On February 20, 2025, the IRS fired approximately 6700 people during its busiest time of the year, which will likely lead to some challenges for taxpayers. So, how will this impact you and other taxpayers? We, of course, aren’t sure, but here are some things to consider.
Understanding the Current Situation
IRS staffing fluctuations and resource constraints in the past have led to:
- Longer processing times for various tax-related matters
- Increased difficulty in reaching IRS representatives
- Potential delays in resolving tax issues
How This Affects Your Business
These changes could impact your business in several ways:
- Extended Wait Times for Refunds
- Be prepared for potentially longer waits if you’re expecting a tax refund.
- Plan your cash flow accordingly, especially if you rely on timely refunds.
- Possible Delays in Loan Approvals
- If you’re seeking a business loan, be aware that lenders often require IRS transcripts.
- Factor in extra time for this process when planning major financial decisions.
- Slower Resolution of Tax Notices
- If you receive an IRS notice, resolution might take longer than in previous years.
- Stay proactive in addressing any tax matters to minimize potential complications.
- Limited Access to IRS Assistance
- Expect longer hold times when calling the IRS.
- Consider alternative methods of communication, such as online resources or written correspondence.
- Potential Increase in Professional Fees
- More complex or time-consuming interactions with the IRS may require more of our time to address them on your behalf.
- While we will do all we can to avoid increasing our fees for tax return preparation, if we are required to spend a lot more time resolving IRS issues on your behalf, we may have to pass some of that cost on to our clients.
Proactive Steps for Your Business to Take
While we can’t control IRS operations, there are steps you can take to minimize the impact on your business:
- Stay Organized
- Keep meticulous records of all tax-related documents.
- Organize your financial information throughout the year, not just at tax time.
- File Electronically When Possible
- Electronic filing typically results in faster processing times.
- Ensure all information is accurate to avoid delays due to errors.
- Plan Ahead
- Don’t wait until the last minute to address tax matters.
- Build extra time into your financial planning for tax-related processes.
- Leverage Our Assistance
- Tax professionals may have access to the IRS that most people don’t, so we may be able to help you navigate complex situations more efficiently.
- We’re can help you understand and respond to any IRS communications and hopefully streamline the time it takes to resolve them.
- Stay Informed
- Keep up to date on changes in tax laws and IRS procedures, where possible.
- We’ll continue to provide updates on significant developments that may affect your business.
Looking Ahead
Whether you need assistance with tax planning, responding to IRS notices, or strategizing for the future, we’re here to support you and your business every step of the way. Let’s work together to ensure your business remains compliant and financially strong, regardless of external challenges.