• Aligning international tax strategy with global supply chain planning helps reduce tax exposure, capture incentives, and increase operational agility.

• Ignoring exit taxes, transfer pricing, or cross-border compliance risks can create multi-year tax liabilities, penalties, and restructuring costs.

• Involving tax leaders early in global supply chain restructuring leads to smarter decisions, improved timelines, and long-term business scalability.

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In today’s dynamic global business environment, aligning your organization’s international tax planning with supply chain planning strategy isn’t just a best practice — it’s essential. From shifting trade relationships and tariffs to increased scrutiny from global tax authorities, your company’s ability to make tax-informed supply chain decisions can directly impact cash flow, risk profile, and competitive positioning.

Here’s how your tax and operations leaders can collaborate to build a globally agile structure, and why international tax strategy must be at the core.

Why International Tax Strategy Must Drive Global Supply Chain Decisions

Mid-market organizations are rethinking their operational footprint — reshoring, nearshoring, or diversifying supplier bases. But without a clear international tax lens, these shifts can trigger unintended consequences: exit taxes, loss of treaty benefits, or transfer pricing risks.

A tax-aligned supply chain strategy allows you to:

• Forecast and manage global tax liabilities

• Capture incentives and avoid inefficiencies

• Make faster, more informed decisions across jurisdictions

Integrate International Tax Early in the Planning Process

Waiting until after operations moves are underway can leave your business with a fragmented tax structure that requires costly remediation. This is especially critical for mid-market companies operating across the U.S., EMEA (Europe, the Middle East, and Africa), or APAC (Asia-Pacific) regions, where cross-border structuring can create unexpected tax burdens. Tax should be involved from the outset — modeling scenarios across jurisdictions, projecting costs, and identifying risk exposure.

For example:

• Moving production from China to Mexico might avoid certain tariffs — but could expose your business to exit taxes in China or permanent establishment risk in Mexico.

• Relocating intellectual property (IP) from Ireland to the U.S. might trigger a deemed disposal event under local exit tax regimes.

Technology platforms and predictive models can help tax teams simulate these impacts before major decisions are finalized.

Strengthening Transfer Pricing and Global Compliance

Global tax authorities are tightening enforcement — especially around transfer pricing and cross-border restructurings. If your tax structure no longer reflects your actual operations, you may face:

• Double taxation

• Disallowed deductions

• Penalties and disputes

Update your transfer pricing documentation to reflect the new supply chain model. Intercompany agreements, economic analyses (including IP valuation), and jurisdictional reporting must all align with your post-transition structure.

Unlock Incentives Through Coordinated Strategy

Supply chain shifts aren’t just about avoiding risk — they’re also an opportunity to capture new value. Jurisdictions including the U.S., Canada, Mexico, and certain European Union countries offer targeted tax incentives for reshoring, green investment, R&D, or job creation.

If these incentives aren’t launched early in planning, your business could miss out. Tax should coordinate with operations and finance teams to explore:

• U.S. federal and state credits for manufacturing investment

• R&D credits tied to newly localized functions

• Foreign tax credits or deferrals available in new jurisdictions

Create a Globally Scalable Tax Playbook

Reactive tax planning doesn’t scale. As your organization enters new markets, integrates M&A targets, or adds new suppliers, your international tax model must be flexible and supported by a clear global tax governance framework.

A forward-looking playbook helps you:

• Align tax structure with business decisions

• Build global tax governance into location changes, IP moves, and new legal entities

• Reduce friction during rapid growth or operational transformation

The Path Forward: Strategy, Agility, and Risk Reduction

International supply chain restructuring can unlock efficiency, improve margins, and reduce geopolitical exposure — but only if tax is at the table from the start.

Organizations that treat tax as a strategic partner rather than a compliance function are better positioned to navigate volatility and create long-term value.

How MGO Can Help

At MGO, we help companies navigate the complexities of global tax strategies and cross-border operations. From international structuring and transfer pricing to tax technology and incentive optimization, we serve clients across manufacturing, life sciences, technology, and more.

We work closely with CFOs and tax executives to align tax planning with business transformation — supporting global agility, regulatory compliance, and strategic growth. Let’s talk about how your international tax strategy can support your global operations.

The post How to Align Your Global Supply Chain and International Tax Strategy appeared first on MGO CPA | Tax, Audit, and Consulting Services.

Bill: Let’s start with the fun stuff first: by day, you’re an audit partner but your not-so-secret passion is your band.  Tell me about your gig earlier this week.  

Simon: We were playing at the Harp, a bar in Newport Beach. An Irish bar and pub.  

Bill: So, what kind of stuff do you all play? 

Simon: A little bit of everything — rock, classic rock, country, punk, pop, even hip hop. Yeah, we do a Nelly song. We ended up playing until 12:30 AM that night — which is late for us old folks. 

Bill: Impressive. Now, shifting gears — you work with several manufacturing clients. What are they telling you about how tariffs are now, or could potentially, impact their business? 

Simon: Honestly, it’s one of the biggest disruptors they’re facing. Tariffs throw a wrench in long-term planning. A lot of clients had diversified out of China, moving production to countries like Vietnam, Cambodia, or Bangladesh… only to get hit with new tariffs there, too. It makes supply chain strategy feel like a moving target. One of my apparel y clients was doing great shifting manufacturing across countries. But now their strategy’s wiped. They might not make it through the year.  

Bill: That’s brutal. So, you’re telling me it’s not just a China issue anymore? 

Simon: Exactly. Tariffs have become a much broader, more unpredictable challenge. One apparel client had a solid multi-country sourcing strategy, but when U.S. tariffs expanded beyond China, their margins collapsed. They went from thriving to barely surviving, just like that. 

