AICPA calls for fully staffed IRS regardless of shutdown length

The IRS should keep all employees on the job even during a government shutdown that extends beyond the five working days covered in the agency’s contingency plan, the AICPA said Friday.

The Senate is set to vote again on a funding bill today, one day before IRS funding is scheduled to end. Taxpayers, C corporations, and tax advisers must meet an Oct. 15 filing deadline, then work begins on the next tax filing season, Melanie Lauridsen, the AICPA’s vice president–Tax Policy & Advocacy, said in a news release.

“An extended government shutdown during this important filing deadline will compound this anxiety if the IRS is not 100% staffed,” Lauridsen said.

Also, guidance for the new tax law, H.R. 1, P.L. 119-21, commonly known as the One Big Beautiful Bill Act, could be delayed, the AICPA said. The combination of tax deadlines, the start of a new filing season, and guidance needed for H.R. 1 means the consequences of a drastically reduced IRS workforce would be dire, the AICPA said.

“Even a partial shutdown of the IRS for an extended period is deeply concerning, and we urge the IRS to retain its full staff until the shutdown is over,” Lauridsen said.

The IRS contingency plan said the agency will use money from the Inflation Reduction Act of 2022, P.L. 117-169, to keep over 74,000 employees working during the first five business days of a government shutdown, which began Wednesday and would end Tuesday. Federal employees who work during a shutdown are not paid until the shutdown ends.

The IRS’s original Inflation Reduction Act funding, $79.4 billion over 10 years, was reduced to $37.6 billion through congressional cuts as of March, according to an August report by the Treasury Inspector General for Tax Administration. As of March 31, the IRS had spent about $13.8 billion of that funding, the report said.

In a letter dated Sept. 29 and addressed to Treasury Secretary Scott Bessent, who’s also the acting IRS commissioner, the AICPA recalled the stress that the most recent government shutdown, 35 days in 2018–2019, caused on the tax system, including:

• Taxpayers continued to receive automated IRS collection notices, notices of intent to levy, and warnings of asset seizures with no means for resolution.
• With audit, examination, and appeals activities suspended, taxpayers were unable to resolve disputes and to stop penalties and interest from accruing.
• Taxpayers and their practitioners experienced unreliable online account access, varying ability to make electronic payments, and an inability to process critical tax documents.
• Taxpayers and their practitioners could not assist identity theft victims or address hardship issues when the IRS phone lines were not operating, and the IRS phone lines experienced significantly heavier call volume and, therefore, longer wait times upon resumption of operations.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.