📅 2026 Update: Key Changes in External Auditing and Taxes

Since the original article was written, there have been several important updates related to external auditing and tax rules. These changes affect how individuals and businesses handle their taxes, especially in light of recent legislation passed in 2025. Read on to discover what has changed and how it may impact your tax situation.

The earlier article continues further down the page.

📈 Standard Deduction Increases

The One, Big, Beautiful Bill Act (OBBBA), enacted on July 4, 2025, made substantial changes to the basic standard deduction amounts. For taxable years starting after December 31, 2024, the standard deduction is now:

  • 💰 $15,750 for single filers and married individuals filing separately
  • 🏠 $23,625 for heads of household
  • 👨‍👩‍👧‍👦 $31,500 for married individuals filing jointly and surviving spouses

These increases can lower taxable income significantly.

🔒 Tax Rate Permanency

The OBBBA also made the existing tax rates permanent. The same seven tax rates are still in effect for individual taxpayers: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. This stability helps taxpayers plan for their future tax liabilities.

👩‍💼 Gig Economy Worker Deductions

A new deduction introduced by the Working Families Tax Cuts allows eligible gig economy workers to deduct up to $25,000 in qualified tips from their taxable income for tax years 2025 through 2028. This change aims to support those in the gig economy by reducing their taxable income.

⏳ Processing Times for Forms

For certain forms, the IRS has improved processing times. For example:

  • 📄 Form 1023-EZ: 80% of applications submitted by February 24, 2026, will be processed within 22 days.
  • 📄 Form 1023: For applications submitted by January 12, 2026, 80% will be processed within 191 days.

These quicker processing times can help taxpayers receive timely responses.

📌 Summary of Key Changes

  • 📈 Standard deduction amounts have increased significantly.
  • 🔒 Tax rates remain unchanged and permanent.
  • 👩‍💼 Gig economy workers can deduct qualified tips up to $25,000.
  • ⏳ IRS processes certain forms faster than before.
  • 📅 Tax regulations are evolving, impacting individual and business tax responsibilities.

💡 Tips for Navigating Tax Changes

Review the details of your own situation with your attorney.

📊 Understand the New Standard Deductions

Be aware of the increased standard deduction amounts. This can impact how much tax you owe and whether you should itemize deductions.

🗓️ Stay Informed About Tax Rate Changes

The tax rates have not changed, but knowing they are permanent can help you with future tax planning. Keep track of any potential changes in tax legislation.

💼 Utilize Gig Economy Deductions

If you work in the gig economy, check if you qualify for the new deduction for tips. This can significantly lower your taxable income.

📄 Keep Track of Form Submission Dates

Filing forms like Form 1023 and Form 1023-EZ on time can ensure faster processing. Mark deadlines on your calendar to avoid delays.

📞 Use Available Resources

Consider reaching out to the Taxpayer Advocate Service if you encounter issues with the IRS. They can provide support and help resolve problems.

🏆 Top Tax Services Ranked by User Reviews (2026)

This section highlights services that can assist with tax-related matters, focusing on external auditing and tax preparation. The order follows Trustpilot data checked in October 2026, and while star ratings are helpful, they reflect only part of user experiences. Unhappy customers tend to leave more reviews, which can skew perceptions.

🥇 1. Tax Hive

Tax Hive has a Trustpilot score of 4.8. It has been known for providing tax planning and strategy services, especially for entrepreneurs. However, some reviewers mention limited information on customer service responsiveness, which can be a concern for new clients.

🥈 2. Expatfile - US Expat Taxes Made Simple

Expatfile holds a Trustpilot score of 4.8. This service specializes in tax preparation and consultation for expatriates. While many users appreciate the service, some note that its pricing can be higher than competitors, so potential clients should compare options.

🥉 3. TaxAudit

TaxAudit has a Trustpilot score of 4.7. It is known for IRS audit representation and tax debt relief assistance. However, some users report slow response times, which may impact the overall experience for clients needing immediate help.

