What the TCJA Changes Mean for CPAs
…And Why It May Trigger Increased Audit Exposure
As we approach the end of 2025, CPAs across the country are preparing for another round of tax complexity, this time surrounding the scheduled expiration of key provisions in the Tax Cuts and Jobs Act (TCJA).
But just as planning ramps up, Congress has added a new variable: the recently passed One Big Beautiful Bill Act, which extends, modifies, or replaces several TCJA provisions. While it creates some clarity, it also introduces new areas of interpretation, and with them, increased audit exposure.
At Milikowsky Tax Law, we don’t prepare tax returns, we defend businesses during IRS, EDD, CDTFA, and SBA audits. We partner with CPAs to protect their clients (and their practices) when complex audits arise. Here’s what you should be thinking about as TCJA policy evolves, and how we can support you.
TCJA: What’s Expiring, What’s Staying, and What’s Changing
The TCJA was originally set to expire in full at the end of 2025. However, the One Big Beautiful Bill Act now makes several provisions permanent, while others have been modified or replaced.
Key updates include:
- Permanent Extensions: Lower individual tax rates, the increased standard deduction, and the higher lifetime estate and gift tax exemption will now remain in place.
- Modified or Temporary Provisions:
- A temporary increase in the SALT deduction cap
- A new deduction for older adults, with income limitations and phase-outs
- New Tax Provisions:
- Expanded 529 plan uses
- A new “Trump Account” savings vehicle for minors
These changes reduce some uncertainty, but they also introduce new complexities, especially around eligibility, documentation, and planning assumptions that may differ from the original TCJA framework.
Important: The current legislative landscape could change again with future Congressional action. CPAs and tax professionals should remain vigilant and adjust strategies accordingly.
1. TCJA Uncertainty = More Mistakes = More Audits
When the TCJA was passed in late 2017, 92% of tax professionals reported major disruption to their internal processes. If future legislation (whether through repeal, expansion, or replacement) passes on short notice, that disruption may repeat.
Late-stage guidance increases the pressure to interpret, model, recalculate, and refile quickly. And as we’ve seen in past audit cycles, uncertainty drives inconsistency, and that’s exactly what government agencies are trained to detect.
2. Legacy Workpapers May Not Be Enough
According to Bloomberg Tax’s 2025 Tax Changes Readiness Survey:
- 25% of tax professionals anticipate major challenges in modifying current workpapers
- 10% expect to create entirely new documentation systems
- Fewer than half have started detailed planning due to the shifting policy
This lag in preparation can increase risk for both filing errors and incomplete documentation, issues that may not surface until audit triggers are reviewed in 2026 or beyond.
3. More Clients Will Need Audit Defense (And More CPAs May Need Legal Protection)
Whether your client is audited for misclassification, PPP loan usage, Form 1099-K discrepancies, or CDTFA sales tax compliance, one fact is clear: Communications between CPAs and clients are not protected by privilege, and communications with attorneys are.
Milikowsky Tax Law partners with CPAs to support clients during:
- IRS audits
- EDD worker classification audits
- CDTFA sales tax audits
- SBA PPP loan forgiveness audits
- Customs (CBP) audits and tariff disputes
- Criminal tax investigations
We support your work without competing with your services.
4. Consulting and Legal Costs Are Rising
With 40% of surveyed tax departments projecting at least $100,000 in increased consulting costs if TCJA changes unfold in full, it’s more important than ever to understand when legal intervention is worth it and when it’s not.
At Milikowsky, we help clients make that distinction. If the cost of a legal defense outweighs the assessed tax amount, we’ll recommend paying it and avoiding unnecessary legal fees.
We’re in the business of protecting business owners not overbilling them.
- Now Is the Time to Plan
Only 60% of tax departments say they begin planning for tax law changes six months in advance. But for many small to mid-size firms, that planning window is even tighter.
Whether you’ve already identified high-risk clients or are still catching up, now is the time to:
- Review audit exposure areas
- Adjust documentation systems
- Identify a go-to legal partner to call when an audit begins
Partner With Milikowsky Tax Law
We’ve worked side by side with CPAs for more than a decade to protect business owners during state and federal tax audits. We don’t prepare tax returns; we keep businesses in business
