CPA Practices NAICS 541211

Jul 16, 2025 - CPA Licensing on the Decline

• CPA credentialing is declining across all company sizes, reflecting a shift in corporate hiring practices and licensing trends, according to INSIDE Public Accounting. Between 2020 and 2024, the average amount of corporate staff that held a CPA license dropped from 56% to 48%. Larger companies report even lower CPA licensing among staff at 41%. The trend is driven by fewer accounting graduates taking the time to complete the 150 hours of required training for a license, as well as firms expanding into non-traditional markets that require different skill sets than traditional accounting. Several states have created different pathways to CPA licensure - such as Ohio, Georgia, and Minnesota - acknowledging the existing process is too expensive and time-consuming. Alternative licensing pathways typically involve graduation with an accounting degree combined with experience in the field and passing a CPA exam.
• The accounting industry is alarmed at a tax rule change in H.R. 1, the reconciliation bill currently under debate in 119th Congress. The bill will limit the passthrough entity state and local tax deduction (PTET SALT) for certain service trades. PTET SALT is a tax workaround that allows small businesses in professional services industries to avoid the $10,000 SALT deduction limit introduced in 2017 tax legislation. The new bill blocks professional service partnerships (accounting firms, law firms, consulting, medicine, dentistry) from using the deduction. Since other industries would still be able to utilize PTET SALT to lower tax bills, professional services partnerships feel it is a targeted and unfair limitation, opposed by the American Institute of Certified Public Accountants and CPA societies in 53 states and territories. The American Bar Association estimates the tax change will cost professional services firms about $73 billion over the next ten years.

• CPA practices face a staffing shortage after several years of attrition through retirements and middle-aged CPA burnout that has left the accounting industry about 300,000 workers short with not enough fresh recruits to replace them. The US Bureau of Labor Statistics shows CPA firm employment flat throughout 2024 and into 2025, coming in at -0.3% in April year over year. The shortage is likely to affect CPAs and taxpayers alike. CPAs are overloaded with work - which makes them prone to mistakes and filing errors - leaving many without the bandwidth to take on new clients. Those lost clients can then potentially make their own mistakes doing taxes themselves, creating a domino effect of accounting headaches. The problem could be compounded by the IRS itself, which was already lacking enough accountants to efficiently process 2024 tax returns only to face a 30% auditor staff cut by the Trump administration.
• The Internal Revenue Services (IRS) cut more than 30% of its auditors in early 2025 due to buyouts and layoffs from the Department of Government Efficiency. The cuts disproportionately affected revenue agents - those conducting audits and going after possible tax cheats - with the IRS shedding 3,600 of those jobs and significantly impacting the government’s ability to collect tax revenue. A report from the Treasury Inspector General for Tax Administration found that auditors found about $32 billion worth of additional tax revenue in 2023. Auditors make the agency about $6 for every $1 spent on high-income taxpayer audits, per the National Bureau of Economic Research. So many auditors being cut loose risks revenue losses for the government if tax evaders know they are not being scrutinized as before. The Yale Budget Lab forecast a loss of $159 billion over 10 years if staff cuts reach 18,000 IRS employees.