Bill: That’s rough. How do you advise clients to respond 

Simon: There’s no silver bullet, but flexibility, nimbleness, is key. We’re encouraging clients to build sourcing redundancy. Think “China-plus-one” or “China-plus-two.” It’s also about monitoring policy shifts closely, so they’re not blindsided. We help them plan for every scenario and understand where their risks are concentrated. But as with most things, uncertainty is the biggest challenge. Companies don’t know when or where tariffs will hit, so planning can become almost impossible.  

Bill: Are there clients that are weathering this well? 

Simon: The ones who’ve invested in agility — like tech-enabled supply chains, diverse vendors, adaptable logistics — they’re more resilient. But even they’re feeling the pressure. Tariffs are just one part of a much larger uncertainty picture, and you’ve got to stay sharp. 

In today’s volatile global trade environment, manufacturers need more than a Plan B. Let’s talk about how MGO can help you stay agile, mitigate risk, and drive growth. 

The post MGO Stories: From Rock Covers to Real Talk on Tariffs, Audits, and M&A appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• An M&A-focused audit begins with a tailored planning process that identifies the areas most relevant to the merger or acquisition.

• Evaluating internal controls helps identify operational and financial risks that could impact negotiations or valuations.

• Insights from the audit can improve financial practices and support a smoother transition after the transaction.

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When you’re preparing for a merger or acquisition (M&A), every number matters. Potential buyers, investors, and lenders need clarity on your financial statements and the integrity of your entire operation. That’s where an audit plays a crucial role.

A well-executed audit provides a clear, independent view of your financial health. It helps identify potential risks, discrepancies, or issues long before they come to the buyer’s attention and affect valuation, negotiations, or even closing the transaction.

Inside a Well-Executed M&A Audit: 6 Key Steps

Here’s a behind-the-scenes look at an M&A audit. We’ve broken the process down into six essential steps that can help head off surprises and keep your deal on track.

Step 1: Initial Planning and Scoping to Understand Your Business

Before any testing begins, there is a planning phase designed to understand your company’s operations, industry, and the purpose of the audit. In the context of a merger or acquisition, that means focusing on what matters most to the transaction. Typically, this includes revenue, profit, assets, customer contracts, vendor agreements, debt, and contingent liabilities.

During this stage, your auditor will also request a list of documents — such as prior-year financials, trial balances, accounting policies, accounts receivable aging reports, customer lists, depreciation schedules, customer contracts, leases, and loan agreements. They will also request documentation on internal control policies and procedures.

This scoping exercise helps define higher-risk areas, set materiality thresholds, and tailor the audit plan.

Step 2: Risk Assessment and Internal Control Evaluation

During the planning phase, auditors also assess how you design and implement internal controls. This step is a part of any financial statement audit, but it’s especially relevant to M&A audits because weak, inconsistent, or non-existent internal controls can signal broader financial or operational risks that could impact valuation or even derail the deal.

The audit team performs walkthroughs of key processes to understand how you recognize revenue, manage inventory, handle cash, and issue payroll and other disbursements.

If control weaknesses are identified, they are flagged so you can proactively address the issue or prepare to explain mitigating factors to the buyer before they become sticking points in negotiations.

Step 3: Detailed Substantive Testing

Substantive testing is a big part of a financial statement audit. During fieldwork, auditors thoroughly perform testing on financial data to confirm its completeness and accuracy. They’ll test balances and transactions using a combination of sampling, confirmations, analytical procedures, and inspection.

In the context of an M&A deal, substantive testing might include validating:

• Accounts receivable and major customer balances

• Inventory levels and valuation methods

• Fixed asset registers and depreciation schedules

• Outstanding debts, lease obligations, and legal liabilities

• Revenue streams and contract terms

• Adjustments and accruals

Every figure tested helps you (and potential acquirers) gain a clearer picture of your financial position and operational performance. Testing can also align with the acquiring entity’s due diligence needs.

Step 4: Identifying and Communicating Key Findings

As testing progresses, auditors document discrepancies and areas of uncertainty. Rather than waiting until the final report, auditors may share interim findings throughout the audit process and discuss the implications with you.

If issues arise — such as revenue booked before it’s earned, misclassified liabilities, or unrecorded contingent exposures — you have an opportunity to investigate, correct, or clarify questions before the deal proceeds. Early visibility into these findings allows you to improve processes and prepare responses to questions that might arise during the due diligence process.

Step 5: Final Review and Delivering the Audit Report

Once fieldwork is complete, the audit moves into the final review phase. Auditors evaluate the completeness of documentation, tie up any loose ends, and ensure audit workpapers support conclusions before issuing the audit report.

The timing of this report may align with due diligence milestones or closing deadlines for a merger or acquisition. An unqualified opinion, also known as a “clean report”, lends credibility to your financial statements and supports buyer confidence.

If the audit uncovers concerns, your management letter becomes a valuable roadmap for remediation and negotiation.

Step 6: Post-Audit Insights and Transaction Support 

A thorough M&A audit often gives insight beyond the numbers in your balance sheet, income statement, and statement of cash flows.

For example, it may uncover opportunities to strengthen documentation, update internal controls, streamline reconciliations, or improve accounting policies. All of these can prepare you for a liquidity event and serve the organization well post-transaction.

Many companies use the audit findings to prepare for future reporting requirements under a new ownership structure, particularly when transitioning to public-company standards or integrating into a larger corporate environment.

How MGO Can Help

Preparing for a merger or acquisition is a high-stakes, high-visibility moment, and a well-executed audit helps you tell a compelling story about your business.

Working through planning, assessing risk, testing data, communicating findings, delivering the final report, and drawing out insights gives you a better understanding of your position, reduces uncertainty for all parties, and helps you move forward in the transaction with greater confidence.

If you’re considering a merger or acquisition, reach out to MGO’s transaction advisory team early. Preparation is everything, and the cleaner your books, the smoother the road ahead.

The post Preparing for a Merger or Acquisition? Here’s How a CPA Firm Handles the Audit Process appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• With the early rush for market presence behind us, today’s M&A landscape is driven by strategy — whether that means developing in-house capabilities, acquiring complementary operations, or forming partnerships to scale. 