🆓 Free Government Assistance

The Taxpayer Advocate Service (TAS) offers free help for individuals experiencing issues with the IRS. They work to resolve problems and suggest improvements for the future. Additionally, taxpayers can access their IRS online accounts to view records and check the status of returns.

🔎 Choosing the Right Tax Service

  • 📈 Look for services that specialize in your specific tax situation.
  • 💬 Check user reviews for insights on responsiveness and service quality.
  • 💲 Compare pricing among different services to find what fits your budget.
  • 🔍 Evaluate the type of tax planning or auditing support offered.

❓ Frequently Asked Questions

❓ What is the new standard deduction amount for 2026?

The standard deduction has increased to $15,750 for single filers, $23,625 for heads of household, and $31,500 for married individuals filing jointly.

📅 How long does the IRS have to collect taxes?

The IRS generally has 10 years from the date your tax was assessed to collect any owed taxes, penalties, and interest.

📝 What should I do if I disagree with an IRS audit finding?

If you disagree with an audit finding, you can appeal the decision internally with the IRS or seek assistance from the Taxpayer Advocate Service for guidance.

⌛ How quickly can I expect a response from the IRS on my form submissions?

Processing times vary, but 80% of Form 1023-EZ applications are determined within 22 days as of 2026. For Form 1023, it can take up to 191 days for 80% of applications.

📞 Where can I get help with tax issues?

You can reach out to the Taxpayer Advocate Service for independent assistance with IRS-related problems. They provide resources and support for taxpayers.

📊 Can gig economy workers deduct tips on their taxes?

Yes, gig economy workers can now deduct up to $25,000 in qualified tips for tax years 2025 through 2028, which can help reduce their taxable income.

⚖️ Recent Court Cases Related to Taxes

Recent court rulings have addressed various tax issues, including audits and compliance with IRS regulations. These rulings can provide insights into how tax laws are applied in practice and may influence future auditing processes.

For more details, feel free to browse more rulings on the news page.

End of October 2026 Update





A Brief Guide to External Auditing


External auditing is an essential concept in the world of finance and accounting. It refers to the process of examining a company's financial records and ensuring that they accurately represent its financial position and performance. In other words, external auditing helps to provide an unbiased and independent assessment of a company's financial statements.

In this article, we will explore the definition and importance of external auditing, the different types of audits, the roles and responsibilities of auditors, the auditing process, and some key benefits of external auditing. This guide aims to educate readers on the basics of external auditing and provide a better understanding of its role in the business world.

What is External Auditing?


External auditing is a process that involves an independent auditor reviewing a company's financial statements to ensure they are accurate and reliable. The financial statements include the balance sheet, income statement, statement of cash flows, and statement of changes in equity. External auditors aim to provide an unbiased and independent opinion on these financial statements, which helps to build trust and confidence in the company's financial performance and position.

Why is External Auditing Important?


External auditing is important because it helps to maintain the integrity of financial reporting and prevent fraud. By having an independent auditor examine a company's financial statements, investors, regulators, and other stakeholders can rely on the information presented. In addition, external auditing can help identify areas for improvement in a company's financial controls and reporting processes. This can lead to the implementation of better practices and greater transparency, benefiting both the company and its stakeholders.

Types of Audits


There are several types of audits that external auditors can perform. Each type has a specific objective and can provide valuable insights into a company's financial position and performance. Here are the most common types of audits:

1. Financial Statement Audit: This is the most common type of audit, where an external auditor examines a company's financial statements to ensure they are accurate and reliable. The auditor will check for errors, misstatements, and omissions, and ensure that the financial statements comply with relevant accounting standards and regulations.

2. Compliance Audit: This type of audit focuses on ensuring that a company complies with specific regulations or policies. Examples of compliance audits include tax compliance audits, environmental compliance audits, and health and safety compliance audits.

3. Operational Audit: This type of audit examines a company's operational processes and procedures to identify areas of improvement. An operational audit can help a company improve efficiency, reduce costs, and tighten its internal controls.

