US Tax and Stablecoin Accounting Updates: What the August 2026 Legislative Round Means for Firms and CFOs
Just before breaking for August recess, Congress, the Treasury, and several courts produced a cluster of rulings and proposed rules that accounting firms, CFOs, and auditors cannot afford to leave in their reading pile. The most significant for crypto-adjacent practices are Treasury's proposed stablecoin regulations and FinCEN's permanent BOI exemption for domestic entities, but four other developments touch partnership tax, digital advertising, drone tariffs, and IRS processing capacity. Here is a structured breakdown of each item and its practical accounting or tax implication.
Treasury Proposes Payment Stablecoin Rules: What Stablecoin Accounting Must Reflect
The US Department of the Treasury released proposed regulations that would implement restrictions on the issuance, offer, and sale of payment stablecoins in the United States. The proposal covers three core questions: who may issue a payment stablecoin, the conditions under which stablecoins may be offered or sold to US persons, and the rules foreign issuers must satisfy to access US markets.
For accounting firms and CFOs, the proposed rules are not merely a licensing matter. They directly shape how stablecoin positions should be described, disclosed, and classified on financial statements. If a stablecoin held by a client or on a corporate treasury does not come from a permitted issuer once these rules take effect, that position carries regulatory risk that may need to be flagged in notes or in going-concern assessments.
Classification and measurement implications
Current US GAAP requires most crypto assets, including stablecoins, to be measured at fair value with gains and losses recognised in net income under ASC 350-60, the standard that came into effect for most calendar-year entities in 2025. Payment stablecoins pegged one-to-one to the US dollar are often assumed to carry minimal fair-value volatility, but the proposed rules introduce a new dimension: counterparty and regulatory risk attached to the issuer's authorisation status.
Firms running digital asset accounting software should consider whether their chart-of-accounts structure distinguishes between stablecoins issued by a permitted domestic issuer, stablecoins issued by a compliant foreign issuer under the proposed rules, and stablecoins that fall outside both categories. That distinction is likely to matter for disclosure quality even before the rules are finalised.
USDC accounting: the permitted-issuer question
Clients holding USDC or similar regulated stablecoins will want confirmation that their preferred instruments will qualify under the final framework. The proposed rules have not yet been finalised, so the permitted-issuer list is not settled. Firms advising on USDC accounting should monitor the Treasury's comment process closely and flag the open question in any digital asset accounting memo produced before the rules are adopted.
For a detailed analysis of the underlying GENIUS Act framework that these proposed rules implement, see our earlier coverage of Treasury's GENIUS Act stablecoin rule proposal and what accounting firms must assess now, and the separate piece on what the GENIUS Act public comment period means for stablecoin compliance.
FinCEN Permanently Exempts Domestic Entities from BOI Reporting
Final regulations from the Financial Crimes Enforcement Network (FinCEN) permanently exempt domestic entities and US persons from beneficial ownership information (BOI) reporting requirements. The final rule largely codifies the interim relief that FinCEN issued in March 2025. It also exempts foreign reporting companies from the obligation to report US person company applicants, and it eliminates the requirement for US persons holding FinCEN identifiers to update previously submitted information.
BOI obligations for certain foreign entities operating in the United States remain in place. For accounting firms that manage BOI compliance workflows for clients with cross-border structures, that carve-out matters: the question is no longer whether a purely domestic LLC must file, but whether any foreign entity in the same group structure still does.
Crypto firm implications
Many crypto-native businesses operate through layered structures, sometimes with a foreign holding entity and a domestic operating entity. Under the final rule, the domestic operating entity is permanently exempt, but the foreign holding entity may still be a reporting company if it is registered to do business in the United States. Firms should audit client structures against this bifurcated regime rather than applying a blanket exemption. Any crypto bookkeeping software or compliance workflow that auto-populates BOI status should be updated to reflect the permanent exemption for domestic entities and the continuing obligation for qualifying foreign companies.
Fifth Circuit Redraws the "Limited Partner" Line for Self-Employment Tax
The Fifth Circuit Court of Appeals, in a case previously known under a different name before the partnership changed its name, issued a significant ruling on IRC §1402(a)(13), the provision that allows limited partners to exclude their distributive share of partnership income from self-employment tax. The court granted rehearing, withdrew its earlier opinion (which had defined a limited partner as one with limited liability), and replaced it with a new standard.