• Building a vertical operation offers control but requires major capital investment. Buying or partnering can provide quicker access to new markets, product categories, or operational strengths. 

• Most companies are blending approaches — building where they have strength, acquiring where they see opportunity, and partnering where agility or cost efficiency is key. The right mix depends on your goals, resources, and long-term vision. 

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As the cannabis industry continues to mature, the era of rapid expansion has passed. Today’s deals are more strategic — often designed to strengthen your position in a key state, fill operational gaps, expand into new product categories, or accelerate growth through vertical integration. Whether you’re aiming to deepen your capabilities or reach new markets, one key question remains: Should you build, buy, or partner? 

Build: Owning the Supply Chain from Seed to Sale 

If you’re looking to control every part of your operation — from cultivation and manufacturing to distribution and retail — building a vertical model may be your goal. Multi-state operators (MSOs) like Green Thumb Industries and Trulieve, as well as many single-state operators (SSOs), have leaned into this approach. By developing capabilities in-house, they’ve been able to reduce reliance on third parties, improve margins, and exert more control over quality and branding. 

But vertical integration isn’t simple. Building requires significant capital investment, broadened regulatory compliance, and expanded management teams with the necessary skills, knowledge and experience. If you’re considering this path, ask yourself: Do you have the time, capital, and team to make it work? If not, you may want to consider a faster route — buying or partnering. 

Buy: Acquiring the Missing Pieces of Your Business  

Buying is a powerful way to expand your reach or capabilities — especially when speed and scale matter. Acquisitions can help you enter a new market, acquire valuable IP, or achieve vertical integration. Companies like Tilray and Village Farms have used acquisitions to diversify their operations and enter new verticals. 

If you’re a retailer lacking cultivation, buying a grow operation might make strategic sense. But be aware: buying your way into vertical integration can also mean inheriting the very challenges — capital demands, regulatory complexity, operational risk — that come with building it from the ground up. You’ll need to understand your financial limitations, build accurate valuation models, and ensure any acquisition aligns with your long-term strategy. 

Start by defining what you’re missing. Are you looking to own more of your supply chain? Break into a new product category? Cement your presence in a strategic state? Once those drivers are clear, begin identifying targets that align with your goals — and run the numbers to see if the deal will create the value you need. 

Partner: Team Up to Accelerate Growth 

If you don’t have the bandwidth or resources to build or buy, strategic partnerships can fill the gap. Brands like Belushi’s Farm, Death Row Cannabis, and Cann have leaned into licensing, co-packing, and distribution partnerships to scale without the burden of full operations. 

Partnerships are also a powerful tool for entering new and complex markets. Take Oregon-based brand Alibi, for example. Rather than starting from scratch in New York, the company is cultivating its presence by partnering with licensed producers and retailers to bring its products to market. It’s a flexible and capital-efficient way to gain traction in highly regulated states. 

Partnering lets you tap into another company’s strengths — whether it’s their facilities or local market knowledge — while focusing on your brand and growth. It’s often the fastest and most flexible route to expansion. But it still requires careful due diligence. Make sure any partnership aligns with your business model, protects your brand, and has clear financial and operational terms. 

How to Choose the Best Option for You 

Whether you’re building vertically, acquiring brands, or forming partnerships, your growth moves should be guided by strategy — not just opportunity.  With continued margin pressure, tightening capital markets, and increased competition, managing capital and maximizing return on your resources is essential. 

Start with these three key questions: 

1. What are you trying to achieve? Is your goal to increase revenue, reduce overhead, enter a new market, or gain control over your supply chain? 

2. What’s your financial reality? Can you realistically build or buy? Or would a low-capital partnership be more sustainable right now? Understanding your limitations early can save you from costly missteps later. 

3. What targets align with your capacity? Whether you’re evaluating retail locations, beverage brands, or co-packing partners, a deal only makes sense if it supports your long-term goals — and you have the infrastructure to support it. 

Your choice between building, buying, or partnering should reflect not just current market conditions, but your vision for where the industry — and your company — are headed. 

How MGO Can Help 

Whether you’re exploring a strategic acquisition or evaluating a potential partnership, our dedicated Cannabis practice is here to support you. We offer tailored M&A consulting services — including due diligence, valuation, technical accounting, and integration support — to help you navigate complex decisions with confidence.  

Let’s talk about how we can help you move forward with clarity and strategy. 

The post Cannabis M&A: Build, Buy, or Partner? appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Sell-side due diligence helps maximize portfolio company value and reduce transaction risks. 

• Strategic planning and early issue resolution streamline M&A processes. 

• Tax, quality of earnings, and balance sheet reviews are crucial for successful exits. 

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You may have noticed that after a period of slower deal activity, middle market mergers and acquisitions (M&A) have ramped up and are showing signs of resurgence. Data from PitchBook’s Q2 US PE Middle Market Report indicating a 12% increase in the first half of 2024 compared to the same period in 2023. 

And following a change in administration after the recent U.S. presidential election and the Federal Reserve’s November decision to lower the benchmark federal funds rate another quarter point to a range of 4.50 – 4.75%, we expect this momentum to continue.  

We’ve already seen lower interest rates impacting the broader market. In its Q3 US PE Breakdown, which covers all US PE deal activity, PitchBook reported its highest level of estimated exits (394) since Q1 2022. The Russell 2000 Index — often viewed as a bellwether for private company valuations — rose 1.8% immediately following the rate cut and is up nearly 9% year-to-date. 

It’s expected that these tailwinds should ripple into the portfolio companies of private equity (PE) firms, as these funds look to increase exit activity, which has remained flat year-over-year. 

What You Should Expect for Middle Market Dealmaking 

Although deal activity is expected to increase, PE exits in the middle-market have stabilized as noted below but not meaningfully improved. 