4. Forensic Audit: This type of audit is conducted to investigate suspected financial fraud or irregularities. The forensic auditor will follow a specific set of procedures to gather evidence, test hypotheses, and report its findings to relevant stakeholders.

Roles and Responsibilities of Auditors


Auditors are responsible for ensuring the accuracy and reliability of a company's financial statements. They must conduct their work independently and impartially, and adhere to relevant accounting and auditing standards. Here are the key roles and responsibilities of auditors:

1. Plan and Perform Audits: Auditors must plan and perform audits in accordance with relevant standards and regulations. They must identify high-risk areas, gather sufficient evidence, and perform tests to ensure the accuracy and reliability of financial statements.

2. Report Findings: Auditors must report their findings to relevant stakeholders. This includes providing an opinion on the accuracy and reliability of financial statements, identifying areas for improvement in a company's financial controls and processes, and reporting any suspected fraud or irregularities.

3. Maintain Independence: Auditors must maintain their independence from the company being audited. This means avoiding any conflicts of interest, ensuring that their work is free from bias, and adhering to relevant ethical standards.

The Auditing Process


The auditing process typically involves several steps, including planning, fieldwork, and reporting. Here is a brief overview of the auditing process:

1. Planning: During the planning phase, the auditor will gather information about the company being audited, identify areas of risk, and develop a plan for the audit. The plan will include the scope of the audit, the procedures to be followed, and the timelines for completion.

2. Fieldwork: During the fieldwork phase, the auditor will visit the company, gather evidence, and perform tests to ensure the accuracy and reliability of financial statements. The fieldwork phase involves auditing the financial records, interviewing relevant personnel, and reviewing internal controls.

3. Reporting: After completing the fieldwork, the auditor will prepare a report of its findings. The report will include a summary of the audit, the auditor's opinion on the accuracy and reliability of financial statements, and any areas for improvement identified during the audit.

Benefits of External Auditing


External auditing can provide several benefits to a company and its stakeholders. Here are some key benefits of external auditing:

1. Improved Financial Reporting: External auditing helps to ensure that a company's financial statements are accurate and reliable, which builds trust and confidence in the company's financial performance and position.

2. Enhanced Business Processes: External auditing can identify areas for improvement in a company's financial controls and processes, leading to better business practices and greater transparency.

3. Compliance with Regulations: External auditing ensures that a company complies with relevant accounting and auditing standards and regulations, reducing the risk of legal and financial penalties.

4. Fraud Detection and Prevention: External auditing can detect and prevent financial fraud, helping to protect the company and its stakeholders.

Conclusion


External auditing is an essential concept in the world of finance and accounting. It helps to maintain the integrity of financial reporting, prevent fraud, and provides an independent assessment of a company's financial position and performance. With robust external auditing practices in place, companies can build trust and confidence with investors, regulators, and other stakeholders.

Internal audit helps a company or organization achieve their stated goal or objectives. By using a systematic procedure to analyze the business’s process, procedures, and activities, an internal audit can determine any organization issues that could be negatively effecting the company and suggest solutions that may benefit them.

An internal audit may include looking at financial reports, deterring fraud, investigating fraud, protecting assets, and checking that the company is remaining compliant with laws. An internal audit may result in the advisement of the head of the management. If this does occur an internal auditor may speak to the head of the management and direct them on how to better execute responsibilities amongst the staff.

An external audit is an audit that is done on financial statements of a company, individual, government branch, or an organization. An external audit allows for users of these companies or organizations to view the audit report. The public may rely on an external audit due to the fact that they are unbiased and are an independent evaluation. An external audit differs from an internal audit due to two main reasons.

First, an external audit expresses an opinion in regards to the company’s financial statements. Secondly, an internal audit focuses primarily on the responsibility of the management; where as an external audit does not. Instead an external audit will focus more on numbers and financial statements.  The main reason for an external audit is to understand the opinion of the auditor in regards to the company’s finical statements.