AICPA Town Hall Podcast Summary

Episode Title: Special Edition: Government Shutdown State of Play
Podcast: AICPA Town Hall
Date: October 30, 2025
Hosts: Mark Peterson (EVP, Global Advocacy, AICPA), Melanie Lauridsen (VP, Tax Advocacy, AICPA)

Overview

This special edition episode provides a comprehensive update on the ongoing federal government shutdown, now in its 30th day. Hosts Mark Peterson and Melanie Lauridsen analyze the current state of negotiations in Congress, the practical impacts across federal agencies (especially IRS), and policy pressures mounting as critical deadlines approach. Recommendations to mitigate harm to taxpayers and practitioners during the shutdown are also discussed, alongside resources and guidance for members.

Key Discussion Points & Insights

1. Congressional Negotiations & Political Dynamics

• Current Funding Situation:
  • The House has already passed a short-term funding extension to November 21st, but the Senate has failed multiple times (13 attempts) to pass it (00:45–02:20).
  • Senate requires 60 votes to pass funding; a few Democrats have crossed the aisle, but not enough.
• Key Dates:
  • Nov. 1 and Nov. 15 are critical: upcoming paydays for troops and federal employees. These dates apply financial and political pressure to resolve the impasse (03:10–03:55).
• Sticking Points in Negotiations:
  • Democrats' version ties extension to permanent ACA premium tax credits and Medicaid, and adds restrictions on funding rescissions.
  • Talks of substituting temporary ACA credit extensions have been turned down.
• Presidential Role:
  • President is currently abroad and “hasn’t really participated in the negotiations” (04:11).
• Notable Quote:
  • “The facts and circumstances are different [in each shutdown]... the big inflection points are the 1st and the 15th because that’s when whether the troops are going to get paid or not.” — Mark (03:21)

2. Impact on Federal Programs & Employees

• Essential Workers:
  • TSA, air traffic controllers, and troops are still working without pay; funding has been shuffled to cover some previous paychecks, but sustainability is waning (04:05–04:45).
• Nutrition Program Disruption:
  • SNAP and WIC could see "real challenges" delivering subsidies past November 1 (05:04).
• Union Pressure:
  • Major federal employee unions are publicly pushing for a short-term extension (05:36).
• Hiring/Furloughs:
  • Over 70% of HUD and Department of Labor employees are furloughed; grants or approvals in process are stalled (07:10–07:36).
• Court Ruling:
  • District court has blocked administration threats to lay off (RIF) non-essential employees (06:17).

3. Legislative Maneuvers and Outlook

• "Nuclear Option" in the Senate:
  • Discussion of possibly using the “nuclear option” to bypass the 60-vote threshold for funding (06:48). Consensus: considered unlikely.
  • Notable Quote:
    • “Could a Republican majority utilize it? They could. I don’t think under this environment they’re going to.” — Mark (07:13)
• Upcoming State Elections:
  • Off-cycle elections in New Jersey and Virginia may factor into political calculations and blame assignment (06:32).

Agency-Specific Impacts

4. IRS and Treasury

• IRS Contingency Status:
  • Initial shutdown: IRS operated at 100% staff for five days, then furloughed ~46% (~39,000 employees) (09:40).
• IRS Priorities During Shutdown:
  • Developing guidance for HR1 (“top of mind”)
  • Brought back 45 chief counsel employees to work on HR1 guidance.
  • Confirmed: guidance regarding tips, overtime, and Trump accounts is promised in November (10:15).
  • Start of filing season and release of guidance is, as of last week, officially not impacted.
• Taxpayer Service Concerns:
  • Practitioner Priority Service line still operational, but strong concerns about future capacity, backlogs, and outdated online systems.
  • Notable Quote:
    • “The backlog, in the worst-case scenario, could be three times that of what it was during the COVID timeframe.” — Melanie (11:43)
• TIGTA Report (Oct 27):
  • Warns of reduced taxpayer services, cautions over potentially extreme backlogs, and highlights downed online taxpayer systems (12:01–12:30).

5. AICPA’s Recommendations to IRS

• Suspend Compliance Actions:
  • Suggest IRS should halt automated collection notices, as practitioners and clients cannot reach the IRS to resolve errors (13:21).
• Online Systems:
  • Urges the IRS to maintain all online operations, as “it is a lifeline” for both taxpayers and practitioners.
• Penalty Relief:
  • TIGTA report: IRS issued $591 million in penalties to 400,000+ taxpayers during prior shutdowns/COVID—AICPA recommends streamlined penalty waiver and late payment penalty relief (13:58).
• Notable Quote:
  • “100% of their employees should be working. Simply put, nobody wins in a shutdown.” — Melanie (13:41)
  • “Those recommendations, Melanie, the IRS can do that. It’s within their power.” — Mark (15:11)

Practitioner & Public Resources

• AICPA Resources:
  • Guidance available at the AICPA government shutdown page—covers all agencies, comment letters, advice for financial hardship, resources for job loss, and not-for-profits (15:37–16:30).
  • “Take a look at that [webpage]… we have advice to help during the financial hardship time and job loss time.” — Melanie (15:50)
• Tax FAQ & Support:
  • Dedicated tax FAQs for members, with advice for handling notices, such as CP161 (16:32).
  • Client letter template for firms to use is available for Tax Section members.

Closing & Forward Look

• Critical Upcoming Dates:
  • Nov. 1: Next major employee payday, SNAP/WIC subsidy deadline.
  • Nov. 15: Following payday and further stress on essential services, including TSA and travel-related employees.
• Political Reality:
  • “No one wins in a shutdown… we’re just trying to help our membership get through this.” — Mark (17:32)
• Next Live Town Hall:
  • November 6th, 3pm ET — “We will continue to keep you updated” (16:58).

Memorable Quotes

• “Trying to figure out what that deal is going to be is where we are right now." — Mark (02:56)
• “As long as they’re going to get back paid anyway, those furloughed employees, let’s just get them paid.” — Mark (04:54)
• “No tax on tips, no tax on overtime, and the Trump accounts—for those three areas, they would provide guidance at some point in November.” — Melanie (10:22)
• “Nobody wins in a shutdown. There’s a lot of lost efficiencies and a lot of duplication of work.” — Melanie (13:41)

Timestamps of Important Segments

| Segment | Timestamp | |------------------------------------------|------------| | State of negotiations and shutdown | 00:11–08:45| | IRS & agency-specific impacts | 09:16–15:11| | AICPA recommendations to IRS | 13:21–15:17| | Resources for practitioners & the public | 15:37–16:58| | Forward outlook & closing remarks | 17:11–18:13|

This summary gathers the episode’s essential context, decisions, and advice for navigating the government shutdown from the perspective of accounting professionals, directly reflecting the insight and tone of the hosts.