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Subscribe02 JUL 2025 / MONTHLY REGULATORY CAPSULE
In June 2025, the finance industry underwent significant regulatory changes, impacting sectors from audits to cryptocurrency. The IRS introduced several changes, including a revamp of their Pre-Filing Agreement (PFA), facing a $4 billion tax dispute with Yum! Brands, and extending tax deadlines for storm victims in Mississippi and Texas. The Trump SEC Chair scrapped 14 proposed rules, shifting towards increased deregulation. The SEC also proposed an "Innovation Exemption" for the crypto industry and plans a potential PCAOB takeover. Audit company CrowdStrike is under SEC investigation. CPA licensing rules in Pennsylvania and New York were addressed. The series of changes reflect seismic shifts in the regulatory and financial landscapes.
June 2025 was no ordinary month for finance, tax, and audit professionals. From IRS revamps and SEC shakeups to state-level CPA reform and PCAOB enforcement headlines, regulators dropped bombshells that could reshape careers and compliance strategies across the board. Whether you're advising multinational clients, prepping government audits, or mentoring the next generation of CPAs, the updates from this month weren’t just news-they were signals of seismic change. Here’s your curated recap of what mattered and why.
The IRS’s revamped Pre-Filing Agreement (PFA) program is a strategic gift for large businesses and international taxpayers. Announced via IR-2025-69, the overhaul brings clarity, faster processing, and targeted guidance-making it easier to secure tax certainty before filing. Timing is critical: apply within 60 days of the transaction or 30 days post-year-end. It’s not just audit protection-it’s a way to boost financial reporting, global leverage, and M&A appeal.
Yum! Brands is in a $4 billion tax faceoff with the IRS over a 2014 restructuring it believed was tax-free under IRC §368(a)(1)(B). The IRS says otherwise, alleging back taxes, penalties, and interest that now exceed the company’s 2024 pre-tax income. The case, now in U.S. Tax Court, could redefine how M&A reorganizations are taxed-raising red flags for CFOs, dealmakers, and tax pros. Meanwhile, Yum!’s move to tax-free Texas adds a strategic twist but won’t erase the bill. With scrutiny high and stakes even higher, this isn’t just a fast-food fight-it’s a tax precedent in the oven.
The IRS has issued Rev. Proc. 2025-23, a sweeping 430-page update to its automatic accounting method changes, effective for filings starting June 9, 2025. The restructured guidance now organizes changes by Code section and includes 17 key updates, streamlining compliance for CPAs filing Form 3115. From Sec. 481(a) tweaks to new boundaries for farming businesses, the changes promise clearer alignment between tax strategy and evolving business realities.
In response to destructive spring storms, the IRS has granted tax relief to impacted individuals and businesses in FEMA-declared disaster zones across Mississippi and Texas. Affected taxpayers now have until November 3, 2025, to file returns and make payments, with penalties automatically waived. The extension covers a wide range of filings, from income tax to payroll and excise returns, offering crucial breathing room during recovery…
The IRS may be celebrating a smooth 2025 tax season, but a new report from the National Taxpayer Advocate warns the road is rocky. While service metrics improved, serious concerns remain, including aging tech, staff shortages, and growing case backlogs could derail progress. With budget cuts looming, the report stresses that without sustained modernization, taxpayer support may suffer just when it’s needed most…
In a sweeping June 2025 move, SEC Chair Paul Atkins scrapped 14 pending rules from the Gensler era, halting planned crackdowns on ESG, AI, crypto, and private funds. The rollback marks a decisive shift toward deregulation, emphasizing voluntary disclosure over prescriptive mandates. While markets responded positively, concerns are mounting over investor safeguards and transparency. As SPACs and crypto regain steam, firms may need sharper internal controls to keep pace…
SEC Chair Paul Atkins is proposing an “Innovation Exemption” that could offer DeFi and crypto developers structured relief from enforcement, allowing time-limited pilots with clear guardrails. It’s a pivot from prior crackdowns to a more collaborative model, aimed at fostering compliant innovation. With decentralization filters and smart contract benchmarks on the table, this policy could reshape U.S. crypto leadership for years to come.
