AICPA lobbies the Internal Revenue Service (IRS) due U.S. government shutdown impact on U.S. taxpayers and tax practitioners

The U.S. government shutdown is now into its 16th day, creating confusion and havoc in the U.S. tax community across the globe.

The AICPA commented earlier today that fears are growing for the accumulating effects of the shutdown.

Last week the AICPA made its second batch of recommendations to the acting Commissioner of the Internal Revenue Service, Hon. Scott Bessent. The first round was made in late September 2025.

The recommendations were made in a letter signed by the Chair of the AICPA Tax Executive Committee. Copies were furnished to the Members of the Senate Committee on Finance, Members of the House Committee on Ways and Means, and the National Taxpayer Advocate, IRS.

The recommendations contained in the letter are:

1. That the IRS implement fair, reasonable, and practical relief procedures to mitigate the negative impact of the shutdown on taxpayers and their practitioners.
2. That the IRS discontinue compliance actions and halt automated collection activities of liens and levies until at least 60 days following the end of the shutdown.
3. That the IRS does not continue notice and collection activities, especially automated activities, during a government shutdown, unless the agency has its full resources available.
4. That the IRS ensure that all its online systems and accounts, including EFTPS, E-services, and CAF systems continue to operate effectively, so as to ensure tax payments and filings are processed timely, and taxpayers and tax practitioners have access to the taxpayer accounts during the shutdown.
5. That the IRS prioritises ensuring that all online systems and accounts are up and running, especially during the extended 2025 filing season.
6. That the IRS offer a separate and modified reasonable cause penalty waiver for taxpayers impacted by the shutdown.
7. Penalty relief stemming from the shutdown should be separate and distinct from a first-time abatement (FTA) administrative waiver.
8. Eligibility for FTA should not be affected in future years if the taxpayer was granted penalty relief due to the shutdown.
9. The unique circumstances of a government shutdown merit a separate and streamlined reasonable cause penalty waiver process for compliance issues resulting from the government shutdown, not reliance on the FTA programme.
10. That the IRS engage in a robust public awareness campaign of any such reasonable cause penalty waiver process to ensure that taxpayers and their practitioners can utilise the relief offered.
11. That the IRS provides to taxpayers affected by the shutdown relief from:

• the estimated tax penalty if they paid (i) at least 70% of the tax due for the current year, or (ii) 70% (90% if adjusted gross income exceeds $150,000) of the amount of tax shown on their prior year’s U.S. tax return; and

• the late payment penalty of their timely requested an extension of time to file their income tax return and paid at least 70% of the taxes owed with the request.

12. That if IRS extends limited and targeted estimated tax and late payment penalty relief to all taxpayers affected by the shutdown it will proactively mitigate the negative impact experienced by the tax administration system. This in turn will alleviate some of the negative consequences of a shutdown occurring during the 2025 extended filing season. In addition, it will increase the likelihood of a timely start to the 2026 filing season.[1]

The AICPA Tax Committee made a presentation to its members earlier today. This occurred as part of an AICPA webinar covering key aspects of the impact of the shutdown across all U.S. government agencies.  More on that to come ASAP.

[1] Source: AICPA letter to Hon. Scott Bessent, Acting Commissioner, Internal Revenue Service, October 9, 2025