At Around the Tax World, you can find out all about what’s going on in the wonderful, worldwide world of tax. Every month, we’ll feature a few mini-articles on what’s been going on in the world when it comes to tax, and fully available for viewing even if you don’t have a subscription.
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In The Headlines
- Tech stocks may be making a comeback as design tool Figma sees a 250% gain on its IPO day. Figma is a web-based interface design tool popular among users with no design background. Founded in 2012, the software company boasts among its clientele major tech companies like Google, Microsoft, Netflix, and Uber. Figma debuted on the New York Stock Exchange at the end of July, initially setting its pricing at $33 per share. However, the price rose to $115.50 by closing and put Figma’s market cap (the value of its outstanding shares) at about $68 million. Comparatively, the company had almost been purchased by Adobe back in 2022 for just $20 billion. Others joining the tech IPO market this year include online bank Chime, stablecoin platform Circle, AI cloud-computing company CoreWeave, and health-tech startups Hinge Health and Omada Health. This wave of IPOs all rose well above their initial price on their first trading day, possibly signaling new strength in the tech market.
- The next hit Broadway musical could be… underfunded due to an expiring tax credit. Broadway producers are seeking a revival of a state tax credit program that recently exhausted its funds. The NYC Musical and Theatrical Production Tax Credit covered up to 25% of production costs, capped at $3 million per Broadway show or $350,000 per Off-Broadway show. Members of the Broadway League are now submitting a proposal for a three-year extension, requesting a total of $100 million in funding per year. The new program would likely come with some amendments—backers are suggesting that successful shows should be required to return a portion of the tax credit. Though the original program did have a repayment requirement once profits hit a certain threshold, high production costs made this a tricky metric. Under the current repayment rules, even famous shows like The Lion King, The Music Man, and Wicked were not required to repay their grants.
- As demand for COVID-19 vaccines decreases, Moderna sales have begun crashing. Moderna shares have fallen by over 20% in 2025, and the company is now looking to reduce its operating expenses by $1.5 billion by 2027. As a result, the vaccine provider is now planning to cut 10% of its workforce. Moderna is one of many pharmaceutical and biotech companies taking a hit from the new federal policies introduced by Trump’s Secretary of Health and Human Services Robert F. Kennedy Jr. Since taking office, RFK has fired all members of the Advisory Committee on Immunization Practices and is moving toward disbanding the United States Preventive Services Task Force, which reviews the latest scientific research and offers guidance on preventive health services. Other pharmaceutical companies may also be looking at retooling their budgets after receiving letters from President Trump. Reportedly, the president sent letters to 17 different drugmakers requesting that they cut U.S. prices within the next 60 days.
What's New In The Tax World?
The end of Direct File, leadership investigations, and staffing shake-ups: What is the future of the IRS?
In a recent announcement, IRS Commissioner Bill Long indicated that the Direct File program would come to an end after just one filing season. The service allowed taxpayers with simple tax return needs to file with the IRS for free. As of 2025, Direct File is available across 13 states for an estimated 30 million Americans. However, the program received pushback from some GOP lawmakers who objected to this use of taxpayer dollars and considered it a conflict of interest for the federal government to both help prepare taxes and collect taxes.
This announcement comes in conjunction with a new directive from President Trump’s “Big Beautiful Bill” that the IRS replace Direct File with public-private partnership alternatives. The bill allocates funds to research and replace the current program. Even without Direct File, taxpayers may still qualify for a different IRS service that partners with third-party tax preparation software companies. Interested taxpayers can use the IRS’ questionnaire tool and provide information about their income and state of residence to see if they qualify. Others may also qualify for the Volunteer Income Tax Assistance program, which is available to taxpayers who earn under $67,000 a year, have a disability, or speak limited English.
