The American Institute of CPAs (AICPA) submitted a letter to the Department of the Treasury, the Internal Revenue Service (IRS) and US congressional leadership requesting the release of the IRS contingency plan that would go into effect in the event of a government shutdown on 1 October 2023.

Additionally, the AICPA has urged the IRS to base any decision to furlough employees on a broader interpretation of the Office of Management and Budget guidance to include not only the government’s safety of human life and protection of property, but also for the taxpayer, thereby excepting IRS employees.

“We believe that tax practitioners, a critical stakeholder and partner with the IRS, should have the opportunity to provide feedback on, as well as prepare for, the IRS’s plan, and possibly advise their clients on potential consequences of a shutdown,” the letter says.

The letter goes on to express concern that an October shutdown of the government will likely impact the timely processing of extended 2022 tax returns due by Oct 16, 2023, tax-exempt organisation returns due 15 November 2023, and expatriate tax returns due 15 December 2023, as has happened with previous government shutdowns.

“We are deeply concerned that a government shutdown with the IRS operating at only a fraction of what is deemed to be its essential workforce would result in a huge strain on taxpayers and practitioners,” says the letter, highlighting the various impacts that a drastically reduced workforce would have on taxpayers and practitioners.

“We recognise that processing of tax returns and collection of money is a critical government function that should continue regardless of a government shutdown. Therefore, at a minimum, taxpayers should have recourse to protect their rights and property. The IRS keeping more essential positions working during the shutdown would help make the 2023 extended filing season operate as smoothly as possible and allow for a smooth start to the 2024 filing season,” the letter notes in closing.

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