Key Takeaways
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IRS operations remain strained post-shutdown, with human-driven processes like appeals and correspondence facing months of backlog and staffing shortages.
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Taxpayers should use IRS digital tools — including the document upload tool, online EIN application and individual accounts — to avoid delays and preserve response timelines.
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Despite delays, deadlines remain firm — timely submissions with proof are critical to safeguard taxpayer rights amid ongoing identity verification and staffing challenges.
With the government shutdown now weeks behind us but Thanksgiving upon us, the IRS’s slow operational rebound remains a critical factor for taxpayers navigating year-end responsibilities. As the IRS resumes full operations, taxpayers and practitioners alike are bracing for a complicated recovery period. The agency faces a significant restart, with backlogs piling up and staffing stretched thin even as regular operations resume.
Below, we share some observations on how these issues may impact taxpayers.
A Gradual Return to Normal
Throughout the shutdown, many automated IRS programs kept running. These systems can issue certain notices and process payments without staff involvement, offering some continuity amid the disruption.
But the programs that depend on people — the ones that handle correspondence, appeals and taxpayer resolutions — were at a standstill. These human-driven processes are essential for resolving disputes and responding to enforcement notices, and their suspension created widespread delays that will take months to unwind.
Lean on What’s Still Working
Until the IRS clears its backlog, automated and digital tools will be the fastest route for most taxpayers. Wherever possible, make use of these tools, including:
- Document Upload Tool: Send requested materials electronically to avoid mail delays in response to certain notices.
- Online SS-4 Application: Continue applying for Employer Identification Numbers (EINs) through this online portal.
- Individual Online Account: Access account information, balances and payment history conveniently.
Identity Verification: Still a Pain Point
Identity verification remains one of the biggest frustrations for taxpayers. Even with an existing Form 2848 Power of Attorney on file, some steps still require direct taxpayer participation. The IRS’s ID.me system has made limited improvements, but many cases still end up in manual review.
If you encounter issues verifying your identity or accessing your account, connect with your tax practitioner early. These problems take significant time to resolve.
Protect Your Deadlines and Know Your Rights
Given the current uncertainty, it’s essential to keep close track of filing and response dates. Don’t assume that the IRS will automatically extend deadlines because of delays on their end. Submitting responses and documentation on time — and keeping proof of submission — helps preserve your rights and options if disputes arise later.
IRS Staffing and Leadership Changes
The shutdown’s impact extended beyond temporary closures, recently covered in our video insight Navigating IRS Disruptions. Additional layoffs occurred, particularly in the Collections division, which may slow down case resolution even further. Meanwhile, several leadership vacancies remain, with key roles filled by temporary “acting” officials who are balancing multiple responsibilities.
Much of the agency’s recent focus has been on implementing provisions of the One Big Beautiful Bill Act (OBBBA), including updating forms and publications. These updates are harder to complete without complete agency leadership. With funding approved only through January 30 — right in the middle of filing season — the IRS faces pressure to stabilize operations quickly.
Moving Forward
As the IRS rebuilds capacity, taxpayers should stay organized, rely on digital tools and document every interaction. A deliberate, well-documented approach helps avoid compounding the current delays. Lean on your professional advisors to navigate any procedural complexities.
If you’re corresponding with an IRS representative — in Appeals, Collections or Counsel — keep in mind that many are still working through significant backlogs and shifting priorities. Patience and clear communication can help keep matters moving efficiently.
Contact Us
PKF O’Connor Davies remains committed to monitoring IRS developments closely and assisting clients with their tax needs during this transition. If you have any questions, please contact your client service team or:
Kelly Morrison Lee, JD
Managing Director
Tax Controversy Practice
kmorrisonlee@pkfod.com