Exit Backlog Should Inspire More M&A

Due to the exit backlog, many PE funds are facing increasing pressure to sell portfolio companies, or portcos, after historically long holding periods. U.S. general partners (GPs) have been waiting for more favorable exit market conditions, extending the median holding period for middle-market PE investments to a record 6.4 years in 2023, according to PitchBook. 

The exit market conditions have become more favorable, given the recent increase in the Russell 2000 Index noted previously, as well as the rise in middle-market deal multiples, which have recovered to 12.9x EV/ EBITDA from a bottom of 11.0x in 2023. Plus, the earnings of private companies have steadily improved, which should also help bolster their valuations. 

These two factors should set the stage for renewed deal activity. One could predict that a rebound in exits will power PE M&A activity in the middle market, as more funds kick off sales processes for the portcos they have been holding onto for an extended period. 

Strategics Play Important Role in Middle Market Exit Activity 

As they kick off their expected sales processes, PE funds operating in the middle market are likely to look to other sponsors and strategic buyers. 

Since Q1 2023, sponsor-to-sponsor exits have consistently outpaced exits to corporate strategics, making up over 55% of exit activity in Q1 and Q2 of 2024, excluding public listings according to PitchBook. 

But strategic buyers remain highly competitive in the middle market. In fact, 69% of fund managers and operating partners in BDO’s 2024 Private Equity Survey reported strategic investors as their top competition for deals, indicating that strategics are still highly engaged and poised to capitalize on opportunities. Moreover, 57% of respondents said they will pursue a sale to a strategic for their exits compared with 37% who cited a sale to a financial sponsor. 

Driven by the substantial dry powder accumulated over recent years ($499.4 billion for US middle market funds according to the American Investment Council and PitchBook ) PE firms are moving more quickly on deals. 

How You Can Prepare for an Exit with Sell-Side Due Diligence 

There are several things that can derail your M&A transactions—poor strategic planning, non-disclosure of material changes or events, inconsistent internal controls, and cultural disparities between the buyer and the target—to name a few. With sell-side due diligence, PE firms can address these issues before the sale process begins. Of course, deals can always fall apart due to factors outside of the sellers’ control (e.g., political changes or economic turbulence), but you should prepare your portfolio companies for exit by managing what you can control with a sell-side due diligence process. 

Sell-side due diligence helps GPs maximize the value of portfolio companies and minimize transaction risk during the deal evaluation, negotiation, and closing processes. 

When executed effectively, sell-side due diligence offers three key benefits for sellers: 

MGO’s Take: How We Think About Sell-Side Due Diligence 

Our core sell-side due diligence offering achieves two primary objectives: 

• Identifying and capitalizing on opportunities 

• Identifying and mitigating transaction risks 

We apply this approach uniformly across the seller’s financial and tax positions in relation to a potential transaction. 

1. Quality of Earnings 

Quality of earnings analysis is essential for understanding the sustainability and reliability of a portco’s earnings. 

• Identify and Capitalize on Opportunities: Analyze operating trends by business unit, product line, and customer, and bridge these results to projections. Our analysis can often identify one-time costs or possible pro forma adjustments that can increase the seller’s adjusted EBITDA. 

• Identify and Mitigate Transaction Risks: Assess the quality of earnings and identify any revenue recognition issues, cost capitalization concerns, non-recurring charges or credits, and changes in estimates or reserves that may impact the quality of reported earnings and cash flows. Evaluate all proposed earnings before interest, tax, depreciation, and amortization (EBITDA) adjustments and supporting analysis. 

2. Tax Due Diligence

Establish the portco’s tax position and address compliance with various tax obligations. 

• Identify and Capitalize on Opportunities: Determine the appropriate transaction structure for the seller and assess its impact on potential buyers. 

• Identify and Mitigate Transaction Risks: Identify tax-related risks, including federal, state, and sales tax obligations. Quantify and address potential tax exposures to avoid future liabilities. 

3. Balance Sheet Due Diligence

Evaluate the financial health of the portco to identify opportunities and risks that may affect the transaction. 

• Identify and Capitalize on Opportunities: Evaluate monthly working capital trends, focusing on balances and turnover statistics directly attributable to operations. Identify the most favorable working capital target possible for the seller. 

• Identify and Mitigate Transaction Risks: Analyze the quality of assets, the completeness of liabilities, debt-like items, and any contingent obligations. Review capital expenditure requirements and assess the sufficiency of the assets to deliver projected results.

Additional Due Diligence 

Larger deals may require additional due diligence to cover more complex transactions. In these cases, sellers may explore: 

• Workforce Due Diligence 

• Commercial Due Diligence 

• Operational Due Diligence 

• Cyber/IT Due Diligence 

• Investigative Due Diligence 

• Insurance & Risk Due Diligence 

• ESG Due Diligence

Why MGO for Private Equity Advisory 

MGO equips private equity firms with the tools to achieve successful exits. Our sell-side due diligence services focus on uncovering value, addressing risks, and preparing portfolio companies for seamless transactions. From quality of earnings analysis to tax positioning and balance sheet reviews, we guide firms through every stage of the exit process. MGO ensures compliance, minimizes deal risks, and enhances valuations, helping private equity firms maximize returns and secure favorable outcomes in competitive markets. Contact us to learn more.

The post Planning for a Successful Private Equity Exit  appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Fintech mergers and acquisitions are expected to accelerate in 2025.

• New U.S. administration to promote cryptocurrency adoption.

• Fintechs will be crucial to attract and retain younger banking customers. 

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Fintechs are poised for significant growth in 2025. Declining federal interest rates, a new presidential administration, and renewed appetite for blockchain applications will present fresh opportunities across the industry.  

But organizations also need to prepare for potential regulatory changes and their associated challenges. By deepening their understanding of these developments, companies can mitigate compliance risk, better adapt to emerging technologies, and stay competitive in a rapidly evolving market.  

