Journal of Accountancy Podcast Shutdown concerns, the quest for tax guidance, the future of IRS service
Oct 8, 2025
Melanie Lauridsen, Vice President of Tax Policy & Advocacy at the AICPA, discusses the looming implications of a government shutdown on IRS operations. She highlights the contrast between the IRS's definition of filing season and the reality faced by tax practitioners. Lauridsen also sheds light on the IRS's controversial decision to phase out paper tax refunds and its potential impact. Additionally, she reveals estimated cost savings from preserving the state and local tax deduction, emphasizing the importance of guidance for upcoming tax provisions.
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Shutdowns Are Funding Lapses With Real Costs
- Government shutdowns are lapses in appropriations that have occurred since 1976 and evolved into full shutdowns after 1981.
- Shutdowns compress filing seasons and create delays, backlogs, and hardships for taxpayers and practitioners.
Plan For Filing Season Compression
- Prepare for compressed timelines because the IRS contingency plan treats filing season differently than practitioners do.
- Track IRS contingency updates closely and plan workloads for potential furlough impacts.
Five-Day Staffing Window Creates Uncertainty
- The IRS contingency plan initially allowed full staffing for five business days, creating uncertainty after that window closed.
- Employees may be furloughed without pay and historically receive retroactive pay, but that's not guaranteed by statute.