Republican lawmakers are pushing to eliminate the Public Company Accounting Oversight Board (PCAOB), aiming to support Donald Trump's broader deregulation agenda.
On Friday, leaders of the House Committee on Financial Services introduced the proposal to dismantle the audit watchdog. However, Democrats are expected to strongly oppose any efforts to shut down the agency.
If the proposal passes, the PCAOB’s oversight responsibilities would shift to the Securities and Exchange Commission (SEC).
The PCAOB was established around two decades ago, following the collapse of Enron in 2001, to monitor auditing practices and conduct regular inspections of US auditing firms.
Under the new legislation, the PCAOB would cease to exist, and the SEC would absorb its functions. Additionally, the levy currently collected from listed companies and broker-dealers to fund the PCAOB would be abolished.
Some accounting firms have voiced frustrations with PCAOB Chair Erica Williams, particularly criticizing new strict policies and the high fines stemming from enforcement actions. While some firms may quietly welcome the shutdown, the Center for Audit Quality — representing top accounting firms — has urged for better communication from the agency but stopped short of calling for its closure.
Democrats, meanwhile, are likely to fight Republican efforts to dismantle the regulator.
If the PCAOB were dissolved, many of its employees would be directly impacted — some could lose their jobs, while others may be absorbed into the SEC at reduced salaries.
**Republicans Eye Major Tax Overhaul That Could Shake the Non-Profit Sector**
At the same time, Congress is working on a sweeping tax bill that experts warn could cause serious disruption in the nonprofit world ahead of the 2017 Tax Cuts and Jobs Act’s expiration later this year.
Steve Taylor, a longtime Republican, commented, “There’s still time to act before Congress pushes through a massive new tax bill — but action must come quickly.”
Proposed changes would extend beyond simply removing tax breaks for universities and hospitals, aiming to fundamentally weaken section 501(c) of the federal tax code. New compliance hurdles would make it harder for nonprofits to avoid taxes.
Donald Trump has floated the idea of revoking tax-exempt status for all nonprofits — a suggestion that has alarmed many nonprofit leaders. Analyst Ben Gose warned of potential chaos if such proposals move forward.
However, attorney Jeffrey Tenenbaum reassured nonprofit organizations that stripping tax-exempt status isn’t simple — it would require a lengthy audit process and could be contested first at the IRS level and then in the courts.
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