1. Fintech mergers and acquisitions will rebound in 2025 

Following a modest increase in deal activity in 2024, mergers and acquisitions (M&A) activity in the fintech sector is expected to accelerate in 2025. This growth will be driven by several macroeconomic factors, including improving economic conditions and reduced regulatory uncertainty.  

As inflation declined below 3% in the second half of 2024, the Federal Reserve is expected to continue reducing interest rates through 2025, although the exact number of rate cuts remains uncertain. Lower borrowing costs, combined with expectations of M&A-friendly regulations under the new U.S. administration, will create a positive economic environment for M&A activity.  

From an investor perspective, private equity remains a key player in fintech M&A. The abundance of committed capital, along with pressure from limited partners (LPs) to realize investments and return proceeds, is expected to generate significant activity in 2025. For portfolio companies that have not yet reached valuations seen three to four years ago, private equity managers will likely pursue bolt-on acquisitions to achieve scale quickly and position these assets for sale. Additionally, we expect sellers’ price expectations to continue normalizing away from the peak valuations observed in the low-interest environment. This alignment in pricing expectations between buyers and sellers will likely increase the number of closed deals in 2025. 

Finally, the ongoing focus on embedding AI within organizations and the growing interest in digital assets and cryptocurrencies will further fuel new M&A opportunities in these sub-sectors. Companies will seek to acquire the necessary technology and talent to stay ahead of the competition. 

2. New administration to create more crypto-friendly environment 

U.S. President-elect Donald Trump expressed his commitment to establishing a pro-crypto administration, promising to make the U.S. “the bitcoin superpower of the world.” Since the 2024 U.S. election, bitcoin’s trade value continues to climb, surpassing $100k a token in December. 

As the new administration seeks to encourage the use of cryptocurrency, we expect to see an increase in regulations for bitcoin, stablecoins and other digital assets in 2025. In addition to promoting adoption, increased regulation may also enhance the government’s ability to issue bonds and manage fiscal policies. With major stablecoin companies among the biggest holders of U.S. debt, the federal government has a vested interest in strengthening digital infrastructure to drive digital currency usage.  

Some local governments are already welcoming this change, with several states proposing strategic bitcoin reserves. The City of Detroit, as another example, announced its plans to accept tax payments via cryptocurrency in 2025. At the same time, legacy businesses are embracing blockchain technologies and using Bitcoin as a treasury investment to remain competitive, signaling that digital assets are no longer optional but essential for thriving in an evolving fintech landscape. 

The rise of Bitcoin ETFs also sparks new interest in blockchain technology as traditional finance institutions seek to tokenize real-world assets. After regulatory uncertainty influenced many traditional Web 2.0 companies, including fintechs, to pause or defer their blockchain initiatives, the expectation of clearer guidance in 2025 is now prompting a resurgence. We expect institutions and Fortune 500 companies to start revisiting blockchain applications in areas like marketing, supply chain, gaming, payments, and loyalty programs, transforming what was once a headwind into a tailwind. 

3. Fintechs will be critical to capture next generation of banking customers 

The U.S. banking landscape has seen significant consolidation over the past 30 years, dropping from approximately 10,000 banks in 1994 to 4,500 in 2023. While consolidation continues to expand banks’ customer bases, institutions must also confront a new generation of customers. The great wealth transfer means that, over the next two decades, $84 trillion in assets will pass to a younger demographic with different priorities. To stay competitive and win over a customer base that values more modern, intuitive, and user-friendly financial tools, institutions will lean more on fintech to enhance customer experiences.  

Looking ahead, we anticipate more banks will prioritize centralizing services like investments, savings accounts, and credit lines into unified platforms. Asset managers, on the other hand, will increasingly turn to artificial intelligence (AI) to offer personalized portfolios, providing more tailored financial experiences to meet the needs of today’s investors. 

4. Prepare for international fintech investments to increase 

The 2024 U.S. election has already triggered significant macroeconomic shifts, including a stronger U.S. dollar. If these positive market signals continue into 2025, fintechs should anticipate a surge in global investment interest. The U.S. is still the largest fintech market today, and U.S.-based fintechs can expect to see an increase in international investments from global firms and private equity seeking to expand their market share. 

At the same time, U.S.-based fintechs will increasingly seek out fintech investment opportunities abroad. One key market to watch is India, where fintech and online banking M&A activity has been on the rise, fueled by a rapidly growing economy of 1.4 billion people. Western Europe, Africa, and Japan are also poised for an uptick in interest from U.S. fintech investors seeking growth opportunities.   

5. Blockchain and AI team up to stare down energy challenges 

AI and bitcoin mining share a common challenge: high energy consumption. Bitcoin mining operations represented 0.6% to 2.3% of total U.S. electricity demand in 2023. As institutions seek to reduce energy usage and recognize the benefits of shared infrastructure, we expect to see an increase in co-location of AI computing centers and bitcoin mining facilities in 2025. Simultaneously, decentralization in crypto can counterbalance AI’s centralization promoting privacy and equitable technological process. 

Co-location can drive multiple efficiencies, streamlining usage of expensive infrastructure AI and bitcoin mining share, such as computing hardware, cooling systems, and power supplies. Shared infrastructure also capitalizes on the natural overlap between bitcoin mining and AI activities, including repurposing excess heat generated during mining to power AI systems. AI can also enhance crypto adoption by providing sophisticated analytics while blockchain can secure AI’s data processes. While AI algorithms can analyze transaction patterns to detect fraud, blockchain can provide a secure and transparent ledger to record transactions, ensuring trust and data integrity. 

Top-line growth is another key benefit of co-location. In 2025, we predict bitcoin miners will increasingly leverage their infrastructure and energy access for AI applications to create new revenue streams and add value beyond traditional mining operations. In practice, this can include optimizing machines to switch between AI and bitcoin mining tasks. They may also leverage AI to predict maintenance needs, perform complex calculations via high-performance computing (HPC), or implement proof of useful work protocols by using blockchain systems to train machine learning models.  

