As the federal government shutdown extends past three weeks, tax practitioners face an unprecedented challenge preparing for filing season while the Internal Revenue Service operates at barely 40% capacity. With approximately 60,000 employees furloughed and critical services suspended, the upcoming tax season demands a fundamentally different approach.
The IRS began the year with about 100,000 employees but now has only 39,870 working after accounting for resignations, retirements, and furloughs. The enforcement divisions suffered the deepest cuts, with roughly 75% of Large Business and International Division revenue agents furloughed, 67% from Small Business/Self-Employed, and 85% from Tax-Exempt and Government Entities.
The IRS posted an update Tuesday clarifying that while electronic filing for Form 1040 will continue and error-free returns with direct deposit will be processed automatically, most other services are severely limited or suspended. Tax refunds will generally not be paid during the shutdown except through automated processing. All walk-in Taxpayer Assistance Centers are closed, live telephone support is minimal, and appointments for Appeals and Taxpayer Advocate Service cases are canceled. Tax Court proceedings are stayed indefinitely. Furloughed employees cannot work at all, even voluntarily, creating a complete communication breakdown for unresolved taxpayer issues.
The practical impact for practitioners will be severe. Consider a client who receives a notice claiming they owe additional amounts for late filing despite having proof of timely submission. Typically resolved through standard procedures, such issues will now languish indefinitely. "We need to take action, and it's just not happening as expeditiously as taxpayers need," Hodges noted. Different departments cannot communicate effectively, and the resolution staff are furloughed.
This crisis makes the guidance from last week's "Strategic Client Engagement for Peak Tax Season Performance" presentation at the October Future Forward 2025 conference more relevant than ever. The presentation outlined proactive strategies that can help practitioners navigate reduced IRS services while maintaining efficiency.
The presentation's core recommendation is launching a 120-day proactive communication plan immediately. Begin personalized client outreach now, segment clients by complexity and value, and set clear deadline expectations. Emphasis is on early engagement to reduce peak-season bottlenecks by 40-60%, a move that will be critical when IRS support is unavailable.
Technology becomes essential when government services fail. The presentation stressed adopting secure client portals with bank-level encryption, automated email and SMS reminder sequences, and integrated e-signature capabilities. With IRS walk-in centers closed and phone support gutted, your portal becomes the primary channel for document collection. The data supports this approach: 78% of clients prefer uploading documents online, and 82% expect secure digital communication.
The presentation also recommended strategic client segmentation to allocate limited resources effectively. Focus high-touch service on complex, high-value clients who will face the most significant IRS delays, while leveraging automation for straightforward returns. Implementing early-bird incentives and clear boundary-setting around rush fees will help to shift client behavior toward earlier submission.
Most importantly, the presentation urged practitioners to position themselves as year-round tax partners rather than seasonal preparers. With the IRS essentially unavailable for problem resolution, clients will depend entirely on their practitioners for guidance, planning, and issue management.
The shutdown's duration remains uncertain, but the cascading effects will extend well beyond any resolution date. Practitioners who implement proactive communication strategies, invest in robust technology infrastructure, and segment their client base strategically will emerge from this crisis with stronger practices and more satisfied clients. Those who wait for the government to resume normal operations may find themselves overwhelmed when the backlog hits.
Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and provides strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.
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