This is far from the only change coming for the IRS. The agency is also investing in modernizing its 50-year-old IT system—one of the oldest in the federal government. The Integrated Data Retrieval System contains all taxpayer data and allows employees to review that information during a customer service call, send out tax notices, and track federal tax refunds. Simultaneously, officials from the Department of Government Efficiency (DOGE) and the Department of Homeland Security are requesting unprecedented access to taxpayer records. To accommodate this, DHS and the IRS are reportedly working with tech company Palantir to develop an interagency database with a “mega-API.” However, the future of this project is unclear, since DOGE is facing 15 separate lawsuits challenging its attempts to access IRS data.
The agency is also seeing significant shifts in its staffing. Two compliance officers were recently put on administrative leave and are being investigated for possible misconduct. This comes after the IRS has already lost about a quarter of its staff and over half of its senior leadership. Meanwhile, some remaining managers and supervisors are opting to “downgrade” to customer service roles, stating that the higher pay is not enough of a trade-off for the stress and extra work that comes with managerial roles. The IRS is currently looking to fill 4,500 contact representative positions and is requesting 11,000 new call center representatives as part of its 2026 budget.
State-By-State Updates
- Florida’s hurricane season is also a tax-free season this year. As of August 1st, the state introduced a permanent sales tax exemption for hurricane preparedness supplies. This is part of an effort to encourage residents to stock up well in advance of peak hurricane season, which tends to pick up around mid-August but lasts from June through November. Previously, Florida had a two-week sales tax holiday that typically started in June. This has now been replaced by the permanent tax exemption. Qualifying items include a range of batteries, fire extinguishers, insect repellent, life jackets, portable gas cans, portable generators, smoke detectors and carbon monoxide detectors, sunscreen, tie-down kits, and waterproof tarps. Many grocery store items, such as bottled water, first aid kits, and a variety of food options are already tax-free.
- Illinois’ biggest city is entertaining a new social media ad tax and a corporate head tax to bridge its budget gap. Chicago is facing a shortage of $1.1 billion for 2026. Mayor Brandon Johnson has promised to avoid further property tax increases, which means city officials will be looking for creative alternatives. One possible solution is to raise taxes on the approximately 127,000 millionaires and 25 billionaires living within the city limits. Another that Johnson has brought to the table is reinstating Chicago’s corporate head tax. Nixed in 2014, this tax charged companies with more than 50 Chicago-based employees $4 per employee per month. Though the tax raised $35 million in its final year, opponents were more concerned that it incentivized employers to move their businesses out of Chicago. Yet another alternative is a social media advertising tax, which is becoming increasingly popular among local governments.
- Massachusetts “bets” on a new sports wagering tax—but falls short in generating new jobs. The Bay State legalized sports betting in 2023 but didn’t see the economic impact supporters had anticipated. In 2023, the tax generated $90.8 million in revenue. However, the legislative change did not do as much in spurring job creation. Around 118 new jobs were added from legal sports betting. By comparison, 15,431 jobs came from the introduction of casinos. Research also suggests that sports betting may now be cutting into the revenue brought in by physical casinos. Casino revenues dropped by 0.9% in 2024—the year after sports betting was legalized—but the reports say there is not enough data to determine if these events were linked. Because casinos are currently taxed at a higher rate than sports betting revenues, this shift could affect Massachusetts’ state revenue. Casinos also spend more on goods and services from local companies, increasing their economic impact.
- Utah’s smallest towns are considering the biggest property tax increases. Throughout the state, the rising cost of living is prompting local governments to find strategic ways to raise their revenue. This year, over 60 cities, school districts, and special districts in the Beehive State are weighing a property tax hike. The highest comes from Wellington City—with just 1,600 residents, the city is considering a 225.31% property tax increase, which amounts to an extra $527.29 for the average home. Notably, Wellington City hasn’t raised its property taxes since 2017. The other towns considering a major hike include Howell (237 residents), Eureka (661 residents), Uintah City (1,400 residents), and Gunnison (3,600 residents). Among these municipalities, the possible tax increases range from 65.8% to 100%. Before the new taxes can be approved, each town or city has to submit their proposal to the Utah State Tax Commission where elected officials can approve, modify, or reject the increases.
