The American Institute of CPAs (AICPA) is urging the IRS and Treasury to release a contingency plan that retains 100% of its employees in the event of a government shutdown on January 31, 2026.
In a January 29 letter, the AICPA warned that a shutdown during the peak of the 2026 filing season would severely harm taxpayers and create unprecedented backlogs, pointing to the ongoing recovery from the October 2025 shutdown.
Another Shutdown Would Be ‘Exponentially More Detrimental’
In its Thursday letter to Treasury Secretary Scott Bessent and IRS Chief Executive Officer Frank J. Bisignano, the AICPA stated that the consequences of a shutdown during the current filing season would be catastrophic. “The negative impacts experienced during prior government shutdowns could be exponentially more detrimental to our tax system if experienced during the current filing season, thus causing substantial harm to taxpayers and resulting in backlogs that the IRS has not experienced since the pandemic,” wrote Cheri H. Freeh, chair of the AICPA Tax Executive Committee.
The letter expresses deep concern that taxpayers and practitioners may face “significant harm and overwhelming challenges” if the IRS operates with only a fraction of its workforce. This warning echoes a similar letter sent on September 29 ahead of the most recent shutdown, in which the AICPA cautioned that “operating with a fraction of its workforce during a government shutdown would result in a huge strain on taxpayers and practitioners.”
Agency Still Recovering From Previous Shutdown
The AICPA’s warning is based on recent government reports documenting the severe effects of past shutdowns and ongoing operational challenges. A memo from the Treasury Inspector General for Tax Administration (TIGTA) shows the previous shutdown exacerbated an already massive inventory backlog. TIGTA’s report reveals the IRS’ total inventory of unprocessed individual returns and correspondence more than doubled between December 2019 and December 2025, ballooning from approximately 871,000 to 2 million.
These backlogs are compounded by staffing losses during shutdowns. The agency’s own revised contingency plan from October 18 revealed that only 39,982 employees (53.8% of the workforce) were ultimately kept on board during that shutdown, a stark contrast to an earlier plan that called for retaining all 74,299 employees.
The 2025 Annual Report to Congress from National Taxpayer Advocate (NTA) Erin Collins also noted a 27% reduction in the IRS workforce between January and December 2025.
The NTA report underscores the fragility of the filing season, which relies on months of preparation. In her preface, Collins wrote that filing season “is not a single event; it is a year-round undertaking that depends on the alignment of technology, staffing, training, legal guidance, and operational execution across the IRS that begins six to 12 months before the start of the filing season.”
The AICPA agrees, arguing that the processing of tax returns and collection of revenue is a “critical government function that should continue regardless of a government shutdown, especially in the midst of an April filing season.”
Lessons From Prior Shutdowns
Citing the 2019 government shutdown, the AICPA gave a list of severe disruptions faced by taxpayers and practitioners during that period. One of the biggest impacts was the continuation of automated IRS collection notices, including notices of intent to levy and warnings of asset seizures, which proceeded without any means for taxpayers to resolve the underlying issues.
Additionally, the 2019 shutdown led to the suspension of audit, examination, and appeals activities. This halt prevented taxpayers from resolving disputes and, in many cases, stopped the accrual of penalties and interest, leaving cases in indefinite limbo.
Taxpayers also experienced unreliable online account access and a diminished ability to process critical tax documents. Further compounding the issues, taxpayers and their practitioners were unable to assist identity theft victims or address other hardship matters while IRS phone lines were inoperable. These past failures, the AICPA argues, provide are a precursor to what could happen on an even more damaging scale if the government were to shut down now.
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