Accountants Face Liability Risks in 2026 Tax Season Amid IRS Focus

What's Happening?

Accountants are facing increased liability risks in the upcoming 2026 tax season due to several factors, including the Internal Revenue Service's continued focus on Employee Retention Credit (ERC) submissions. According to Stephen Vono, senior vice president at McGowanPro, accountants must amend returns to reflect ERC, but delays in IRS payments have led to rising claims from clients who have not received their refunds. Additionally, the One Big Beautiful Bill Act introduces new tax planning challenges, requiring practitioners to stay updated on changes to avoid filing errors. Other risks include failing to maximize deductions, advising clients on financial decisions impacting taxable burdens, and managing multiple state filings that may uncover residency issues. Perennial issues such as fraud detection, engagement overreach, and cybersecurity threats also persist, necessitating robust information security protocols and regular staff training.

Why It's Important?

The heightened liability risks for accountants in the 2026 tax season have significant implications for the accounting industry and its clients. As the IRS intensifies scrutiny on ERC submissions, accountants must ensure compliance to avoid legal claims and client dissatisfaction. The introduction of the One Big Beautiful Bill Act further complicates tax planning, potentially affecting the financial outcomes for businesses and individuals. Failure to adapt to these changes could result in financial penalties and loss of client trust. Moreover, the ongoing challenges of fraud detection and cybersecurity underscore the need for accountants to implement stringent security measures and maintain high professional standards. These developments could lead to increased demand for specialized accounting services and heightened vigilance in tax preparation practices.

What's Next?

Accountants are advised to amend returns promptly and maintain regular communication with clients regarding IRS payments and tax planning under the new legislation. Practitioners should stay informed about changes in tax laws and ensure compliance to mitigate liability risks. The industry may see a shift towards more specialized services, with accountants seeking additional certifications to handle complex engagements. Firms are likely to invest in enhanced cybersecurity measures and staff training to protect client data and prevent fraud. As the tax season approaches, accountants must prepare for potential audits and claims, emphasizing the importance of thorough documentation and proactive client engagement.

Beyond the Headlines

The evolving landscape of tax liability risks highlights broader ethical and professional challenges for accountants. The pressure to maximize deductions and advise clients on financial decisions raises questions about the balance between client advocacy and compliance with tax regulations. The increased focus on cybersecurity and fraud prevention reflects a growing awareness of the ethical responsibility to protect client information. As accountants navigate these complexities, the profession may experience shifts in standards and practices, influencing the future of tax preparation and advisory services.