Tax Planning Tips
Summer means tax-free holiday season! Which states can save consumers the most money? As we reach the final weeks of summer, many states and cities have enacted tax-free weeks to make back-to-school shopping more affordable for families. States with tax holidays still coming up this August include Connecticut, Florida, Maryland, and Texas. Florida’s holiday is the longest, stretching across the entire month of August and covering clothing, computers, learning aids, and school supplies. Most other holidays last a week or weekend. Connecticut’s holiday lasts from August 16th to 22nd and covers up to $300 in clothing and footwear. Maryland exempts all back-to-school supplies from taxes from August 9th to 15th. Texas’ holiday lasts just for the weekend of August 8th to 10th and applies to backpacks, clothing, shoes, and school supplies.
On the opposite end of the spectrum is Georgia, which dropped its tax-free weekend back in 2017. Local lawmakers attempted to revive it for the past several years, but their attempts did not gain traction. Why opt out of this popular trend? A 2011 study by Georgia State University found that the state was losing between $36 million to $50 million per tax holiday, and shoppers were not saving as much as expected because retailers were raising their prices.
Own a farm? Trump’s “Big Beautiful Bill” could mean more subsidies for certain regions. The passage of this new legislation means an extra $60 billion for farmers—but the distribution varies widely depending on what they grow. About $50 billion of this funding will go to farmers enrolled in price and revenue support programs, which cover 22 commodity crops. These crops are grown mostly for bulk sale rather than direct consumption, such as corn and soybeans. Large farms in the South are likely to see the most benefits. For instance, about 600 farms in Gaines County, Texas will receive the biggest increase: $258 million in government payments over the next ten years. By comparison, the 1,000 farms in Monterey County, California will receive just $390,000 in additional funding.
Critics feel that the legislation favors large corporations. The industry has lost more than 300,000 farms over the past 20 years, causing some fear that small-to-medium-sized family farms will continue to be ousted by larger producers. In 2024, only 8% of farms in the U.S. were corporate farms, but they received 47% of subsidy payments and 67% of crop insurance payments.
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CURRENT EDITION
This Is The Only Other Year-End Tax Tip Guide You Need
So as I did last year, I have reviewed a multitude of year-end tax tips articles. One of them is a real standout that you should be sure to check out. If you missed it, you should definitely roll back to the November 15 edition and go over Dominique Molina’s piece, which focuses on what you need to do sooner rather than later in response to OBBBA. It provides more detailed, relevant, actionable advice that you won’t see anywhere else than any of the multitude of pieces I have reviewed. As for the rest, I will give you a basic rundown of what I call the SOSO (same old, same old) and a few suggestions that stand out as different that I will get into a little more along with some thoughts of my own.
The Corporate Vault: How to Use a C Corporation to Stockpile Cash for the Future
When most people think about saving for the future, their minds jump to retirement accounts—401(k)s, IRAs, maybe even defined benefit plans. But business owners have another option that often goes overlooked: using a C corporation as a strategic savings vehicle. By leveraging the flat 21% corporate tax rate, smart income shifting, and careful timing of distributions, business owners can “stockpile” cash inside a corporation, building wealth for future use without the red tape of traditional retirement plans. Want to see how top tax strategists legally use C corporations as private retirement vaults while avoiding double taxation and IRS scrutiny? Continue reading to learn the blueprint.
When TikTok Tax Hacks Backfire: Helping Clients Misled by Social Media Scams
Jessica, a self-employed consultant, was thrilled when she found a viral TikTok video promising a “little-known” tax trick. The video claimed she could get a huge refund by claiming a special Fuel Tax Credit and even writing off her family’s beach vacation as a business expense. Following the advice, Jessica filed an amended tax return and waited eagerly for a windfall. A few months later, instead of a refund check, Jessica received a stern IRS notice. Her so-called credits were disallowed, her refund was denied, and she now faced penalties. Jessica isn’t alone. Every tax season, well-intentioned taxpayers get lured by false tax advice on social media, only to end up in trouble. As tax professionals, we often meet panicked clients like Jessica who need our help to untangle the mess.
