Schultz & Company, Certified Public Accountants

Schultz & Company, Certified Public Accountants Schultz & Co CPAs is much more than a balance sheet and a bill. We are a firm dedicated to providing sound technical expertise & elegant financial advice.

09/01/2026

IRS enforcement declines as federal tax collections reach record $5.3tn
The IRS collected a record $5.3tn in federal tax revenue in fiscal 2025, up 13.2% from fiscal 2023, even as enforcement activity weakened amid substantial workforce reductions, according to TIGTA. Examination and collection staffing fell from 27,217 employees at the end of fiscal 2024 to 19,612 at the end of fiscal 2025, contributing to a 30% decline in individual examination starts, while examinations of taxpayers earning more than $400,000 fell 27%. Enforcement revenue declined from a record $98.7bn in fiscal 2024 to $93.8bn in fiscal 2025, while proposed additional taxes from examinations fell to $26.8bn from $31.9bn in fiscal 2023. TIGTA warned that the effects of workforce reductions could become more apparent over time, with the IRS also exhausting its remaining Inflation Reduction Act enforcement funding at the end of 2025.

08/25/2026

We were asked whether we thought NAFTA worked or did it create a "giant sucking sound going south" like Ross Perot suggested. NAFTA’s record is more complicated than “good” or “bad.”

Overall, it probably made the U.S. economy modestly better off through lower consumer prices, more trade, greater supply-chain efficiency, and increased exports.

But the gains were relatively small and broadly dispersed, while the losses were heavily concentrated. Certain manufacturing workers and communities suffered real job losses, wage pressure, and long-term economic damage as production moved to Mexico. So yes, the giant sucking sound happened.

The biggest mistake was not necessarily free trade itself. It was the assumption that displaced American workers would quickly move into equally good jobs. In many communities, that simply did not happen.

Bottom line: NAFTA modestly benefited the United States as a whole, but Washington significantly oversold the benefits and underestimated the damage to American manufacturing communities.

And much of the later collapse in U.S. manufacturing employment was tied more closely to China’s entry into the WTO and increased Chinese imports than to NAFTA alone.

08/19/2026

IRS failed to test employees for suspected drug use despite evidence of rampant drug use and rolling doobies with your tax returns.....Federal agencies are required by law to develop a plan to achieve a drug-free workforce. The IRS Drug-Free Workplace Plan mandates annual random testing of at least 10 percent of the total Testing Designated Positions population (these are employees in sensitive positions). In addition, applicants who are tentatively selected for IRS Criminal Investigation positions must undergo drug testing before their appointment.
We assessed the effectiveness of the IRS Drug-Free Workplace Program (DFWP) in identifying and testing IRS employees for illegal drug use.
What did we find?
The IRS did not conduct reasonable suspicion testing for employees suspected of illegal drug use during this period, even though evidence of suspected drug use existed. For example, IRS Human Capital Office management provided a list of five employees where drug use was suspected in Fiscal Year 2024, however testing was not conducted.
In addition, from October 2022 through April 2025, our Office of Investigations (OI) received investigation referrals for 78 employees based on allegations of illegal drug issues. OI opened investigations into 22 of these employees for potential drug issues and referred 11 employees to the Department of Justice for prosecution but the Department of Justice declined. The disciplinary actions for these 11 employees ranged from no discipline to suspension.
There is a lot going on in America that the public is oblivious to. Many times it is what is not said that's most important. I would like to know, why did the DOJ decline prosecutions?

08/01/2026

IRS warns of fake crypto compliance letters targeting taxpayers
The IRS Criminal Investigation (IRS-CI) division has warned taxpayers about a new scam targeting cryptocurrency holders, in which fraudsters send convincing fake IRS letters directing recipients to register for a nonexistent "Digital Asset Compliance Portal." The letters include a QR code linking to a fraudulent website designed to resemble IRS.gov, where victims are asked to provide sensitive personal information, cryptocurrency wallet details, and exchange account credentials that can be used to steal identities or digital assets. IRS-CI emphasized that the agency does not operate a Digital Asset Compliance Portal and urged taxpayers not to respond to unsolicited letters or scan QR codes claiming to be from the IRS. The agency said criminals are increasingly using official-looking correspondence, fake websites, and urgent deadlines to exploit public trust and encouraged anyone receiving suspicious communications to verify the source and report potential fraud.

07/27/2026

Tax Court warns against using business funds for personal expenses
A U.S. Tax Court ruling, in Chernomordikov TC Memo 2025-129, has reinforced the importance of keeping business and personal finances separate after finding that an individual who used a C corporation’s funds for luxury vehicles, personal expenses, and an undocumented $1.7m loan received taxable corporate distributions. Although the taxpayer, whose mother was the company’s sole shareholder, did not report the payments or file tax returns for the years in question, the court declined to impose fraud penalties because of insufficient evidence, underscoring the need for business owners to maintain proper financial records and avoid using corporate assets for personal spending.