6. Honorable mention: Fate of FDIC rules hang in the balance 

Following the 2024 presidential election outcome, the future of Federal Deposit Insurance Corporation (FDIC) oversight is unclear. While the Trump administration will likely ease some regulations, bipartisan support for banking-related legislation suggests that know your customer (KYC) rules will tighten in 2025. Some senators are even pushing bank regulators to strengthen fintech oversight in an effort to protect customers.  

One such proposal, the Synapse Rule, would require banks to maintain more detailed records for customers of fintech applications. However, whether this regulation will move forward under the Trump administration remains uncertain. A change in FDIC leadership would likely have the most significant impact on the regulatory landscape. As the current FDIC head is set to remain in place until 2028, the banking-as-as-service (BaaS) industry should prepare for ongoing regulatory turbulence and closely monitor the fate of proposals like the Synapse Rule. 

Bharath Ramachandran, Jack Karagulleyan and Jonathan Roberts. Copyright © 2025 BDO USA, P.C. All rights reserved. www.bdo.com 

How MGO Can Help 

MGO can offer you valuable services and support in light of BDO’s 2025 predictions. Our team of professionals can help fintechs navigate potential regulatory changes by providing guidance on compliance so you can adapt to new rules and mitigate compliance risks, as well as assist in identifying strategic acquisition targets and conducting due diligence for M&A.

When it comes to crypto and blockchain, we have experienced subject matter experts who can help you understand implement the technologies. Our assurance team can make sure your financial statements are accurate and compliant with industry standards, and our global tax team can provide guidance on international expansion, so you know what you’re getting into with foreign markets and new regulatory landscapes.

Contact us to learn more about the many ways we can help you in this realm.  

The post BDO’s 2025 Fintech Predictions appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Optimize your tax strategy with smart entity selection, state nexus planning, and compensation structures tailored for financial services firms. 

• Taking advantage of R&D tax credits, international tax planning, and transaction timing strategies can reduce liabilities and boost profitability. 

• Proactively structuring M&A deals and reviewing tax strategies annually can help you maximize savings and reinvest in growth. 

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Navigating the tax landscape in the financial services industry can be complex, but the right strategies can help you optimize your tax position and increase profitability. Whether you operate in banking, insurance, asset management, or fintech, these tax-saving opportunities can put more money back into your business.  

Here are key strategies to consider and how you can take action.  

1. Optimize Entity Structure Selection 

Carefully choosing between partnerships (LLCs/LPs), C corporations, or S corporations can significantly impact your tax liability. Partnerships offer pass-through taxation and flexibility in allocations, while C corps might be better for companies planning to go public or raise institutional capital. Your business structure impacts everything from self-employment tax treatment to international operations. Working with a tax advisor can help you determine the most tax-efficient structure for your business’s short- and long-term objectives. 

2. State Tax Nexus Planning 

With remote work now common, establishing physical and economic nexus in the right jurisdictions is critical. Centralizing certain functions in tax-favorable states while considering state-specific economic nexus thresholds can reduce your tax burden. Some states have special rules for financial services companies that can impact apportionment. Conducting a nexus review can help determine where your company may owe state taxes and identify opportunities for optimization. 

3. Employee Compensation Structure 

Designing compensation packages that balance tax efficiency with talent retention can yield tax benefits. Deferred compensation arrangements under 409A, profits interests for partnerships, stock options and restricted stock units (RSUs) for corporations, and performance-based bonus structures can all play a role in reducing tax burdens while incentivizing employees. Consulting with human resources and tax professionals can help align your compensation strategy with both business goals and tax efficiency. 

4. Leverage Research & Development (R&D) Tax Credits 

Many financial services firms invest heavily in technology and process innovation. The R&D tax credit allows you to offset the cost of developing new software, improving cybersecurity, or enhancing proprietary trading algorithms. Qualifying activities may include risk management systems, customer-facing platforms, and process automation tools. Reviewing your technology and operational improvements with a tax professional can help you identify qualifying activities and maximize your credit. 

5. International Tax Planning 

For companies with international operations or investors, strategic tax planning can help reduce exposure to double taxation. Establishing appropriate holding company structures, utilizing treaty benefits and withholding tax planning, managing global intangible low-taxed income (GILTI) and Subpart F income exposure, and structuring foreign operations to minimize the global tax burden are all critical considerations. Working with a knowledgeable international tax professional can help you optimize your cross-border tax strategy. 

6. Transaction Timing Strategies 

Carefully timing the recognition of income and expenses can provide significant tax benefits. Strategies such as accelerating deductions when beneficial, deferring income recognition where possible, considering mark-to-market elections where advantageous, and planning major transactions around tax year timing can all impact your overall tax liability. Proactive planning can help align your income and expense recognition with favorable tax periods. 

7. Mergers and Acquisitions (M&A) Structure Planning 

Whether buying, selling, or merging, structuring transactions strategically can maximize tax efficiency. Considering asset versus stock sale implications, tax attributes like net operating losses (NOLs) and credits, and reorganization alternatives under Section 368 can significantly impact tax liability. Consulting M&A tax advisors early in the transaction process can optimize tax outcomes. 

Stay Proactive to Optimize Your Tax Savings 

Tax-saving opportunities exist across the financial services industry, but taking a proactive approach is key. By implementing the right strategies and working with tax professionals, you can reduce your tax burden and reinvest in your business’s growth. Reviewing your tax strategy annually can help you take advantage of available incentives and deductions. 

How MGO Can Help 

Our dedicated Financial Services team can help you uncover tax-saving opportunities tailored to your business — whether you’re optimizing entity structure, managing state tax nexus, leveraging R&D credits, or planning M&A transactions. With deep experience across banking, asset management, fintech, and insurance, we provide insights and solutions to help you stay ahead in a rapidly evolving landscape. Reach out to our team today to learn how we can help align your tax strategy with your long-term business goals. 

