Tax professionals face a uniquely challenging environment in 2025. A new presidential administration, looming federal tax legislation, ongoing court battles over beneficial ownership reporting, and unresolved employee retention credit claims all create substantial uncertainty.
In a recent Federal Tax Updates podcast, Roger Harris, EA, and Annie Schwab, CPA from Padgett Business Services, offered practical perspectives on these developments and shared advice for balancing client demands with a healthy, sustainable practice.
Legislative Changes on the Horizon
Tax reform is top of mind as a new administration settles into Washington, D.C. The question is whether lawmakers will pass one large, comprehensive bill or split proposals into multiple bills, grouping measures like debt ceiling increases, immigration reform, and energy policy alongside tax provisions. The stakes are high: key parts of the Tax Cuts and Jobs Act are set to expire, which could mean higher individual tax rates, changes to the SALT deduction, adjustments to the §199A deduction, and more.
“We may not know what tax reform looks like until midyear,” says Roger. “If it all goes in one big bill, just a handful of votes can sink it. Or it may be broken into multiple bills, and that means a different timeline. Either way, we have to stay alert.”
Practitioners should monitor these potential outcomes while planning for extended negotiations. It’s also wise to keep an eye on legislative talks involving tax exemptions for tip income, overtime, or Social Security, since the new administration floated such ideas during the campaign.
BOI/CTA Confusion: Where Do We Stand?
Amid the legislative uncertainty, beneficial ownership reporting under the Corporate Transparency Act (CTA)—often referred to as BOI—continues to be a source of confusion. In the past few months, courts imposed and then lifted injunctions that blocked BOI enforcement. As of now, enforcement is on hold again, pending further legal action or possible administrative changes.
“It seemed like every week there was a new ruling,” Annie explains. “We’d tell clients to get ready, and then it’d be enjoined again. For now, you can voluntarily file, but there’s no requirement to do so. Keep collecting ownership information so you can react quickly if the court or Congress reinstates deadlines.”
The Ongoing ERC Saga
The Employee Retention Credit (ERC) continues to cause headaches for taxpayers, their advisors, and the IRS. Some legitimate claims remain unprocessed for months, while fraudulent filings have led to heightened scrutiny. In rare instances, unsuspecting businesses received duplicate ERC checks—a sign that the IRS systems cannot always detect repeated amendments for the same quarters.
“One of our clients filed for ERC correctly in 2021 and got their funds,” Roger recalls. “Later, a mill filed on their behalf—without their full knowledge—and the IRS actually sent them a second check for the same quarters. Obviously, that’s not valid, and we’re advising them to return it.”
Many filers await pending refunds, while others received notices disallowing credits. Practitioners should respond to such notices with thorough documentation, using the IRS’s official guidance on how to support ERC claims.
Taxpayer Advocate’s Critique and Calls for Regulation
The Taxpayer Advocate Service (TAS) recently released its annual report to Congress, once again criticizing persistent refund delays, ERC backlogs, lengthy identity theft processing times, and the IRS’s challenges in hiring and training personnel. One recurring recommendation is to push for return preparer regulation so taxpayers can have more confidence in the professionalism of those handling their returns.
“If we want to reduce fraud and confusion, we need minimal competency standards,” Annie notes. “There’s a big difference between well-trained tax professionals and someone who relies on questionable TikTok videos.”
While the IRS cannot impose licensing requirements on its own due to legal barriers, the new Congress may revisit the issue as part of any broader tax legislation.
Preparing for Filing Season: Dates, Forms, and Best Practices
The IRS opened e-filing for the 2024 tax year on January 27, 2025. State forms may lag, so practitioners should check software updates regularly. Roger and Annie advise setting realistic timelines with clients.
Other tips for staying productive and efficient this tax season include:
- Use organizers and engagement letters. Provide clear instructions on document collection and a formal engagement agreement.
- Track workflow. Implement a system to monitor assignment status, bottlenecks, and deadlines.
- Manage refund expectations. Remind clients that Earned Income Tax Credit or Additional Child Tax Credit refunds may take longer.
- Stay informed on disasters and extensions. Remember that many local or state-declared disasters can extend deadlines for filing or payments.
Modernizing Your Practice: Four Keys to Success
While legislative and IRS developments are complex, there’s plenty practitioners can do within their firms to thrive during an unpredictable season. Roger and Annie highlight four primary areas:
Adopt Professional-Grade Research Tools
Relying on Google or social media for tax answers can be risky.
“Social media is not your go-to spot for tax research,” says Annie. “All those quick tips can be entertaining but inaccurate.”
Instead, invest in authoritative resources such as Thomson Reuters Checkpoint Edge or CCH AnswerConnect. Physical desk references (like Quickfinders or handbooks) and government websites also offer reliable guidance. Better research means fewer errors, faster service, and greater client trust.
Streamline Workflow
As the volume of returns surges, a standardized workflow prevents chaos.
“If you take a minute and think, ‘Are we duplicating efforts? Where’s the bottleneck?’ you’ll find major improvements,” Annie advises.
Use client organizers, track returns from intake to e-filing, and conduct brief weekly check-ins with staff. By pinpointing potential delays early, you can smooth operations and avoid the endless grind of 80-hour weeks.
Strengthen Security Protocols
Tax offices remain prime targets for identity thieves. Roger urges every firm to keep a Written Information Security Plan (WISP), train staff, and encourage clients to open online IRS accounts and request IP PINs.
“Data breaches can be devastating,” he says. “Make sure your entire team knows the protocols. It’s part of delivering high-value services.”
Reassess Pricing and Client Selection
Raising fees can be difficult, but it may be necessary given the growing complexity and costs.
“You’ll be shocked at how many clients you retain,” Annie notes. “And if a few leave, that frees you up for better, higher-paying clients.”
Firms that price based on value rather than forms or hours can afford ongoing technology investments, research tools, and security upgrades—leading to sustainable growth.
Balancing Opportunity with Uncertainty
This year promises more twists and turns as Congress wrestles with potential tax bills, courts mull over BOI reporting, and the IRS copes with ERC claims. Nonetheless, Roger and Annie remain optimistic that tax practitioners can thrive with thoughtful modernization and clear client communication.
“The old model of grinding 80-plus hours a week is not the only way,” Roger says. “Focus on delivering expertise efficiently, staying up to date on changes, and protecting both your clients and your own well-being.”
By keeping an eye on legislative and administrative developments and making targeted improvements to research, workflow, security, and pricing, firms can navigate an unpredictable season while building a profitable and manageable practice. Be sure to listen to the entire Federal Tax Updates episode for more tips from Annie and Roger.