Under the new standard, a "limited partner" for §1402(a)(13) purposes is a partner who plays no significant role in managing or running the business. This departs from both the earlier Fifth Circuit view and the Tax Court's position that the exception applies only to passive investors. The court remanded the case for further consideration under the new test.
What this means for partnership structures
The ruling narrows the practical scope of the limited partner exception for active participants in a business who happen to hold interests through a limited partnership or similar vehicle. Partners in fund structures, professional services LLPs, and crypto venture vehicles who rely on §1402(a)(13) to limit self-employment tax exposure should have their arrangements reviewed against the new "significant role" standard. Accounting firms with partnership clients in the Fifth Circuit should treat this as a priority review item, particularly where the previous limited-liability-based analysis was the principal basis for excluding income from self-employment tax.
Maryland Digital Advertising Tax Struck Down: A Signal for Multi-State Planning
The Maryland Tax Court ruled that Maryland's digital advertising gross revenues tax violates the federal Internet Tax Freedom Act (ITFA) and the dormant commerce and due process clauses of the US Constitution. In three related cases involving Apple, Google, and Peacock TV, the court held that digital and non-digital advertising services are sufficiently similar to make Maryland's tax an impermissible discriminatory tax on electronic commerce. The court also found that the tax's reliance on global revenue thresholds and rates unfairly discriminates against interstate commerce. Companies are entitled to refunds of taxes paid for 2022.
For CFOs and tax directors at companies with digital revenue streams, the ruling matters beyond Maryland. It establishes a precedent that state digital services taxes structured around global revenue thresholds face serious constitutional headwinds. Any multi-state tax provision that assumed Maryland's tax would survive should be revisited.
Other Regulatory Developments Worth Tracking
IRC §987 simplification for CFCs
Proposed regulations would simplify the application of IRC §987, the foreign currency gain or loss rules, to controlled foreign corporations. The guidance is intended to reduce the administrative burden of tracking and recognising foreign currency gain or loss within CFC-owned foreign branches and disregarded entities. Multinationals and asset managers with CFC structures should review the proposal alongside their current §987 methodology.
Form 1041-A filing relief for certain trusts
A separate set of proposed regulations would eliminate the Form 1041-A filing requirement for trusts whose only charitable deduction under IRC §642(c) arises from charitable contributions made by a pass-through entity in which the trust holds an interest. Split-interest trusts would instead satisfy their reporting obligations through Form 5227. Firms with trust and estate practices should note this as a potential simplification of annual filing workflows.
Retirement plan rollover standardisation
IRS guidance proposes sample forms and procedures to simplify and standardise retirement plan rollover transactions, including greater coordination between distributing and receiving plans and expanded use of electronic transfers. The guidance seeks comment on phasing out participant-delivered rollover checks and establishing rollover safe harbours. Plan sponsors and their advisers should engage with the comment process if they have strong views on the operational implications.
IRC §45Q carbon capture safe harbour expansion
IRS guidance expands an existing safe harbour under IRC §45Q to cover qualified carbon oxide used as a tertiary injectant in enhanced oil and natural gas recovery projects. It also permits the safe harbour to be used for recapture determinations when EPA reporting systems are unavailable. Energy clients with carbon capture projects should review whether the expanded safe harbour improves their §45Q credit position.
ICE Endex qualifies as a §1256 exchange
An IRS revenue ruling confirms that ICE Endex, a regulated exchange in the Netherlands, qualifies as a "qualified board or exchange" under IRC §1256(g)(7)(C), provided it maintains a valid CFTC Foreign Board of Trade registration. Contracts entered into on or after September 1, 2026 are eligible for §1256 mark-to-market treatment, and taxpayers may adopt the change on a cut-off basis without filing Form 3115. Clients trading eligible ICE Endex contracts should update their tax position accordingly.
Drone tariffs effective September 3, 2026
A presidential proclamation under Section 232 of the Trade Expansion Act imposes a 100% tariff on larger drones, drone docking stations, and certain components, and a 25% tariff on smaller drones and additional components, effective September 3, 2026. An incentive programme for domestic drone manufacturing is also included. Clients in logistics, agriculture, or infrastructure with drone procurement plans should factor these costs into capital budgets and depreciation schedules.