The post 7 Tax-Saving Opportunities in the Financial Services Industry appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Rescheduling cannabis could unlock new merger and acquisition opportunities that companies need to strategically prepare for.
• Sellers should focus on optimizing financials, tax implications, and valuation to maximize exit outcomes.
• Buyers must conduct thorough diligence, structure tax-efficient deals, and plan for post-acquisition integration.

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The potential rescheduling of cannabis from Schedule I to Schedule III could open up increased opportunities for mergers and acquisitions (M&A) in the industry. Navigating this new M&A landscape will require strategic preparation.

Whether you are looking to sell your company or acquire new assets and operations, you will need to position your business to properly capitalize on this wave of investment activity. Careful planning is critical to maximizing outcomes.

Preparing for M&A in a Post-Rescheduling World

As you anticipate this regulatory change, it is crucial to prepare for the complexities of the M&A process. Here is how you can position your company to take full advantage of upcoming opportunities.

Exit Strategies: Key Steps for Sellers

1. Books and Records Remediation

To attract investors, your financial records need to be in order. Focus on preparing your financial statements and building a comprehensive data room that investors can easily review. Solid financial reporting will not only boost investor confidence but also help you stand out in the marketplace.

2. Tax Optimization

Understanding the tax implications of a transaction is essential. Structure your deals to minimize tax liabilities and maximize financial outcomes. Engage with tax professionals early in the process to help you achieve the best possible financial results.

3. Audits and Reviews

Depending on the size and nature of the transaction, having audited or reviewed financial statements may be necessary. Even if not required, these statements can increase the likelihood of closing a deal, improve pricing, and reduce the time needed to finalize the transaction.

Acquisition Strategies: Essential Considerations for Buyers

1. Diligence

Conducting thorough diligence is crucial for identifying potential risks associated with an acquisition. This includes financial and tax diligence to uncover any issues that could impact deal terms, pricing, or strategy. Understanding these risks upfront will enable you to make more informed decisions.

2. Structuring

Designing a tax-efficient acquisition structure is key to the transaction’s success and the long-term health of the combined entity. Work with advisors to develop structures that optimize tax outcomes and operational efficiency.

3. Post-Deal Integration

Post-acquisition integration is critical for realizing the anticipated benefits of the deal. Strategic guidance and practical support during this phase will help you optimize both operational and financial performance, leading to a smooth transition and better overall outcomes.

Smart M&A Moves for Buyers and Sellers Alike

1. Quality of Earnings (Q of E) Assessments

A Q of E assessment provides a comprehensive evaluation of a company’s financial performance. For buyers, a Q of E offers valuable insights into the target company’s financial health, facilitating informed decision-making and risk mitigation. For sellers, this detailed analysis helps you identify key negotiation points, leading to better pricing and more favorable deal terms.

2. Strategic Guidance

Both buyers and sellers can benefit from strategic M&A advice tailored to your specific business goals. Engaging with experienced advisors can provide you valuable insights and help you navigate the complex M&A landscape, positioning your company to take full advantage of any opportunities that arise from rescheduling.

How MGO Can Help

With a dedicated Cannabis team and a comprehensive suite of services, MGO is here to help you navigate the complexities of M&A — both now and in a post-rescheduling world. Reach out to our team today for support at every stage of the M&A process.

The post Rescheduling M&A Opportunities for Your Cannabis Business appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• The potential rescheduling of cannabis presents an opportunity to reevaluate your company’s tax structure and increase deductions, reduce income, and simplify accounting.
• Rescheduling may open up access to previously unavailable tax credits, incentives, and deductions at various government levels.
• With anticipated increased investment and cash flow after rescheduling, companies should prepare for potential mergers and acquisitions by seeking support in areas like financial due diligence and post-acquisition planning.

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The rescheduling of cannabis from Schedule I to Schedule III will unlock new opportunities for cannabis businesses. Is your company positioned to capitalize?

Tax Restructuring

If your existing operating structure was optimized for Section 280E mitigation, now is the time to evaluate whether it will still be tax-efficient after rescheduling.

MGO’s dedicated cannabis tax team can analyze your current structure and identify opportunities to increase deductions, reduce income, simplify accounting, and eliminate unnecessary tax exposures. We will help you develop a strategy specific to your business needs that aligns with your operational goals and any regulatory considerations.

Tax Credits, Incentives, and Deductions

Rescheduling should open cannabis operators to a world of previously unavailable tax benefits.

Our tax professionals can comprehensively review your business operations to uncover tax credits, incentives, and deductions that you may qualify for at the federal, state, and local levels.

Financial and Internal Control Audits

While rescheduling will eliminate the Section 280E tax burden and attract new investors to the cannabis industry, it could also lead to a new regulatory framework.

Our audit services can provide assurance to investors that your company is effectively managing risks, complying with any regulatory changes, and maintaining transparency.

Mergers and Acquisitions (M&A)

The projected wave of investment and increased cash flow resulting from rescheduling means more M&A should be on the horizon.

If your company is considering an M&A deal (either as a buyer or seller), MGO can support your efforts with structuring, financial & tax due diligence, Quality of Earnings (QoE) assessments, accounting integration, strategic guidance, and post-acquisition planning.

With a dedicated cannabis team and a comprehensive line of services, MGO can help you take full advantage of the benefits made available by rescheduling. Reach out to our team today.

The post Is Your Cannabis Company Ready to Take Advantage of Rescheduling? appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Internal controls, especially around fraud prevention, are essential for limiting losses, driving efficiency, improving accountability, and boosting company value during investments or M&A deals.
• The “tone at the top” from leadership in fostering an ethical environment, along with proper segregation of duties, are key elements for fraud prevention and strong internal controls.
• Well-established policies and procedures, like Delegation of Authority rules and restricted system access protocols, are also vital for maintaining adequate controls to enable company growth.

