The Financial Accounting Standards Board (FASB) successfully defused political pressure to rescind the rules issued in 2023 onincome tax disclosure(Topic 740). The spending bill signed this week by President Donald Trump did not include a provision from an earlier proposal that threatened FASB funding—which would have prevented the U.S. Securities and Exchange Commission (SEC) from reviewing or approving the FASB budget if the standard were not withdrawn.The spending billdid not include an earlier provision that threatened FASB funding—which would have blocked the SEC from reviewing or approving the FASB budget if the standard were not withdrawn.

As an independent body, FASB is primarily funded byaccounting support feespaid by public companies, along with publication revenue and investment income. However, a spending proposal released by House Republicans this summerhad sought to pressure FASB into withdrawing the standard by cutting off funding channels.had sought to pressure FASB into withdrawing the standard by cutting off funding channels.

At a broad press conference on Wednesday, when asked by a reporter whether the standard might be withdrawn if it faced serious pressure, FASB Chair Richard Jones did not explicitly rule out such action, but sidestepped the controversy and insisted on the standard-setting body's rulemaking process.

"I can't speculate, but I can tell you that the standard has been issued, is effective, and companies will adopt it in their year-end financial statements," Jones said. He also noted that the standard-setting work on the project is complete, but the board is "always happy" to discuss the standards it sets and the reasoning behind them.

"I think we have one role—to do financial accounting and reporting to promote capital markets," Jones said. "That's what we focus on, and we're always happy to communicate with parties on any concerns about the standards."

FASB spokesperson Christine Klimek said in an email Thursday that FASB has not recently received a formal request from lawmakers to withdraw the income tax standard. Formal requests to modify standards are typically handled through the board's agenda request process. Klimek also said the SEC reviews the FASB budget and then issues an order "confirming that the FASB's annual accounting support fee complies with Section 109 of the Sarbanes-Oxley Act."

The income tax disclosure standard has come into focus again this year as public companies face their first year of compliance. But this is not the first time the standard has drawn opposition.

As early as 2023, FASB completed the new income tax disclosure standard amid opposition from some companies and politicians. That year, 15 Republican House members urged the board towithdraw the planned new requirements, claiming the standard update couldharm U.S. multinational companies"because their foreign competitors would gain more insight into U.S. companies' operations and tax strategies," CFO Dive previously reported.

The new rules require companies to disclose more detailed information in their income tax reporting. For example, companies must report jurisdictions (such as countries or states) where they pay more than 5% of their total tax payments.

Neil Bass, a certified public accountant and managing member at Bass Tax Group in Parsippany, New Jersey, said the likelihood of the income tax proposal continuing to be discussed during consideration of the next government spending bill in 2026 is relatively low. Bass advised CFOs and companies to assume the new disclosure rules will remain in effect.

"The first year of implementation will involve a lot of work," Bass said, adding that most of the information companies already have—it just needs to be collected and organized.

More broadly, the issue has raised concerns about FASB's independence. Jack Castonguay, an associate professor of accounting at Hofstra University in New York, said the most recent similar political battle he recalls was in the early 2000s, when many in Congress opposed FASB's update requiring companies to recognize stock options granted to employees as expenses at fair value in their income statements. But he described the current political threat to FASB as "unprecedented."

"I worry this fits a trend in this Congress and the Trump administration of politicizing capital market institutions that have largely been insulated from direct political pressure, threatening their independence and their ability to make decisions, standards, and rules that meet market needs rather than the needs of politicians and donors," Castonguay said in an email.

Thomas Georges, policy and communications officer at the nonprofit FACT Coalition, also said FASB's role in setting these disclosure rules should be free from political interference. The organization works to combat money laundering, tax evasion, and financial secrecy.

However, he said that given the new disclosures from the income tax standard will be released in January or February of next year, he expects the standard will not face sustained attacks. "Companies are already in the process of complying with the new standard, and once the first round of disclosures is released, I doubt there will be a willingness to revisit the funding restriction provision," Georges said.