Disaster loss and wildfire relief codified
The Senate passed legislation that permanently codifies favourable tax treatment for certain disaster-related personal casualty losses arising from major disasters occurring between December 28, 2019 and January 1, 2027, and extends the exclusion from gross income for qualifying wildfire relief payments related to federally declared wildfire disasters occurring before January 1, 2027. Individual clients who received wildfire relief payments should confirm that their payments qualify before excluding them from gross income.
IRS processing: paper returns still delayed
A GAO report found that the IRS processed most 2026 tax returns at rates comparable to recent years, but paper return processing slowed materially due to staffing reductions and system issues. Taxpayers relying on paper returns faced longer processing times and delayed refund checks. Firms should advise clients to file electronically wherever possible and set realistic expectations for paper refund timelines.
Priorities for Accounting Firms and CFOs
Taken together, the August 2026 package presents a concentrated workload. Here is a suggested prioritisation for practices with crypto-adjacent or digital asset client bases.
| Development | Action Required | Timeline |
|---|---|---|
| Treasury stablecoin proposed regulations | Review client stablecoin holdings against proposed issuer eligibility criteria; update accounting memos and disclosure notes | Before finalisation; comment period open |
| FinCEN BOI permanent exemption | Audit cross-border client structures; update BOI compliance workflows for foreign entities still in scope | Immediate |
| Fifth Circuit §1402(a)(13) ruling | Review partnership clients in Fifth Circuit for exposure under "significant role" standard | Before next SE tax filing |
| ICE Endex §1256 qualification | Update tax position for clients with eligible contracts; no Form 3115 required | From September 1, 2026 |
| Drone tariffs | Revise capital expenditure budgets and depreciation models for drone-dependent clients | Before September 3, 2026 |
For practices managing stablecoin accounting across multiple clients, the proposed payment stablecoin rules are the item that demands the most immediate attention. The framework will shape how digital assets are classified, disclosed, and audited once finalised, and early engagement with the comment process gives firms the opportunity to shape outcomes that affect their client base.
Source: Forvis Mazars
Frequently Asked Questions
How do Treasury's proposed stablecoin regulations affect USDC accounting under US GAAP?
Under ASC 350-60, stablecoins are already measured at fair value. Treasury's proposed rules add a second dimension: the regulatory status of the issuer. If a stablecoin is held from an issuer that does not qualify under the final framework, that position may carry disclosure or going-concern implications beyond the fair-value question. Firms should separate permitted and non-permitted issuer positions in their digital asset accounting software and flag the open issuer-eligibility question in client accounting memos until the rules are finalised.
Does the FinCEN BOI permanent exemption cover crypto firms structured as domestic LLCs?
Yes, domestic entities are permanently exempt from BOI reporting under the final regulations. However, if a crypto firm has a foreign holding entity that is registered to do business in the United States, that entity may still be a reporting company. Practices should audit layered structures rather than applying a blanket exemption, and update any compliance workflow accordingly.
What is the practical effect of the Fifth Circuit's new §1402(a)(13) standard on fund managers?
Fund managers and other active business operators who hold interests through limited partnership structures and who previously relied on limited liability as the basis for excluding distributive shares from self-employment tax face increased exposure. The new "significant role" standard focuses on actual business involvement, not legal liability. Any arrangement built on the old limited-liability rationale should be reviewed by a qualified tax adviser before the next self-employment tax filing.
Are the ICE Endex §1256 changes relevant to crypto derivatives traders?
Directly, only for traders holding eligible ICE Endex contracts. More broadly, the ruling is a reminder that §1256 mark-to-market treatment, including the 60/40 long-term/short-term capital gains split, depends on the exchange qualifying under the statute. Traders in other non-US futures markets should verify that their exchange holds a valid CFTC Foreign Board of Trade registration before assuming §1256 treatment applies.
How should accounting firms communicate the stablecoin proposed rules to clients who hold stablecoins on a corporate treasury?
The immediate step is a written memo documenting the current stablecoin position, the issuer's likely eligibility under the proposed framework, and the accounting treatment applied under ASC 350-60. The memo should note that the rules are proposed, not final, and that the permitted-issuer list may change. Firms should also flag the memo to the client's audit committee or board where the position is material, so that disclosure decisions can be made with full awareness of the regulatory uncertainty.