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As the economy stands on shaky legs, private equity and venture capital firms are necessarily careful and strategic when assessing potential investment opportunities. Whether your long-term plan includes acquiring another company, selling your business, or seeking new capital, strengthening your internal control environment — with a focus on preventing fraud — is a powerful way to increase actual and perceived value.

In the following, we will lay out the reasons why fraud prevention is an essential element to proper corporate governance and illustrate key areas to examine whether your internal control environment is built to help your operation succeed.

The Importance of Internal Controls in Fraud Prevention

A robust internal control system is the first step toward managing, mitigating, and uncovering fraud. A strong internal control environment will:

Protect your company’s assets by reducing the risk of theft or misappropriation of cash, inventory, equipment, and intellectual property.

Detect fraudulent activities or irregularities early on and deter employees from attempting fraud in the first place.

Provide cost savings by limiting opportunities for financial losses, costly investigations, and legal expenses associated with fraud.

Drive operational efficiency by providing clear processes and guidelines that reduce the risk of errors or inefficiencies in day-to-day operations.

Improve employee accountability by implementing checks and balances that discourage unethical behavior.

When seeking an investment or undertaking a significant M&A deal, you should have a firm grasp of the strength and quality of your internal control environment. Not only will you reduce the risk of fraud in the near term, but you will also cultivate confidence with potential investors and M&A partners.

Fraud Prevention Starts with the “Tone at the Top”

The first key element to look for in measuring the strength of your internal controls is ensuring a clear and proactive “tone at the top”, meaning an ethical environment fostered by the board of directors, audit committee, and senior management. A good tone at the top encourages positive behavior and helps prevent fraud and other unethical practices.

There are four elements to fraud: pressure, rationalization, opportunity and capability.

Pressure motivates crime. This could be triggered by debt, greed, or illegal deeds. Individuals who have financial problems and commit financial crimes tend to rationalize their actions. Criminals may feel that they are entitled to the money they are stealing, because they believe they are underpaid. In some cases, they simply rationalize to themselves that they are only “borrowing” the money and have every intention of paying it back.

Criminals who can commit fraud and believe they will get away with it may just do it. Capability means the criminal has the expertise as well as the intelligence to coerce others into committing fraud. The board of directors is responsible for selecting and monitoring executive management to ensure best practices are in place to limit the motivations of all four elements of fraud.

Proper Segregation of Duties for Internal Controls

The second key element to look for in your internal controls is a well-established segregation of duties. The idea is to establish controls so that no single person has the ability that would allow them the opportunity to commit fraud. Companies must make it extremely difficult for any single employee to have the opportunity to perpetrate a crime and subsequently cover it up.  

Fraud Controls 

There are three types of controls that help manage the risks of fraud: preventative, detective, and corrective.

• Preventative controls seek to avoid undesirable events, errors, and other occurrences that an enterprise has determined could have a negative material effect on a process or end product. Preventative controls are the best of the three as they are the first line of defense and a backstop to fraud. If designed correctly, preventative controls stop an undesirable event from even happening.  
• Detective controls exist to detect and report when errors, omission, and unauthorized uses or entries have already occurred. Although it is important to identify these adverse events, you are doing so after the fraud has already been committed.  
• Corrective (also referred to as compensating) controls are designed to correct errors, omissions, and unauthorized uses and intrusions once they are detected.  

Preventing Misappropriation of Assets 

An important component of segregation of duties is to prevent the misappropriation of assets and reduce fraud risk. Below are some examples of best practices for various types of assets: 

• Cash Receipt: segregate the receipt of cash/checks and the recording of the journal entry in the accounting system into two roles.
• Accounts Receivable: segregate the responsibilities of recording cash received from customers and providing credit memos to customers. (If one person performs both functions, it creates the opportunity to divert payments from the customer to the employee and then cover the theft with a matching credit to the customer’s account).
• Cash Reconciliation: the individuals who authorize, process, or record cash should not perform the bank reconciliation to the general ledger.
• Inventory: individuals who order goods from the suppliers should not have the ability to log the goods received in the accounting system.
• Payroll: segregate the responsibilities of compiling gross and net pay for payroll, with the responsibilities of verifying the calculation. (If a single individual performs both functions, it allows for the opportunity to increase personal compensation and the compensation of others without authorization. It also provides an opportunity to create a fictitious payee and make corresponding payroll checks).

The Importance of Policies and Procedures

The third key element to look for in your investees is well-established policies and procedures. Make sure that any company you consider acquiring has basic policies and procedures in place, such as Delegation of Authority (DOA).

The DOA is a policy where the executive team delegates authority to the management of the company. Individuals should be considered appropriate to fulfill delegated roles and responsibilities. The DOA should be reviewed at least annually. Subsequently, it is important to ensure that the DOA is being followed, and that approvals do not deviate from it. Any such anomalies should be rare and, when they do occur, they need to be reviewed and approved. Constant deviations from the DOA may be a sign that the DOA needs to be restructured.

A second essential policy and procedure is restricted computer and application access. This is to protect sensitive company financials and proprietary data. The company should have a robust control environment and maintain computer logins and password access on a need-to-know basis. Access should only be granted by the owner of the application or system and subsequently logged by the administrator. Now more than ever companies are hiring remote employees. This shift in the dynamic workspace further emphasizes the need for a quality IT controls environment.

How We Can Help

As you prepare your company for future growth, getting an impartial third-party opinion on your internal control environment can be a powerful tool for finding gaps and inefficiencies, and implementing value-added changes.

Our dedicated Public Company teams offer a deep level of industry experience and technical skills. We can help prepare your company for a major capital raise, including going public via an IPO or RTO. Or we can help optimize value for an M&A deal, whether you are buying or selling. Contact us today to access an external, holistic vision focused on helping you grow and succeed.

The post Internal Controls: Keys to Limiting Fraud and Boosting Your Company Value appeared first on MGO CPA | Tax, Audit, and Consulting Services.