget from $14b in 2010 to $12b in 2017. A hiring freeze was in place from 2011 to 2018.

“We lost a whole generation,” former IRS Commissioner Chuck Rettig said during a speech at the AICPA’s 2025 Engage conference.

Then, Covid hit. During the pandemic, the IRS 

, and initially, remote work capabilities were limited. The agency halted mail processing between March and July 2020, and tax returns and other paper correspondence piled up. In 2021, it faced a backlog of more than 35 million tax returns that needed processing. The IRS struggled well into 2022, answering just 12.5% of calls, with wait times averaging 29 minutes.

The IRA threw the IRS a $78.9 billion life preserver. The funding “did not plug the hole, but it definitely started to right the ship,” Elena Patel, a senior fellow at the Urban-Brookings Tax Policy center and business professor at the University of Utah, told CFO Brew. The IRS used the funds to hire around 12,000 people, bringing its staffing levels northward of 100,000 for the first time since 1997.

. The agency answered 9 million more calls in 2024 than it did in 2022, more than doubling the percentage of calls it answered overall. It halved the time it took to respond to individual taxpayer correspondence. And it was finally able to work through the “mountain of paper returns and correspondence that piled up during the pandemic,” Collins wrote in a report to Congress.

That said, service levels still aren’t exactly stellar. In 2024, IRS employees still answered less than a third of individual taxpayer calls on its primary line, and only 55% of practitioner calls. Practitioners spent an average of 12 minutes on hold. Staff took an average of 110 days to complete a work cycle for a piece of individual correspondence, and spent an average of 147 days—nearly five months—on business correspondence.

And more budget cuts are coming. Congress began cutting the IRA funding, which was intended to last the IRS 10 years, in 2023. It has now rescinded $41.8 billion. The IRS is now also slated to lose 20% of its appropriated funding from Congress. That, atop the IRA cuts, will slash its budget by 37%, Collins wrote in a midyear 2025 report.

Morale among the remaining IRS employees is, as you can imagine, not great. Patel said she’s heard that “it’s kind of melee inside the IRS, because every day, employees are waiting to hear if ‘today’s the day I’m going to be RIF’d.’” Rettig, in his talk, stated that “there’s a tremendous amount of anxiety and stress in the hallways of the Internal Revenue Service.”

Tax and finance professionals should brace themselves for frustration when dealing with the IRS in the months and years to come. But they might also want to show IRS employees some grace, Rettig suggested. He called upon the accounting community to support the embattled agency, and to let IRS staff know that they’re appreciated.

“That goes a long way with people who have one eye on the door and a lot of stress,” he said.

The IRS rolls with the punches—for now

Job and budget cuts will soon do a number on service levels.

People and businesses in areas that have been hit by disasters will now have a longer grace period for paying their taxes, thanks to new legislation. 

, the Filing Relief for Natural Disasters Act, just 

, and is on its way to President Donald Trump to be signed, the Journal of Accountancy reported.

The act will allow the IRS to grant tax relief in places that states have officially declared disaster areas. Previously, the IRS was only permitted to give extensions to places that had been federally declared disaster areas. But the federal government can sometimes be slow to make an official disaster declaration.

As Judy Chu, a California representative and one of the co-sponsors of the bill, noted, “[F]or many disasters, federal declarations may come 

 after the state declaration, leaving open the question of whether the IRS will be able to give disaster victims timely filing relief.” Chu’s district was hit hard by the Eaton Fire this January. She described the law as “a common-sense, bipartisan solution to this problem that will give the IRS the authority to bypass bureaucratic delays and immediately extend tax filing deadlines after state-declared disasters and states of emergency.”

The legislation also expands some of the automatic extensions the IRS grants in the event of disasters, from 60 days to 120. Those extensions apply to federal tax deadlines for people injured or killed in a disaster; for certain relief workers; and for people whose residence, business, or tax records are located in a disaster area.

The act was first proposed in January and passed the House in April. It passed in the Senate unanimously.

Senate passes law giving disaster victims additional tax relief

It authorizes the IRS to grant extensions after states declare disasters.

Accounting once ran on a whole lot of dead trees.