With Congress advancing the sweeping “One Big Beautiful Bill,” the SEC is bracing for a potential transfer of PCAOB oversight duties. Acting Chief Accountant Ryan Wolfe confirmed preparations are underway should standard-setting, inspections, and enforcement shift to the Commission. Still, the SEC is equally prepared if the provision gets dropped. Meanwhile, discussions around staffing cuts and QC 1000 implementation add layers of complexity as the transition debate intensifies...
CrowdStrike, a leading name in cybersecurity, is under the SEC’s microscope as regulators request information tied to its revenue recognition and deal structures. While no formal allegations have emerged, the inquiry highlights growing concern over how tech firms account for multi-year contracts and performance obligations. With CrowdStrike cooperating, the case could offer broader signals about future enforcement trends in tech accounting…
Between 2018–2022, Deloitte, PwC, and EY’s Dutch firms were hit with $8.5M in fines by the PCAOB for widespread internal exam cheating, involving even senior leadership. These mandatory training tests covered critical topics like ethics and audit standards. Regulators cited serious quality control lapses and placed the firms under strict oversight. While each firm has since pledged reforms, the scandal highlights a deeper issue-ethics in accounting starts with culture, not compliance checkboxes.
A Senate ruling under the Byrd Rule blocked a Trump-backed provision to dissolve the PCAOB by merging it with the SEC, declaring it non-budgetary and ineligible for reconciliation. The PCAOB, vital for audit oversight, remains independent for now. Despite record penalties in 2024, its future is still uncertain as political pressure to reduce regulatory oversight persists. For finance pros, the message is clear: regulatory scrutiny isn’t gone-it’s just dodged another bullet.
The PCAOB’s latest broker-dealer inspection report is sounding alarms, 76% of 2024 audits showed deficiencies, up from 70% in 2023. From poor revenue testing to GAAP violations, even large firms aren’t spared. As new quality control standards loom in December 2025, the trend underscores an urgent need for audit upgrades across the board before enforcement consequences catch up.
The PCAOB has sanctioned Heaton & Co. and partner Kristofer Heaton for egregious audit violations, including post-completion tampering with documentation and AS 1215 failures. With a revoked registration, two-year bar, and $60K fine, the case is a stark reminder that poor documentation isn’t just sloppy, it’s a compliance breach with lasting consequences for both firm and auditor...
GASB’s new Implementation Guide 2025-1, released June 23, 2025, delivers 16+ plain-language Q&As to clarify leases, error corrections, conduit debt, fund types, and more. Designed for real-world use, the guide targets common practitioner struggles and carries authoritative Category B GAAP status. Most provisions apply to fiscal years starting after June 15, 2025. For auditors and finance pros in government, it’s a must-have clarity tool-not a rulebook rewrite, but the GPS to navigate existing standards with confidence.
In a key revision to the One Big Beautiful Bill, the Senate preserved the state and local tax (SALT) deduction for pass-through entities, overriding a House proposal that would have limited it. The AICPA, which actively lobbied for the change, applauded the move as a win for tax parity and small business growth. As reconciliation continues, eyes are now on the House to follow the Senate’s lead and keep the deduction intact.
With Senate Bill 719, Pennsylvania introduces a new 120-credit licensure track requiring two years of experience, offering an alternative to the long-standing 150-hour rule. The move aims to reverse the CPA pipeline decline while preserving quality and mobility. By valuing real-world experience, the state is challenging traditional credentialing norms and setting the pace for nationwide reform. Other jurisdictions are already watching this bold step toward modernization…
New York’s new legislation, Assembly Bill A7613B and Senate Bill S6891B, proposes a 120-credit, two-year experience track as a modern alternative to the 150-hour rule. With added perks like e-signature adoption, the bills aim to boost talent pipelines and reduce entry barriers. If signed into law, this shift could spark a ripple effect across states, reshaping licensure norms and CPA career paths nationwide.
Regulatory landscapes may keep shifting, but one thing’s constant: professionals who stay informed gain the upper hand. From PCAOB integrity crackdowns to evolving CPA licensure rules in Pennsylvania and New York, June’s updates reveal a system in transition and opportunity. Bookmark this recap, share it with your team, and check back next month as we continue tracking the policies shaping your practice and your profession.
Until next time…
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