Congress failed to pass legislation to fund the federal government for 2026 by the September 30, 2025, deadline, resulting in a government shutdown. At BrownWinick, we continually monitor and analyze how this may affect our clients who have matters pending with the Internal Revenue Service (IRS) and other administrative agencies within the Federal government.
During a government shutdown, basically all non-essential work stops. However, federal agencies should have contingency plans in place, allowing essential services to continue.
In light of this government shutdown, the IRS released its contingency plan – with funds from the Inflation Reduction Act, nearly 75,000 IRS employees will continue working as normal for the first five business days, through Tuesday, October 7th. If the shutdown continues longer, the IRS plans to furlough nearly half of its workers.
First and foremost, it is important to be aware that, even with a shutdown, taxes and other payments are still due at their prescribed times – there is no grace period to pay the government. Additionally, penalties and interest continue to accrue, and automated notices most likely will continue to be sent to taxpayers.
Based on what we have seen with prior government shutdowns, we are expecting delays or limited assistance in the following several areas.
- Delays with processing extended 2024 tax returns due September 30, 2025, and October 15, 2025 (trusts and individuals), tax-exempt organization returns due November 17, 2025, and expatriate tax returns due December 15, 2025.
- Direct assistance from the IRS will be limited. If you have a matter pending before the IRS currently, it will likely take additional time and effort to resolve that matter while the shutdown continues.
- Delays in implementation, updates, and guidance relating to recent legislation, including the One Big Beautiful Bill.
- Lastly, if the shutdown continues for a significant period of time, we anticipate delays in IRS updates to various forms and systems.
As a reminder, while a government shutdown may affect IRS operations, the usual deadlines remain in place. Continue to meet your tax obligations promptly, including making all necessary filings and payments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