Jim Bourke, a partner at accounting firm Withum who’s been with the firm since 1987, remembers those days. Before the cloud, if you asked your accountant for a copy of an old tax return, for instance, “it could be a couple of weeks by the time you get it,” he told CFO Brew.

Staff would need to get it out of the physical file room at the office, photocopy it, and either mail it to you or have you pick it up, he said. (And cross your fingers that no one shelved your paperwork in the wrong file.)

The advent of cloud-based accounting software changed all that. The cloud “was a revolution,” according to Bourke, who, as managing director of his firm’s advisory services branch, has helped many firms build out their tech stacks.

SaaS made it possible for accountants to work remotely, to hire and find clients from pretty much anywhere with internet access, and to provide clients with faster and more convenient service. But getting firms on the cloud hasn’t all been smooth sailing.

Cloud software for accounting first emerged in the late 1990s with the advent of NetLedger, the ancestor of NetSuite. By 2009, accounting software giants CCH, Intuit, and Thomson Reuters all had web-based tax preparation programs. But the first generation of cloud products was “very feature-thin,” Randy Johnston, a consultant with 40 years’ accounting software experience, told CFO Brew.

By 2012, cloud technology had advanced to the point where the profession took notice, in the form of the inaugural Digital CPA Conference, originally named the Digital CPA 

, which took place in October of that year. Around 2013 was when cloud products “started to get enough features that they could kind of work,” Johnston said. One of the pioneers of cloud accounting, he sat in the original design meetings for QuickBooks Online, NetSuite, and Sage Intacct.

But accounting firms were still wary. Convincing them to give up their onsite servers “was like taking their baby away,” Bourke, an early adopter and cloud evangelist, told us. One partner at a firm told him, “‘I want to be able to put my arms around the server,’” he recalled. Firms were concerned about data breaches, but they also feared change in general.

“They got so used to the way in which they did things. Most firms went to the cloud kicking and screaming.” he said.

The pandemic was what really spurred firms to join the cloud, Bourke noted. When firms weren’t able to get into their offices or visit clients on-site, they quickly saw the value of being able to access data remotely. “Everyone finally realized, ‘Oh my God, this cloud thing makes a ton of sense,’” Bourke told us.

Desktop’s being sunsetted, but laggards remain: 

Today, many vendors have discontinued their legacy desktop products. Intuit stopped accepting new US subscriptions for QuickBooks Desktop in September 2024. Most new vendors entering the market only offer cloud products, Bourke said.

But not all firms are on the cloud yet. Some of the holdouts seem to be smaller firms whose clients haven’t made the switch: Johnston said he recently spoke with a small Texas firm whose 20 clients are all on desktop, and it hasn’t even considered moving to the cloud. Firms that convert now may “have to leave some of their client base behind,” he said. And converting can be costly, he added: “You have to dedicate the resources and charge enough to get it done, and sometimes the clients aren’t willing to pay.”

Bourke feels that getting on the cloud is a no-brainer. “It’s accessible anywhere day or night or in any country, anywhere in the world,” he said, and because it’s scalable, it works for sole practitioners and huge firms alike. It allows firms to give clients the “Amazon experience” they’ve come to expect even from accountants, he said, and provide them with more convenient, transparent, and faster service.

But there are some drawbacks to the cloud, according to Johnston. Cloud software often isn’t as robust as the legacy programs it replaced, he said. Then there’s SaaS price creep to contend with. Since switching software is a big undertaking, if vendors raise prices, firms may feel they have little choice but to pay up. “That type of stuff is rampant in the accounting market,” Johnston said.

Security is a legitimate concern, Bourke added, admitting, “Data breaches keep me up at night.” But firms can protect themselves by choosing good providers, he said. He recommends looking for vendors that have had SOC II audits to help ensure they’re using best practices for data security.

AI could be accounting’s next digital “revolution,” Bourke believes. He hopes it will catch on more quickly than the cloud did. Change, he said, is necessarily painful, but his advice is to “get it over with; put it behind you.”

“It’s where you’ve got to go for the profession to remain relevant for so many years to come,” he concluded.