October Nuggets - a little something for everybody
So what in the world is going on with this shutdown? About 45% of IRS workers have been sent home. That’s on top of the exodus we’ve been seeing because of people retiring. Which brings about the age-old important question: so what?
My #1 fear is that this will severely impact the 2026 tax season.
There was a BIG tax bill passed this year. I don’t think the IRS/software is ready. The shutdown isn’t going to help them get ready.
We’ve already been warned (before the shutdown) that tax season may start later next year. I think this will impact that even further.
The IRS always closes e-filing around mid-November and doesn’t open back up until filing opens (usually the last Monday in January). I think we’re going to see this extended this year. If the shutdown doesn’t end until some time in November, I don’t see them opening back up for a couple of weeks to catch up on what they missed, then moving forward with their normal “quiet season”.
There is still about half of the workforce left, but honestly, I don’t know what they’re doing. I don’t know if they furloughed agents or janitors or people in the mail room or some of each. So I don’t know what’s going to happen if we need to get in touch with them.
Computers generate notices; people respond to notices. It is entirely possible that the IRS will continue to send out notices with no personnel involvement. Then when we want to talk to someone to figure out what’s going on, they may not be available to talk to us.
Also, keep in mind that the IRS issues forms that we have to use (1099s, W2s, tax forms, etc.). If they aren’t working, those forms aren’t going to be designed/prepared/approved and we’re going to be waiting to be able just to get returns ready, much less filed.
The only other thing I can think to tell you is to stay tuned. The only time I’ve ever heard of the tax dates being moved in my life was during Covid. If the IRS stays shut down for a while, if they lose employees, if their software isn’t ready, can we be expected to have all tax returns filed on time? It’s doubtful. We’ll just have to see what happens.
As always, when I know it, you’ll know it.