Given the lapse in federal appropriations and the absence of a funding agreement, a partial government shutdown has been triggered—creating uncertainty for taxpayers, businesses, and the accounting profession.
Current Status
The government remains in a partial shutdown without a clear timeline of when a funding will be agreement will be reached.
IRS Implications
As the shutdown extends beyond the supplemental funds available to the IRS, the agency has furloughed many of its employees and stopped most of its operations. In its updated contingency plan, the IRS outlined steps to mitigate some of the impacts of a shutdown, including continued focus on providing essential guidance related to the 2025 OBBB tax provisions.
What This Means for CPAs and Clients
Filing deadlines remain firm, but processing and response times may lengthen
IRS guidance on new legislation may be delayed, creating additional uncertainty
Software and technology partners may face coordination challenges tied to IRS disruptions
CalCPA encourages members to proactively set client expectations regarding potential delays in IRS correspondence and guidance.
Advocacy and Professional Support
The profession, led by the AICPA, has been actively engaging with federal agencies and lawmakers to reduce the impact of the shutdown on taxpayers and practitioners. Together, the profession has:
Urged the federal government to keep IRS employees working throughout the shutdown, citing the upcoming Oct. 15 tax filing deadline for C corporations and individuals with extensions.
Emphasized that reduced IRS staffing could delay new legislative guidance, create taxpayer confusion, and disrupt the start of the 2026 filing season.
Warned that limited staffing, as seen in prior shutdowns, can lead to unresolved notices, suspended audits, limited online access, and overwhelmed phone lines-placing additional strain on taxpayers and practitioners alike.
CalCPA shares these concerns and will continue to monitor developments closely. We fully support the AICPA’s advocacy efforts and remain committed to keeping our members informed as new information becomes available.
Impact on Other Key Federal Agencies
Securities and Exchange Commission (SEC): During the shutdown, certain SEC functions will remain operational, including:
Systems funded through government contracts such as EDGAR, IARD, and CRD.
Acceptance of public comments, though they will not be reviewed until funding is restored.
A limited number of staff will continue handling emergency enforcement, litigation, examination, and market monitoring functions.
Department of Commerce and Tariffs:
Designated employees working on tariff-related issues—including trade negotiations and implementation of existing tariffs—are deemed essential and will continue to work during the shutdown.
U.S. Customs and Border Protection will continue collecting tariffs, which are deposited into the Treasury’s general fund.
The Treasury general fund remains frozen until Congress passes legislation to fund the government.
Public Company Accounting Oversight Board (PCAOB):
The PCAOB is not funded through the federal appropriations process and will remain fully operational during the shutdown.
However, since PCAOB rules require SEC approval, any formal actions or approvals are expected to be paused until the SEC resumes normal operations.
Helpful Resources
To help members stay informed and navigate the effects of the shutdown, the AICPA has developed several helpful resources:
AICPA Shutdown Landing Page: Navigating the Government Shutdown
Journal of Accountancy: IRS furloughs some employees, closes most operations
JoA Podcast: Shutdown concerns, the quest for tax guidance, and the future of IRS service
Tax News FAQ: Preparing for a potential government shutdown: What tax practitioners should know
AICPA Comment Letter: Requesting IRS Contingency Plan for Possible Government Shutdown
Stay Informed
The government funding situation continues to evolve. Both CalCPA and the AICPA are monitoring developments closely and will provide timely updates and resources to help members and their clients manage through this period with clarity and confidence.
