How the Government Shutdown Impacts Tax Season

The current shutdown is now the longest in U.S. history, and it comes at a uniquely challenging moment. There are two parallel challenges happening at once:

1. A constrained IRS with fewer people available to answer phones, process mail, manually review accounts, and respond to notices.

2. An evolving tax landscape, as the IRS is still working to implement major tax law changes under the One Big Beautiful Bill Act (OBBBA).

   
   

Beyond politics, the ripple effects of a shutdown are operational, logistical, and real. From previous shutdowns, we saw unresolved notices, suspended audits, poor online access, and overwhelmed phone lines. These strains were felt by taxpayers and practitioners a long time after the shutdown officially ended.

You can help by proactively communicating that you and Vivify are doing everything possible to stay ahead of delays, but some bottlenecks will be beyond our control.

Proactive Communication Suggestions:

• “Your returns or refunds may be delayed, even if filed on time.”

• “The IRS might not be available to answer your question right away. Sometimes the best solution, though difficult and unnatural, is waiting.”

• ⭐ “You may receive a notice in error because the IRS hasn’t processed something. Do not panic, but communicate it to your CPA as soon as possible.”

• “OBBBA changed the rules - but not all the instructions are written yet. We’re tracking developments closely.”

• “States may also lag because many wait on IRS guidance before updating their own processes.”

• ⭐ “It’s even more imperative that you provide all information to your CPA timely this year because any errors or confusion in the filing of your return will result in additional delays due to IRS backlog.”

• ⭐ “We recommend all client create an IRS online portal to access real-time updates on notices, payments, and transcripts. Many states have similar options and we recommend those as well! (This is NEW for our Ohio friends - Open your OH state portal here!)”

We’re continuing to monitor IRS operations and guidance as the situation unfolds. While some delays are out of our control, being informed, early, and organized gives your clients the best shot at a smooth tax season.