NOVEMBER 2025

NEWSLETTER

How The 2025 Government Shutdown

Could Impact The Upcoming Tax Season

On October 1, 2025, the U.S. federal government entered a shutdown after Congress failed to pass a funding bill. The effects are already being felt across agencies—and the Internal Revenue Service (IRS) is among those that will see impacts. While it’s too soon for definitive predictions, here’s what our clients should keep in mind heading into the 2025 filing season.

1. Limited operations, furloughs, and staffing cuts. The IRS is working with a skeleton crew and even though tax notices and tax bills are still going out, there may not be anyone to answer questions or help with notices. There is currently a large backlog of of taxpayer inquiries, paper processing and correspondence and this is likely to get much worse the longer the shutdown continues.
2. Slower release of guidance and regulatory updates. This was already going to be a challenging tax season with all the new laws and regulations from the One Big Beautiful Bill Act (OBBBA), now with the shutdown the forms necessary for completing tax returns will be delayed, the software will then be delayed in getting updated, meaning we will be delayed starting our processes.
3. Critical services are still operating. Despite the shutdown, the IRS has affirmed that tax filing and payment obligations remain in force and must still be met on time.

What you need to do:

• Start getting organized now . Organizers will go out in mid January and should be completed and returned with your documents no later than March 13. Anyone sending in documents after that deadline will have an extension filed on their behalf.
• Be sure to complete or confirm your banking information in the organizer. The IRS is phasing out issuing and accepting paper checks, and encouraging taxpayers to use direct deposit. You will be asked in the tax organizer to confirm or submit direct deposit information. Direct deposit will ensure that you will receive your money as seamlessly as possible.
• Document communications. If you make payments, file returns, or receive notices, keep detailed records in case of disputes or delays.

One of the main concerns with this coming tax season is the new tax laws that were enacted with the OBBBA and how the forms necessary to complete a tax return are created and distributed to parties across the country. Here is a little insight on how new laws affect tax return processes. We hope this knowledge will help you understand any delays or setbacks that we will face beginning in January. With every day the government shutdown continues, this process will likely be further delayed

Key steps in the process:

1. Legislative changes and guidance: Tax law changes, often passed by Congress, are the most significant factor leading to new or revised forms. For example, the Tax Cuts and Jobs Act of 2017 led to a major redesign of the Form 1040, eliminating the 1040-A and 1040-EZ. In addition to legislation, the IRS issues official guidance that may require form updates.
2. Drafting and collaboration: The IRS drafts new forms and corresponding instructions. The agency works closely with the tax professional community and tax software developers, as these groups are responsible for preparing a large volume of returns. The forms are designed to accommodate both paper and electronic filing, with a "building block" approach using additional schedules for more complex returns.
3. Public comment period: The IRS publishes draft versions of forms, instructions, and publications on its website, typically in the fall before the relevant tax year. The public, including taxpayers, tax professionals, and advocacy groups, can submit comments to the IRS to suggest improvements, identify issues, or comment on reducing paperwork burdens.
4. Finalization and publication: The IRS reviews all comments and makes final revisions. This is an interactive process, and draft forms cannot be used to file a return. The final forms and publications are released once the review process is complete. The IRS ensures that the final versions are consistent with official printed forms and do not have an adverse impact on processing.
5. Preparing for filing season: With the final versions published, tax software companies can finally update their programs, and the IRS prepares for the upcoming filing season.

The government shutdown means that every process involving federal agencies—from issuing forms and providing guidance, to reviewing and refunding submitted returns—is delayed. If you usually file early to get your refund and already have plans for how you’ll use that money, we suggest preparing for a possible delay in receiving your refund. Delays are likely, and planning ahead can help you avoid frustration.

It is important to know that our internal deadlines will not change and we will continue to process and work through tax returns as much as possible despite any delays from the government. It will required a great deal of patience from everyone while we work through the next six months. We will continue to update you as we get closer to the beginning of the year and throughout tax season as we get more guidance and information. Our deadlines are as follows

March 13th - Organizers and documents due in office.

March 14th-April 15 - Organizers and documents turned in will have an extension filed.

April 15th - IRS deadline for 1040 returns

Charitable Deduction Opportunity for Non-Itemizers

in 2026 and Beyond

Starting with the 2026 tax year, taxpayers who claim the standard deduction (non-itemizers) will be able to deduct up to $1,000 ($2,000 for joint filers) in cash contributions made to qualified public charities. This new deduction is in addition to the standard deduction and is not available for gifts to donor-advised funds or supporting organizations. Only cash gifts to public charities qualify. The deduction is taken below the line—meaning it reduces taxable income, but not adjusted gross income (AGI). This provision is a permanent change and replaces the temporary, lower deduction that was available during the COVID-19 pandemic years for non-itemizers.



Clients who do not itemize should consider this opportunity when planning charitable giving for 2026 and future years.