07/26/2026

IRS to automate penalty relief
The Internal Revenue Service is replacing its First Time Abate (FTA) penalty relief programme with an Automatic Exemption from Penalty (AEP) system, which will automatically waive eligible penalties for compliant taxpayers. The transition begins with 2025 returns, with AEP fully replacing FTA for returns due from January 2027. The change is expected to expand access significantly, with an estimated 1.5m taxpayers qualifying annually compared with around 220,000 under the current system. Tax advisers are encouraged to monitor the transition and continue documenting reasonable cause claims where appropriate to protect future eligibility for relief.

07/15/2026

What do Enron, WorldCom, Parmalat, Sunbeam, Freddie Mac, Fannie Mae, General Electric, Nortel Networks, Waste Management, AIG, Lehman Brothers, Bear Stearns, Mattel, Washington Mutual, Homestore.com, Duke Energy, Tyco International, HealthSouth, Horizon/CMS Healthcare, Satyam Computer Services, Credit Suisse, Morgan Stanley, First Republic Bank, Silicon Valley Bank, Signature Bank, Alameda Research, Future FinTech, USA Technologies—now Cantaloupe—Celadon Group, Austal USA, Roadrunner Transportation Systems, Iconix Brand Group, CHS, Granite Construction, BT Group, Kraft Heinz, Sequential Brands, SAExploration, Manitex International, Hertz, NMC Health, Hill International, ITT Educational Services, Colonial Bank, Obsidian Energy, Alere, Penn West Petroleum, Archer-Daniels-Midland and Datapoint Corporation have in common?

Add Adelphia Communications, Qwest Communications, Royal Ahold, Xerox, Cendant, Computer Associates, Global Crossing, Peregrine Systems, Bristol-Myers Squibb, Computer Sciences Corporation, Comverse Technology, Dell, Diamond Foods, Autonomy, Olympus, Tesco, Toshiba, Valeant Pharmaceuticals, Steinhoff International, Carillion, MiMedx, Wirecard, Luckin Coffee, Americanas and China Evergrande to the list.

Each became associated with significant accounting, financial-reporting, disclosure, internal-control, audit or corporate-governance failures.

The common denominator is not that every company committed the same offense or that every collapse was technically an accounting fraud. The common denominator is that the risk-based audit model repeatedly failed to detect—or timely expose—material misstatements, fabricated transactions, concealed liabilities, manipulated estimates, fictitious revenue, nonexistent cash and management override of internal controls.

The profession’s response is invariably another standard, another risk assessment, another checklist and another representation letter. Yet the failures continue.

Risk-based auditing may be efficient for the audit firm, but efficiency is not the same as effectiveness. An audit methodology that repeatedly produces clean opinions shortly before enormous financial-reporting failures deserves scrutiny, not reflexive defense.

The AICPA’s risk-based auditing standards are not fit for purpose, and the PCAOB’s version of the same basic model has not solved the problem.

There is no right way to do the wrong thing.

There is no credible evidence the wealthy don't pay their fair share. Anyone who says differently thinks you're an idio...
07/04/2026

There is no credible evidence the wealthy don't pay their fair share. Anyone who says differently thinks you're an idiot and is trying to get your vote. Shame on you if you believe it.

07/04/2026

Advisors see value in Trump accounts, but many still favor 529 plans
Financial advisors are weighing the benefits and drawbacks of the new Trump accounts, which began accepting contributions on July 4 and provide a $1,000 federal contribution for eligible U.S. children born between 2025 and 2028. While many advisors recommend opening an account simply to claim the government contribution, some continue to view 529 education savings plans as the better long-term option because parents retain greater control over the assets, beneficiaries can be changed, and qualified education withdrawals are tax free. Supporters of the accounts point to the appeal of the free $1,000 contribution, tax-deferred investment growth, and recent Treasury guidance confirming contributions will not count toward gift tax reporting limits. However, advisors caution that Trump accounts have lower contribution limits than many alternatives, distributions may be taxable, and beneficiaries gain full control of the accounts at age 18, a feature that gives some parents pause.

07/03/2026

TIGTA uncovers widespread errors at taxpayer assistance centers
IRS Taxpayer Assistance Centers frequently provided incorrect or incomplete guidance during unannounced visits, according to a new TIGTA report, with employees giving inaccurate tax law advice in 46% of the cases where assistance was provided. Inspectors conducted 91 visits to 82 centers nationwide and found that one-third of visits resulted in incomplete assistance, denial of entry by security personnel, or unexpected office closures. In several cases, front-desk staff failed to fully address taxpayers' questions, while some visitors were turned away despite seeking assistance. The report also found shortcomings in customer service practices, including the failure to distribute customer satisfaction surveys during most visits where they were required. Although the IRS expanded weekday hours and hosted additional Taxpayer Experience Day events during the 2025 filing season, the agency assisted about 925,000 taxpayers, a 7% decline from the previous year despite holding more outreach events.

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